The sides are trying to hammer out a deal to avert the prospect of thousands of WGA members severing ties with their talent agents after the current agreement expires on April 6. The WGA is pushing for reforms in the franchise agreement that governs business dealings between talent agents and WGA members. Industryites are increasingly nervous about the ripple effect across the business if the town’s working writers suddenly part ways with their agents.
The WGA wants to ban the decades-old practice of agencies taking packaging fees for helping to assemble TV series and film projects. The guild also aims to bar agencies from being affiliated with companies that also own production assets. The two largest agencies — WME and CAA — are now part of diversified companies that have production operations, a trend that has raised conflict of interest concerns in the industry.
Sources said the sides made little progress Thursday in the roughly three-hour session held at the Beverly Hilton. WGA West president David Goodman read a lengthy statement at the meeting that reinforced the guild’s position on the two most contentious issues.
“The Guild is pushing a unilateral mandate that questions writers’ own decision-making ability and will destabilize the entire industry, affecting writers, directors and actors alike,” said Karen Stuart, exec director of the ATA, in a statement. “The Guild’s proposals will only weaken our collective ability to continue advancing artists careers and confront the power imbalance created by the dramatic changes in the media landscape.”
The ATA earlier this week unveiled a proposal designed to bring greater transparency to the packaging process including the option for clients to opt out of having a TV series packaged. The guild maintains that the packaging process amounts to a conflict of interest because production entities pay the fees based on a percentage of a show’s license fee, typically 3% upfront and 10% of any backend profits. Agencies waive the standard 10% client commission fee when they receive a package on a series.
Agents counter that clients have long benefited from packaging because of the 10% commission fee waiver. Top agencies have crunched the numbers and determined that in most cases, the revenue they would receive by commissioning all clients on packaged projects would be equal to if not higher than the upfront packaging fee.
Agency sources said there is willingness to find compromises to guard against some of the abuses cited by the WGA, which include agencies sometimes receiving a richer profit definition than clients and agents holding up deals because of package fee concerns. But agents say the guild’s line-in-the-sand to ban the practice outright has left them no wiggle-room in the talks.
“We won’t make an agreement that turns packaging into a false individual choice that each writer is supposed to make,” Goodman told the room on Thursday, according to a transcript provided by the WGA. “There will have to be a resolution, if one is to be had, that empowers the Guild to defend all writers’ interests. The same goes for producing.”
The WGA confirmed that it asked the ATA to respond to numerous questions about the state of the independent film business. The ATA maintains that the indie film sector would be severely hampered by an outright ban on packaging involving WGA clients given the role that agencies play in arranging financing for projects.
A source with knowledge of the situation said the WGA left no room for negotiation on the issues of packaging or production. “They said ‘It’s a 10% business — that’s it,” said the source. The largest talent agencies remain resolute in their opposition to the WGA’s proposal. If a deal isn’t reached by April 6, the WGA intends to impose a Code of Conduct on agencies as a condition of representing WGA members. Given the hard stances on both sides, the threat of litigation ensuing remains strong.
The guild has asserted that agents are more focused on protecting fees rather than pushing for higher salaries for writers, particularly mid-level writers. The WGA has made an aggressive push with members to make their case for the agency battle. Agents, particularly those with long relationships with writer clients, are alarmed at the WGA’s strong rhetoric of calling packaging a “crime” and a “scam.”
The battle between agents and the guild — two entities that would seem to have common goals of representing the interests of writers — is indicative of the turmoil that has spread across the TV and film industries in the past few years. The rapid shift away from traditional 22-episode series to shows with shorter orders has meant that TV writers paid by the episode are often found themselves worker harder and longer for lower pay overall because of the lower episode counts. Moreover, the studios have kept a tight leash on writing budgets for more than a decade. Showrunners say that a typical cable or streaming series are staffed by a showrunner, two or three exec producer-level writers and two or three junior writers. That has left a big hole in the demand for mid-level writers who once made a comfortable living working on network primetime series.
