(UPDATED with WGA statement) Hours after the WGA launched its expected anti-packaging lawsuit this morning against the Big 4 agencies, representatives for UTA, WME, CAA and ICM Partners hit back in a dispute that has Hollywood on the precipice.
“This development is ironic given that the Guild itself has agreed to the legitimacy of packaging for more than 43 years,” Association of Talent Agents executive director Karen Stuart said this evening. “Even more ironic is the fact that the statute the WGA is suing under prevents abuses of power and authority by labor union leaders, even as the Guild has intimidated its own members and repeatedly misled them about their lack of good faith in the negotiating room.
“Today’s move confirms that the WGA’s leadership is on a predetermined path to chaos that never included any intention to negotiate,” Stuart added. “Knowing that it could take months or even years for this litigation to be resolved, WGA leaders are unnecessarily forcing their members and our industry into long-term uncertainty. While the legal process runs its course, we strongly believe that in the interim it remains in the best interests of writers to be represented by licensed talent agencies.
“We empathize with our writer clients and the untenable position they have been put in by WGA leadership,” she said. “We stand ready and willing to represent writers with the added protections outlined in the Agency Standards for Client Representation (read it here) that further ensures choice and greater transparency for writers.”
Or, as an insider said to Deadline today: “This is war!”
It’s also a matter of law, says the WGA in response to the ATA’s response to their lawsuit.
“This matter is very simple,” the Guild insisted late Wednesday. “If the major agencies would abide by existing law – antitrust and racketeering law – this deal would have been done 11 months ago. The ATA’s repeated use of anti-union rhetoric illustrates how much in denial the big agencies are.”
And that’s where we are tonight, rhetoric and all.
After several tense days, the first legal move by the Guild early Wednesday came after the breakdown of last minute talks with the Association of Talent Agents over the WGA’s strongly approved new Agency Code of Conduct collapsed on April 12.
Winning a massive thumbs up from the WGA’s members late last month, the new Code overturns the more than 40-year status quo. It bans packaging fees and prohibits agencies from being affiliated to production entities through corporate parents.
Even with the likes of CAA’s Bryan Lourd and UTA’s Jay Sures in the room last Friday across the table from the WGA’s David Goodman and David Young, a reasonable resolution was clearly not in the cards.
First a first blush offer by the ATA crew to provide around 1% of the packaging revenues to writers was curtly disregarded. Very quickly, the conversation and the meeting was over.
Next, as promised, the WGA told members to begin firing their agents en masse. As confusion spread about what that actually meant and the role managers and lawyers could play as they were “deputized” to fill the breach, the Guild today announced it would seek redress in the courtroom.
Citing the anti-kickback provisions of the Taft-Hartley Act, the Guild’s lawsuit in LA Superior Court asserts at its essence that packaging fees collected by the uberagencies violate state fiduciary duty laws, and federal unfair competition laws.
The civil suit seeks an injunction to halt the defendant agencies from collecting packaging fees. With potential to go into the hundreds of millions of dollars, the action also wants repayment of funds the guild claims were illegally garnered over the decades since the now shattered pro-packaging agreement was inked in 1976.
Over 40 years later, the Guild says its members are being ripped off; the ATA claims WGA leadership is only interested in a scorched Earth approach.
At the same time, even though the Guild lacks the financial deep pockets of the Big 4 agencies to fight a protracted legal battle, there is no doubt the vast majority of the WGA’s membership believe in the strategy implemented by leadership.
“To date, thousands of writers have signed letters” terminating their agents who refused to sign the new code, declared Tony Segall, the general counsel for the Writers Guild of America, West, at today’s press conference at the WGA HQ on Fairfax and Third Avenue.
Going into today, the WGA and the ATA didn’t have any new sit-downs scheduled. Now, the only meetings might be in front of a judge.