CAA Joins WME and UTA in Filing Federal Anti-Trust Lawsuit Against Writers Guild

CAA has become the latest top talent agency to file a federal lawsuit against the Writers Guild of America, accusing the union of “stunning overreach” in its quest to ban packaging fees and agency-affiliated production operations.

CAA’s suit comes a week after WME filed a similar complaint, followed on June 27 by UTA. The three cases are expected to be consolidated as they proceed in federal court in Los Angeles. The WGA did not immediately respond to a request for comment on CAA’s lawsuit.

The WGA filed suit in state court against WME, CAA, UTA and ICM Partners, accusing the agencies of violating their fiduciary duties to writer clients through packaging, which the guild asserts is a fundamental conflict of interest with agencies earning fees from production entities for helping to assemble TV series and independent films. CAA maintains that the WGA’s actions have been in violation of exemptions granted to unions for collective bargaining purposes under anti-trust laws.

“In effect, the WGA is seeking to restrain competition in a significant portion of the entertainment industry, far beyond lawful union interests,” CAA’s complaint states. “The WGA’s unlawful group boycott ultimately will cause substantial harm not only to talent agents but also to actors, directors, production staff, below-the-line employees, and many other industry workers—as well as the vast majority of the union’s own writer membership — all of whom depend on the agencies’ pro-competitive activities to ensure that television shows actually get made and that individual artists are equipped to maximize their value.”

CAA’s complaint offers a more vigorous defense than the WME and UTA filings of TV series packaging having endured as a standard industry practice since the 1950s. CAA argues that packaging has been much more of a benefit than detriment to writers over the years because the standard 10% commission fee is waived for all clients of the agency who work on a show in which the agency is receiving a packaging fee. CAA asserts that packaging has become so commonplace that the volume of new TV series development would slow down if the practice were eliminated. Moreover, the end of packaging fee deals would mean that all writers would pay 10% of their income from writing to agents, hitting the pocketbooks of those writers that the WGA argues have been hurt by the lack of incentive at the major agencies to fight for salary increases for individual writers.

“Packaging is particularly important for artists (including writers) in the current media economy, because it helps agencies and their artists secure better deals in an environment in which studios seek relentlessly to reduce the costs of producing television programming, including the amounts paid to talent,” the complaint states. “Meanwhile, the overwhelming number of writers (who are employees, not producers, and who are not generally entitled to receive back-end compensation at all, even from profitable programs) almost always do better under a packaging deal than they would have under a commissioning system. That is because the back-end compensation paid to CAA in packaging deals comes at the expense of the studios, not writers or other talent.”

The WGA maintains that packaging fees are an inherent conflict of interest because the agencies receive backend points that make them a part owner of property. In that capacity, the agencies have every interest in keeping writer salaries low in order to maximize the agency’s share of potential profits down the road. CAA, like WME, asserts that the WGA’s theory is flawed because so few shows actually generate backend profits.

“The WGA’s positions ignore the overall economics of packaging fees,” CAA’s complaint states. “In the overwhelming majority of cases, scripted television programs do not generate back-end profits at all. In these cases, writers are clearly better off under a packaging fee model, in which the writers do not pay a 10% commission on their employment income, than they would be under a commission model, in which they pay 10% commission on all compensation earned.”

All told, CAA echoes the allegations made by WME and UTA that the guild has dramatically overstepped its bounds and is violating its anti-trust exemptions as a union by organization what the agencies call an illegal “group boycott.” After fitful negotiations with the Association of Talent Agents earlier this year, the WGA on April 13 implemented a new Agency Code of Conduct and instructed its 15,000 members (across the WGA West and WGA East) to fire agents who will not agree to abide by the terms of the new code.

“That is stunning overreach. The WGA is attempting to limit competition in a broad swath of commercial markets, such as television packaging and content production, that the WGA has no authority to regulate,” CAA’s complaint asserts. “The WGA’s efforts to remake the entire entertainment industry extend far beyond any legitimate union or collective-bargaining interest it may hold.”

More Biz

  • The Lion King

    'Lion King' VFX Supervisor Rob Legato to Keynote at the 2019 View Conference

    Rob Legato, visual effects supervisor of “The Lion King,” “The Addams Family” co-director Conrad Vernon and Baobab Studios’ co-founder and chief creative officer Eric Darnell, director of the VR studio’s Emmy- and Annie-winning VR short “Crow: The Legend,” are rounding out the keynote speakers at this fall’s 20th edition of the View Conference in Turin, [...]

  • Pinewood Studios James Bond

    Netflix's Shepperton Studios Deal Is Stretching the U.K.'s Production Limits

    Netflix’s huge new hub at Shepperton Studios outside London is a further fillip for Britain’s booming production sector. Amid jitters over Brexit and its effects on the economy, the streaming giant’s commitment is a vote of confidence in the U.K. entertainment industry and a continuing source of local jobs. But the decision by Netflix to [...]

  • It

    Producer Sues Warner Bros. Over 'It' Film Adaptations

    A producer who developed the original “It” TV miniseries sued Warner Bros. on Thursday, alleging the studio breached his contract by making the films “It” and “It Chapter Two” without him. Frank Konigsberg and Larry Sanitsky were running Telepictures in the early 1980s when they acquired the rights to the Stephen King novel. They developed [...]

  • Lionsgate CEO Jon Feltheimer

    Starz Nears Realignment: Why Lionsgate Won't Hire a CEO to Replace Chris Albrecht

    Nearly six months after Starz CEO Chris Albrecht exited in February, Lionsgate brass is moving closer to a revamp of the premium TV network’s executive structure. According to insiders, at least one thing is clear: Albrecht is not expected to be replaced as CEO. Instead, Lionsgate chief executive Jon Feltheimer is taking a more active [...]

  • Movie Ticket Subscriptions

    As MoviePass Fades, Theaters Fall In Love With Subscription Services

    MoviePass may be cratering, but movie theater subscriptions are here to stay. AMC and Cinemark already operate their own online ticketing services. And by the end of July, Regal Entertainment is expected to unveil a subscription plan for customers accustomed to getting all manner of entertainment for a monthly fee. With ticket sales down more [...]

  • John FordNPact Awards, Show, Los Angeles,

    John Ford to Exit as Head of Unscripted Producers Trade Association NPact

    John Ford has stepped down as general manager of NPact, the trade association that represents unscripted TV producers. Ford is exiting the post he’s held since 2015 because of the potential for conflicts of interest arising from his role as head of programming for digital multicast outlets Justice Network and Quest Network. The channels were [...]

  • Woodstock 50 Applies for Vernon Downs

    Woodstock 50 Applies for Vernon Downs Permit Yet Again

    For better or worse, Woodstock 50 isn’t giving up on Vernon Downs, despite being rejected twice already: The producers have applied for another permit to hold the festival at Vernon Downs, according to the Utica Observer Dispatch. Town Attorney Vincent Rossi confirmed the application was submitted Wednesday. This is the festival’s third application; previous applications [...]

More From Our Brands

Access exclusive content