The WGA’s ongoing battle with Hollywood’s talent agencies isn’t technically a strike – guild officials call it a “concerted action” – but it has similarities to past WGA strikes, all of which had to do with new revenue streams that the guild wanted a share of for its members.
That was the case in 1960, when writers went on strike for six months over residuals from theatrical films shown on the relatively new medium of television. It was the case again in 1988 when writers went on strike for six months over residuals from films and TV shows distributed on home video and cable TV.
It also was the case in 2007, when writers took to the picket lines for 100 days in a fight over money from content made directly for the rapidly evolving field of new media.
The WGA has said that its current fight with talent agencies is intended to address its “fundamental demand that they realign their financial interests with ours” – that agencies stop taking fees for shows they package and sever their ties with vertically integrated corporations that control affiliated production companies.
But after talks with the Association of Talent Agents broke off last month and the guild ordered all of its members to fire their agents who refuse to sign the guild’s new Agency Code of Conduct, Chris Keyser, co-chair of the WGA’s negotiating committee, let it be known that the guild was open to a deal that included revenue sharing from packaging fees collected by the agencies.
The ATA’s last offer was to give writers 0.8% of the packaging fees, but Keyser called the offer a “snub.” In collective bargaining-speak, that suggests the guild might be open to accepting a bigger share of the packaging pie.
Unlike the revenue streams from new technologies that were at the heart of the guild’s previous three strikes – residuals from films shown on TV, residuals from films shown on home video and cable TV, and a share of the revenue from new media – packing fees are not a new revenue stream. The agencies have been collecting them for decades, and up until now they’ve been untapped by any of Hollywood’s guilds.
Keyser told the guild’s members that the WGA never responded with a counter-offer to the ATA’s offer because offering “less than a penny on the dollar on packaging is not an offer.” He added: “If you put your house on the market for a million dollars and a buyer offered you $8,000 for it, you would not counter.”
That clearly suggests the WGA may have come back with a counter-proposal if the ATA had made a more serious offer. And since the ATA made an offer to share 0.8% of the agencies’ packaging fees with writers, the only question may be: How much more are they willing to share?
If and when the WGA and the ATA return to the bargaining table, finding that fair share may be the key to working out a deal. And even though a lawsuit filed by the guild against the Big 4 agencies has called packaging fees “illegal kickbacks” from the studios, the guild would probably have to drop its suit if its members got a fair share of those “kickbacks.”
Sharing with writers, however, would open the door for the DGA and SAG-AFTRA to ask for similar deals — even though in TV series, non-writing directors are not usually key elements of a package, and even though SAG, which merged with AFTRA in 2012, hasn’t had a franchise agreement with the ATA since 2002.
SAG’s dispute with the ATA didn’t involve packaging fees but rather agencies that were affiliated with related production companies – the other main issue in the WGA’s dispute with the ATA.
Like SAG, the WGA maintains that’s a conflict of interest: that it puts agents in the position of being the “employer” of their members – a claim the ATA vehemently denies.
This could be resolved easily enough if the corporations that own agencies and affiliated production entities would spin off the agencies to become free-standing entities. But that might not sit well with institutional investors who have poured hundreds of millions of dollars into the agencies’ corporate parents.
Whether untangling agencies from vertically integrated corporations is even doable – even if the agencies are willing to give a fair share of packaging fees to writers – may determine how long the current “collective action” lasts.