The industry is also adjusting to the new-model syndication market where Netflix and others buy out long-term syndication rights, and not for the same enormous profits that studios once reaped for megahits such as “Seinfeld” and “The Big Bang Theory.” The slowdown in syndication profits has helped make the agencies more reliant on the upfront aspect of packaging fees. Writers are also feeling the pinch from the near disappearance of residual fees from primetime reruns, which were once a big source of a successful TV writer’s income.
Goodman countered in his statement that industry shifts are no excuse for what he described as stagnant writer income — a claim that agencies strongly refute by pointing to billions of dollars in overall deals and high fees commanded by top showrunners and screenwriters.
“The fact is episodic quotes have been stagnant for twenty years, a factor that has nothing to do with short orders,” Goodman said. “And in an industry awash with money, writers’ declining episodic quotes and the requirement to work many weeks per episode were completely yours to address. It is not misleading to say that as these problems developed, you did nothing, never said a word to us about the problems or how to fix them.”
The WGA has hammered home its point with members that the largest agencies have all received hundreds of millions in private equity investment and are now part of entities that need to deliver regular returns to those investors.
The WGA has set a membership vote for March 25 to gauge the sentiment among its 9,000-plus members for the implementation of the Code of Conduct. The guild is also circulating a letter among top showrunners for a public demonstration of support from the guild members with the greatest industry clout. A great many showrunners have been vocal on social media for their support for the guild’s campaign — even if it means walking away from agents that won’t agree to the WGA’s terms — while others are privately expressing doubts about the campaign.
One seasoned showrunner who is in the midst of juggling multiple projects through the linear and digital eco-system said he was wary of disrupting all of that business but was equally worried about being ostracized in the industry if he refused to sign the WGA pledge.
“I don’t see why we are doing this now. But how can I not support the writers?” he said.
Here are the full statements from the WGA’s Goodman and ATA’s Stuart.
“I want to take a few minutes to share with you how the WGA views this franchise agreement negotiation. And I want to thank you by acknowledging the unusual difficulty of this situation. The chief difficulty being that no one in this room has any experience with negotiating this agreement. We recognize that our analysis of the problems is something many of you have taken personally, and we genuinely appreciate your willingness to listen and to try to address the issues.
Our AMBA expires in just over three weeks. There is time to make a deal, and we commit, as you have, to making every effort to do so. To that end we have a comprehensive counterproposal for you.
But before we present it, I need to be very honest about where we stand today. While we appreciate the tenor of Jim Gosnell’s remarks on Tuesday, we disagree with most of your proposed solutions. Our progress here depends on honest communication, so I am respectfully going to tell why we disagree with your “Statement of Choice” perspective. We think, along with industry consolidation, your fundamental conflicts of interest are at the heart of the problem of writers’ overscale pay. By denying any responsibility for the problem, you are abandoning your fiduciary duty and failing at the admittedly difficult job the WGA delegates to you: maximizing writers’ overscale pay.
The negotiation, if it is going to succeed, cannot just be platitudes about empowering individual client choice. Choice is only a real choice if an individual writer has the power to exercise it in the face of a powerful company or agency. Very few do. All of your proposals ask individual writers to do things that have already proven mostly impossible, like having a real choice in agency packaging and producing deals. Even something as simple as our proposal that you provide the Guild with the necessary information to enforce the MBA is unacceptable to you without the burdensome and unnecessary requirement of individualized client consent.
Let’s be clear: This is not an individual negotiation. It is a negotiation about how the Guild will delegate its exclusive right to represent all writers as a whole. This committee is empowered to represent all writers in a collective fashion, and we will not accept proposals that allow you to avoid providing all information and transparency to our Guild. It might sound harsh but your proposals remind us of those normally received from anti-union employers, who often attempt to remove the union from the power dynamic while paying homage to individual choice. As I’m sure you are aware, “Right to Work” laws and proposals are regularly presented as being about offering workers a “choice,” when in fact they amount to attacking unions and undermining employees’ collective power.
In short, it is March 14th and we are still speaking different languages on the crucial issue of the role of the Union in protecting the wellbeing of writers.
