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Writers Guild Seeks to Reshape Talent Agency Business in Proposed Deal

Amping up its battle with talent agents, the Writers Guild of America has issued proposals to Hollywood agents aimed at stopping potential conflicts of interest.

“The Guilds’ proposals are entirely reasonable,” said WGA West president David A. Goodman. “If you review them closely, they read like a voluntary code of conduct that an agency would put up on their own website to attract writers and other talent. The proposals demonstrate a commitment to the fiduciary principles of law, always putting the client first and being an honorable representative.”

The WGA’s actions have raised alarms at major agencies, which are unlikely to agree to the proposals. Should the agreement expire next year, it’s uncertain what kind of oversight the WGA would be able to exercise over agents.

The specific proposals were sent to ATA members and first unveiled Friday by Deadline Hollywood. The key proposal says, “No agency shall accept any money or thing of value from the employer of a client” — which would effectively end all packaging deals, in which agencies receive both upfront and back-end fees.

The WGA is also proposing that “no agency shall derive any revenue or other benefit from a client’s involvement in or employment on a motion picture project, other than a percentage commission based on the client’s compensation.”

The WGA has also proposed that “no agency shall have an ownership or other financial interest in, or shall be owned by or affiliated with, any entity or individual engaged in the production or distribution of motion pictures.”

“The agency’s commission shall be limited to 10% of client’s gross compensation, including client’s profit participation,” the proposal said. “Agency’s commission shall not reduce client’s compensation below MBA scale compensation. Agency shall not circumvent limits on commissions by charging fees for other services.”

The WGA notified Hollywood agents on April 6 that it wants to renegotiate its 42-year-old franchise agreement after the WGA West board and WGA East council voted unanimously to reopen the guilds’ agency agreement. The WGA West held three meetings in March, during which their leaders accused Hollywood’s top talent agencies of being engaged in conflicts of interest in how they represent writers.

The WGA material distributed to attendees at the meetings asserted that agencies with a financial interest in shows may have less incentive to get the best deals for writers.

The issue has gained prominence in recent months due to Hollywood’s two largest agencies — WME and CAA — aggressively moving into production. As Variety noted in a Feb. 13 cover story, the issue has the potential for conflicts of interest that arise when the same company represents the creative talent on one side of the table and is the employer on the other.

The WGA told members on April 6 that it has sent the Association of Talent Agents a 12-month notice to terminate the existing deal, known as the Artists’ Manager Basic Agreement. The terms and conditions of the current agreement will remain in effect through April 6, 2019, but will expire if a new agreement is not reached.

ATA executive director Karen Stuart told Variety at that point that she has received the guilds’ “Notice of Election to Terminate” and said in response, “It’s unfortunate that the WGA has taken this step without ever having reached out to ATA to discuss any of the issues it raises in its proposals. That said, the ATA will do what it’s always done: constructively engage in a dialogue with the Guild to address any legitimate concerns.”

 

The specific proposal also includes this language covering the agency-client relationship:

a. Agency shall at all times act as a fiduciary of client, and shall comply with all fiduciary duties imposed by statute or common law.

b. Agency’s representation of a client shall not be influenced by its representation of any other client.

c. Agency shall promptly disclose to client all inquiries, offers and expressions of interest regarding employment or sale or option of literary material, and shall keep client apprised of the status of all negotiations.

d. Agency shall maintain confidentiality with respect to client’s employment and financial affairs.

e. Agency shall not submit client for employment where the employer or producer has not yet secured underlying rights necessary for the assignment.

f. Agency shall be responsive and professional in communicating with client.

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