WGA-Talent Agency Fight Drags On At One-Year Mark

Deadline

One year after the WGA ordered thousands of its members to fire their agents in a dispute over packaging fees and agency-related production entities, neither side shows any signs they are willing to give in.

At least where it comes to the four biggest packaging agencies – WME, CAA, UTA and ICM Partners – writers have learned to do without the agents they’ve always relied on, and the agencies have found other ways to put together their packages.

The WGA and three of the agencies – WME, CAA and UTA – have also been locked in a protracted court battle, which the guild launched last April and which could go on for another year, with a proposed trial date set for March 2021. Both sides are accusing each other of antitrust violations, which each denies.

The stalemate between the WGA and ATA seems to have taken a backseat, considering all else that is going on. Writers say they have learned to rely on lawyers and managers, and while none said life was better, it wasn’t substantially worse. And now, with the industry shut down amid the COVID-19 pandemic, the WGA is locked in a battle on a second front in a showdown with management’s AMPTP over terms for a new film and TV contract to succeed the one that’s set to expire May 1.

“The WGA is in the process of setting negotiation dates with the AMPTP. We’re not ‘locked in a battle’ because we haven’t even started negotiations yet. And we aren’t trying to drag the AMPTP into our dispute with the agencies, because the companies are already involved; they’re the ones paying these illegal fees,” WGA West president David A Goodman told Deadline, referring to packaging fees, which the guild claims are illegal “kickbacks” from the studios to the agencies. “But all of this will be resolved in due course while the WGA continues to support its members as they face the challenges of this global crisis.”

The only recent mention of the year-long stalemate was an unsuccessful attempt by the WGA to coax AMPTP to be an ally in its fight against agents, by requiring signatory production companies “to negotiate only with agents franchised by the WGA.”

AMPTP president Carol Lombardini flatly rejected that proposal more than a year ago when the guild sought to re-open negotiations with the AMPTP in order to add that clause to the guild’s existing contract. In March 2019, Lombardini told WGA West executive director David Young that “the companies have concluded that agreeing to your proposal would require them to participate in a group boycott of talent agencies that do not meet with guild approval. We believe that doing so would subject them, the WGA and individual writers to a substantial risk of liability for antitrust violations, including claims for treble damages. The Companies would also be at risk for violation of federal labor laws as well as state laws.”

It seemed a long shot that the WGA should consider AMPTP anything but an adversary. Right now, tensions are ratcheting up between the WGA and AMPTP. Given the difficulty of negotiating a collective bargaining agreement as a deadly pandemic rages, the WGA tried to kick the can down the road for a year or so, hoping to revisit when the world comes back to normal. Perhaps sensing a benefit in leverage, the AMPTP’s Lombardini told WGA West exec director David Young she wants to start negotiations next week, after exchanging proposals April 15. The current deal expires May 1.

The WGA’s long-simmering dispute with Hollywood’s talent agencies came to a head exactly one year ago when it ordered members to fire agents at agencies who refused to sign its new agency code of conduct, which banned packaging fees and agency affiliations with related production and distribution companies, which the guild claims are a “blatant conflict of interest.”

The major agencies argued that packaging has long been part of Hollywood, but some writers believe that those agents have gone far past their role as servicers who get 10% for soliciting work for clients and helping make their deals. The major agencies have diversified into a world of hedge fund-ed conglomerates that have grown to where revenues from show business interests are a minority of their revenue streams.

Verve, Gersh, APA, Rothman Brecher Ehrich Livingston, the Kaplan Stahler Agency, Innovative Artists, Pantheon, A3 Artists Agency and most recently Paradigm have signed on to the WGA’s terms, but the Big Four won’t budge. Some believe that the majors are learning to survive without writer clients, and that the writers are surviving without their agents.

While the rise of streaming is increasingly blunting the practice of packaging, a 2018 report by the guild found that 87% of the more than 300 scripted TV series produced during the 2016-17 television series were packaged by talent agencies, and that 79% of those shows were packaged by WME and CAA.

On the legal front, a federal judge in January denied the WGA’s motion to dismiss the antitrust lawsuits brought against it by WME, CAA and UTA, but has yet to rule on their motion to dismiss the WGA’s antitrust suit against them.

Ask agents at the Big Four and the agents will say they miss their clients, but that if and when this all ends, a great many writers will find themselves not invited back. After all, 20% of the writers make 80% of a lit agent’s commissions.

The writers say that while they miss their agents, they have found support systems to find jobs and have made do with lawyers and managers. All of this has been helped by a streaming boom in January that left more jobs than good writers.

All that said, it is interesting to note that not many top-tier writers have signed with those smaller agencies that agreed to the WGA’s new franchise agreement, and many of the writers who are also directors and producers still maintain ties with the agents who helped build their careers.

There is nothing to indicate that we won’t be writing about the second anniversary of this standoff in a year. But you never know. Hollywood labor relations are always a tug of war, but in these historic times, pressure may build for everyone to put their differences on hold and start pulling on the rope in the same direction.