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Hollywood Agents Warn of Losses to Writers Without Packaging Fees

The bitter war of words between Hollywood agents and writers continues.

Agents are warning that the Writers Guild of America’s proposed elimination of television packaging fees will hurt writers to the tune of $49 million annually in commissions.

Sources close to the Association of Talent Agents said Monday that the L.E.K. consulting firm has estimated   that WGA members would have had to pay the additional $49 million during the 2017-2018 TV season if their projects had not been packaged. Writers do not have to pay 10% commissions to agents currently on packaged deals.

The report asserted that Hollywood writers, actors, producers, and directors would have been forced to pay a combined $111 million a year out of pocket during the 2017-18 TV season — were packaging to be eliminated due to shifting the commission burden from the studio to the artist.

A source noted that the WGA reported in 2017 it had achieved an additional $130 million for writers in its negotiations for a new master contract — which would have been wiped out if television packaging were eliminated.

David A. Goodman, president of the WGA West, said in response to the ATA report: “It’s good to see the agencies’ own study confirms that packaging is no risk to them. Now they should publicly disclose the amount they make each year from packaging profits.”

Earlier on Monday, the WGA issued report titled “Agencies for Sale,” which singled out Hollywood’s largest talent agencies, William Morris Endeavor and Creative Artists Agency, for allegedly soaring profits.

The reports were issued as the WGA and ATA head back to the bargaining table for a fifth day of negotiations, with an April 6 deadline for reaching a deal to revise the current rules governing how writers can be represented by agents. The WGA is holding a March 25 vote to implement a “Code of Conduct” for agents that includes eliminating agency packaging and ownership of production. Should an agency not agree to the code, writers would be required to fire their agent on April 7.

Agents have accused the WGA of making sweeping conclusions that are “entirely theoretical,” based on anonymous stories and without any statistical evidence to show that writers would be better off if packaging were eliminated.

The WGA has said the agencies’ arguments defy logic: “If an agency can successfully use writer power to negotiate packaging fees that take tens of thousands of dollars out of each episode’s budget and potentially millions on the back-end, why can’t it negotiate for this money to flow to writers in the form of higher episodic fees and better back-end? Packaging co-opts writers’ power to benefit the agency. We are simply asking agencies to exert that same power to benefit writers.”

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