WME and CAA have filed objections to the WGA’s request to cross-examine several of their top officials at a December 18 court hearing on the agencies’ motions for a preliminary injunction that would force the guild to drop its group boycott against them.
The ongoing legal dispute arose in April 2019 when the WGA East and West ordered their members to fire their agents who refused to sign the guilds’ Code of Conduct, which banned packaging fees and agency affiliations with related production companies. Since then, every major agency except CAA and WME has signed a modified code that phases out packaging fees and reduces ownership interests of production companies to just 20%.
According to WME’s objection, the WGA wants to cross-examine WME president Ari Greenburg, partner Rick Rosen and Endeavor chief counsel Courtney Braun, all of whom filed declarations in the case. In his declaration, Greenburg railed against the WGA for holding talent agents to a different standard than talent managers, who are not licensed by the state or regulated by the guilds. “The Guilds claim their boycott against WME is intended to address conflicts of interests relating to packaging fees and content affiliates. Since the boycott started, hundreds of former WME writer-clients have signed with talent managers instead of signing with a franchised talent agency — or waiting for WME to regain its franchise.”
The WGA East and West, he said, “do not regulate talent managers and do not prohibit their members from using talent managers to procure employment — in fact, the Guilds publicly agreed to indemnify managers who procure employment for Guild members. Many talent managers take producing fees, many talent managers act as packaging agents, and many talent managers charge higher commissions than WME agents. Yet the Guilds do not stop their members from working with managers — quite the opposite.”
In his declaration, Rosen noted that “Over the past year, I met with Guild leadership several times, both formally and informally, on behalf of WME to try to reach an agreement on a new franchise agreement. Those discussions, however, have proven futile. The Guilds have never expressed a willingness to negotiate — even after WME agreed to substantively the same franchise terms as ICM — rarely even speaking at any of our meetings. To the extent the Guilds responded to any of our proposals, it has only been to reject them and ask for more.”
Rosen also declared, under penalty of perjury, that WGA West executive director David Young “repeatedly threatened to ‘kill’ me” during a heated phone conversation in August, as the guild and the agency were trying to work out a deal to end their ongoing legal standoff. Rosen said he was so alarmed by the alleged threat that he called WGA West president David A. Goodman to complain about it, but didn’t get a satisfactory response. A spokesman for the WGA said that “both David Young and David A. Goodman deny Mr. Rosen’s claims.”
In its latest court filing, WME said that “As an initial matter, while the Court has discretion to receive oral testimony, courts rarely allow oral testimony on motions. In any event, when a party seeks to cross-examine a declarant” under the court’s rules, “that party must provide a basis in its request that warrants cross-examination. When the party has not provided any grounds in support of its request, the request for cross-examination should be denied. Further, those grounds must be sufficiently specific to justify cross-examination.
“The Guilds offer no justification whatsoever to subject WME’s declarants to cross-examination – let alone a specific one. Rather, they simply list the declarants with a corresponding description of the subjects on which they seek testimony. This is hardly sufficient under the Local Rules and governing case law. In addition, in their opposition to WME’s motion for preliminary injunction, the Guilds do not in fact dispute the facts presented in the Braun, Rosen, and Greenburg declarations. Their request must be denied on these grounds.”
And in a tit-for-tat, WME told U.S. District Court Judge Andre Birotte Jr. that if he allows Greenburg, Rosen and Braun to be cross-examined, then WME should be allowed to cross-examine Young and WGA West assistant executive director Ellen Stutzman, who filed their own declarations.
In his declaration, Young said that the signing of ICM Partners and UTA to the guilds’ franchise agreement earlier this summer “left the two biggest agencies, WME and CAA, as the only remaining agencies not signed to a WGA franchise agreement. WME and CAA are not only the two biggest, they are different from all of the other agencies in two important respects. First, both agencies own, or are commonly owned with, an affiliated production company. WME is wholly owned by a holding company that also wholly owns a production company, Endeavor Content. CAA owns a majority interest in a production company called wiip. Second, the biggest shareholders in both WME and CAA were private equity investors, Silver Lake Partners in the case of WME, and TPG Partners in the case of CAA.”
WME, he said, “Demanded that the UTA/ICM franchise agreement be modified to exempt all of its investors from regulation under the Franchise Agreement, a radical departure from the UTA/ICM franchise agreement—and every other franchise agreement the WGA negotiated to date — which explicitly binds the franchised agencies’ shareholders to the regulations set forth in the franchise agreement. WME, he said, also proposed “significant changes to various provisions of the franchise agreement requiring franchised agencies to share certain information or documents with the WGA concerning writers. For example, WME proposed providing itemized statements of writer compensation and agency commission to the Guild on an annual instead of quarterly basis, and writer deal memos and contracts on an annual basis instead of within 15 business days.” These proposals, he said, were not acceptable to the guilds.
CAA filed a similar objection, saying that the WGA’s request to cross-examine CAA officials who filed declarations should be denied because it “failed to provide any grounds in support of its request. Although the WGA has identified topics about which it would like to question the declarants, the WGA fails to provide any justification as to why cross-examination on a topic is needed to advance the opposition to CAA’s motion for a preliminary injunction. Rather, the WGA’s request is nothing more than a general desire for further questions on topics identified, which is plainly improper and a waste of judicial resources.”
CAA said that if the judge allows cross-examinations at the upcoming hearing, it will want to cross-examine Young, Stutzman, and showrunner Michael Schur — all of whom filed declarations in support of the guilds’ legal position — and to hear live testimony from CAA negotiator Ronald Olson.
In his declaration, Young also gave a blow-by-blow description of how talks with WME and CAA failed so far to produce an agreement to end the bitter standoff. He also noted, however, that the WGA’s agency negotiating committee met recently to consider CAA’s latest proposal, and “is preparing its response.”
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