WME president Ari Greenburg told a federal judge today that many of the WGA’s members are afraid of their own guild. Greenburg said so in a supplemental declaration in support of the agency’s request for a preliminary injunction to stop the guild’s ongoing boycott of WME and CAA until the case goes to trial.
“Many Guild members communicated to me and/or to other WME agents their belief that the WGA’s rules are purposefully vague, have changed over time, and could be used against them by the Guilds if they worked with WME in any capacity,” he told U.S. District Court Judge André Birotte Jr. under penalty of perjury. “In addition, WGA has been telling different things to different WGA members – differences that the Guilds are using to their own advantage – regarding the application of their own rules. Members were also worried about Guild tribunals, losing their health insurance, and being blackballed – grave penalties for (ostensibly) violating Guild rules that were vague and constantly changing.
“Unsurprisingly, because of this fear of discipline and retaliation from their Guilds, numerous Guild members terminated WME even for non-writing services that are not covered by the Minimum Basic Agreement. Attached hereto as Exhibit 2 is a non-exhaustive list of Guild members, including many showrunners, whom I represented and who terminated WME for all services. Some have signed with managers and some have signed at rival agencies.”
The names of the writers and showrunners listed in the exhibit are blacked out and under seal, labeled “Highly Confidential – Outside Counsel’s Eyes Only.”
The legal battle and boycott began in April 2019 when the WGA ordered its members to fire their agents who refused to sign the guild’s Code of Conduct, which banned packaging fees and agency affiliations with related production companies. Since then, every major agency except CAA and WME have signed a modified code that phases out packaging fees and reduces ownership interests of production companies to just 20%.
“I understand that the Guilds have argued that their members are required to terminate WME only in connection with writing work covered by the Minimum Basic Agreement,” Greenburg continued. “This ignores that the Guilds expressly ‘encouraged’ their members ‘to be represented for all your work by a franchised agency’ and commended those members who had gone ‘above and beyond’ by firing a non-Guild franchised agent for producing services.”
His declaration accompanies the agencies’ reply in support of its motion for a preliminary injunction to end the boycott.
According to WME:
• On the facts, the Guilds do not dispute that (i) more than a thousand showrunners and writers with non-fungible relationships have fired WME, (ii) the boycott is preventing WME from attracting new clients, and (iii) the boycott is causing WME to lose agents.
• The Guilds claim that WME has been “free” to sign the ICM/UTA franchise agreement, but at the same time, they do not deny that on October 16, 2020 David Young told WME it would have to sign an additional “side letter” subjecting it to unprecedented monitoring, sanctions, and a de facto audit of its investors.
o Importantly, the punitive “monitoring” and “sanctions” terms were not included in UTA’s, ICM’s, or any other agency’s franchise agreement.
• The Guild’s Lead Negotiator David Young attests “that it was important to understand the complex corporate structure” of WME—citing Endeavor’s “private equity shareholders” in particular—and that “these were new issues for the Guilds,” requiring retaining outside corporate counsel in “late September.” But if understanding such investors was a “new issue” for the Guilds in “late September,” then they must not have investigated UTA’s, ICM’s, or any other agency’s outside investors before awarding them a franchise therefore, clearly demonstrating that the Guilds’ inquisition into WME’s (and CAA’s) investors was “special treatment” intended to make it impossible for the two largest Agencies to be franchised.
• The Guilds falsely claim—four times—that WME sought an unreasonable, “undefined time period” to comply with the Guilds’ content affiliate rules. But the truth is, as WME and Lead Negotiator David Young both attested, WME sought a specific deadline to transition into compliance with these rules: June 30, 2022, the same date that the Guilds gave franchised agencies to transition out of packaging.
o Critically, the Guilds claim that a “blatant conflict of interest exists in every packaging fee arrangement” and that packaging is systemically illegal. By contrast, the Guilds have never claimed that an agency’s affiliation with a content company is illegal. Yet, the Guild’s Negotiating Committee will not agree to the exact same timeline given to agencies to sunset packaging for WME to come into compliance with the 20% ownership cap.
* Therefore, the only plausible explanation for the Guilds’ flexibility towards a packaging transition and inflexibility towards a content company transition is that the only two agencies impacted by the latter restriction are WME and CAA.
• WGA does not dispute that more than a thousand showrunners and writers with non-fungible relationships have fired WME, the boycott is preventing WME from attracting new clients, and the boycott is causing WME to lose agents. Yet WGA argues that “lost contracts, customers, or business are insufficient to support injunctive relief without a showing that the plaintiff ‘is threatened with extinction.”
At the same time WGA now seeks its own injunctive relief, all while claiming the Court lacks jurisdiction to issue the injunctive relief that WME is seeking.
• A franchised talent agent attests that the Guild’s Lead Negotiator David Young admitted that the Guilds are turning a blind eye to managers’ conflicts “because the Guilds need to use the managers as leverage against WME and CAA”—an admission that further punctuates that the boycott is not about conflicts of interest but the unions’ self-proclaimed “power grab.”
• The Guilds are boycotting WME to the advantage of its rivals by entering into franchise agreements with other agencies that are not available to WME and agreeing to indemnify managers who take clients from WME. Young has admitted WGA is turning a blind eye to conflicts of managers’ conflicts of interest “because the Guilds need to use the managers as leverage against WME and CAA” in WGA’s self-proclaimed “power grab.”
• The Guilds previously admitted that this “is not a ‘labor dispute,’” never raised (and thus waived) their newfound NLGA defense, and exclusively seek injunctive relief in this dispute. They can’t have it both ways.
o In threatening a group boycott claim of their own, the Guilds wrote in a letter to its members: “The ATA is not a union and, indeed, concedes that it is involved in “a contract negotiation, [and] not a ‘labor dispute’ and therefore not subject to a collective bargaining process.”
• The Guilds had it right when they said this case concerns a “contract negotiation” between the Guilds and the talent agencies and is “not a labor dispute.” WME doesn’t employ writers. And the Guilds have identified the conditions under which agency content affiliates and packaging will be permitted as the core dispute—not any dispute with studios over terms and conditions of writer employment.”
CAA filed a similar reply in support of its motion for a preliminary injunction earlier today.
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