Now let’s talk for a moment about declining writer income. You mention orders of 8 to 13 episodes as if they are macroeconomic factors totally unrelated to your responsibility for overscale pay. The fact is episodic quotes have been stagnant for twenty years, a factor that has nothing to do with short orders. And in an industry awash with money, writers’ declining episodic quotes and the requirement to work many weeks per episode were completely yours to address. It is not misleading to say that as these problems developed, you did nothing, never said a word to us about the problems or how to fix them, so the Guild had to step in and start regulating options and exclusivity provisions (in 2014) and then negotiate a span provision (2017). We are in effect negotiating overscale income provisions into our MBA. Although we admit the business did change, you have taken the change as something you have no obligation to address.
You also say that stagnation for lower and mid-level writers is not the result of packaging and “affiliated” production, that the data proves that writers working on agency-packaged shows make the same as those not working on packaged shows. This is a false premise. There is no way to compare what writers would make in a world with agency packaging and without agency packaging. Agency packaging is so dominant that it controls the whole market for writers in television. Even when an agency is negotiating for a writer on a show they don’t have a package on, the agency overall is in constant deal-making with the same studios for packaging fees on other projects. Even agencies that don’t package are at a disadvantage advocating for their clients in this system. And the disadvantage of agencies paid directly by our employers doesn’t stop with series television: Hundreds of screenwriters and pilot writers tell us that their agents not only fail to protect them from free work and late pay, but discourage them from reporting it to the Guild. Maintaining “conflict free” relationships with producers and studios too often trumps the well-being of writers individually and collectively. Until incentives are truly aligned again, this will continue.
Your comments about how the highest-paid Guild members are doing feel pretty tone deaf. We all know about the huge deals, but many experienced writers and showrunners in TV have had their pay pushed down close to Guild minimum scale. Most screenwriters don’t have quotes anymore, yet you have refused to give us every deal memo and invoice so that the Guild can defend them. And all this while the agencies take in billions from venture capital, which can only happen when you are extremely profitable. We feel you are saying that even though some of you are doing great, and the companies are doing great, if writers aren’t, the Guild should stop being upset about it.
Speaking frankly, it doesn’t appear you are taking our proposals very seriously. So I will say bluntly, we won’t make an agreement that turns packaging into a false individual choice that each writer is supposed to make. There will have to be a resolution, if one is to be had, that empowers the Guild to defend all writers’ interests. The same goes for producing. The extreme conflict of interest that is embodied by Agencies as producers cannot be dealt with by changing email addresses or calling entities controlled by the agency heads “affiliates.” We want a real solution: Those of you who are owned by venture capital should become separate entities. We are happy to have you as signatory producers, as long as the agency business becomes a truly separate entity.
Since you have commented about our public communication, I want to say that we need to be able to communicate with our members. You obviously have that same right to talk to your clients, and in fact when members asked me in previous weeks whether they should go to their agency’s outreach meetings, I always said yes. We hope we get to a moment in this negotiation where we’re in true deal making mode, and then there will be nothing to say publicly. For the Guild’s part, we’ll know that the parties are truly engaged with each other and moving forward when you move past the rhetoric about “individual choice and empowerment” and take our union as the entity that you must deal with in order to reach a new agreement. I need to remind you that though I’m the one talking, I’m not just talking for myself.
I want to emphasize that any negotiated solution must come from this room and from the real interests and differences of the parties. We are ready to work with you every day to explore the possibility of a negotiated solution.
Unfortunately, it appears at this time that the WGA really doesn’t want to make a deal. While we appreciate their overtures in tone, they didn’t present any meaningful counter proposals today – instead presenting their original “code of conduct” with a different title.
Based on our conversations with hundreds of film and television writers, we’re hearing that they want to have choice and options. This is reflected in the counterproposals and the Statement of Choice the ATA presented this week, all of which are grounded in expanding transparency and enforcement. The Guild is pushing a unilateral mandate that questions writers’ own decision-making ability and will destabilize the entire industry, affecting writers, directors and actors alike. The Guild’s proposals will only weaken our collective ability to continue advancing artists careers and confront the power imbalance created by the dramatic changes in the media landscape.
ATA member agencies remain committed to finding a pathway and will meet again next week with the WGA to try to come to an agreement.