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WGA Plans March 25 Member Vote on Talent Agency Rules

Leaders of the Writers Guild of America plan a March 25 vote for members to decide whether to implement tough new restrictions on how Hollywood talent agencies as operate as agents for writer clients. The vote comes as the guild is in the midst of pitched negotiations with the Association of Talent Agents to renew the WGA’s decades-old agency franchise agreement that allows signatory agencies to represent WGA members.

David Goodman, WGA West president, disclosed the plan for the vote in a message distributed to guild members on Wednesday. The WGA and ATA held a long face-to-face session on Tuesday and reportedly made progress on smaller issues. But the big hurdles remain the WGA’s desire to eliminate the practice of agencies taking packaging fees for helping to assemble series. The WGA also wants to curb the expansion of companies affiliated with talent agencies into the content production and distribution arena.

The March 25 vote will take place two weeks before the current franchise agreement expires on April 6. Goodman’s message to members made it clear the guild wants members to cut ties with their agents if a deal can’t be reached. If the franchise agreement is not revised, the guild aims to establish a Code of Conduct spelling out rules for agencies to abide by in order to represent WGA members.

During the past year, the WGA has been pressuring Hollywood’s agencies to revamp the rules for agents due to affiliates of Hollywood’s two largest agencies — WME and CAA — moving aggressively into production, creating 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 12,000 members of the Writers Guild of America were notified Wednesday about the March 25 vote through a message about  renegotiating the franchise agreement with the talent agencies.

“Our goal is to attain a new agreement that eliminates conflicts of interest,” the message said. “We will also require the agencies to provide writer contracts, invoices and other information, and to work with the Guild to enforce contracts and protect writers’ interests.”

The WGA and the ATA held negotiations on Feb. 5 and Feb. 19. WGA proposals would effectively end all packaging deals, in which agencies receive both upfront and backend fees, and bar agencies from any financial interest in any entity or individual “engaged in the production or distribution of motion pictures.”

Wednesday’s message included a link to the speech delivered by Goodman at the Feb. 13 member meeting in Los Angeles.

“The simplest way I can begin is by saying something fundamental is wrong in the agency business: writers are being hurt, and it is the right and the responsibility of the WGA to fix what has gone wrong,” Goodman said. “I repeat, it is the Guild’s responsibility to writers to ensure that every one of us will be properly represented by the agencies.

“I don’t take lightly the recommendations I make to you today,” Goodman added. “They amount to the Guild fully asserting its legal authority as a union to oversee how agencies represent writers. The biggest agencies, the so-called big 4, ICM, UTA, WME and CAA, will not be happy about that. And there may well be a struggle required and hardship for some of us. But I believe that we must accept those risks in order to fix the problems.”

Goodman concluded the speech by saying that agencies need to stay far removed from any interests in productions that employ their clients.

“If they prefer to be studios, they can get out of the agency business,” he added. “We can demand the deal we deserve and the agents will still make plenty of money. I know we can win this. But, as everything we do in this union, it’s up to the union, it’s up to you.”

The WGA’s messaging to members comes a day after the sides met at a Los Angeles hotel for a session that included presentations from top industry agents on how the talent agency business has evolved and the level of activity — from packaging to arranging financing to selling — that agencies do for clients in the shrinking traditional independent film business.

As part of the franchise renegotiations, the WGA has also taken aim at the long-established practice of agencies taking a 10% commission out of the paychecks of writers who make scale. The WGA proposed that agents could only claim 10% commission if they negotiated a fee higher than WGA scale for the writer, on the theory that the union’s master contract set the floor price for the writers job.

Elliot Stahler of Kaplan Stahler Agency made an impassioned speech about how the end of scale commissioning would disproportionately hurt smaller agencies that survive by grooming young writing talent into stars. Eliminating scale commissions would mean agents could spent years working for free — a predicament that the guild rails against when it comes to studios pressuring scribes for free polishes and rewrites.

Stahler’s reasoning is said to have resonated with the guild members who are on the negotiating committee, a list that includes former WGA West president Chris Keyser, showrunners David Shore, Michael Schur, Meredith Stiehm and screenwriters John August and Michele Mulroney.

CAA’s Bryan Lourd made the presentation on the independent film business and the agencies’ role in assembling projects on behalf of clients. WME’s Ari Greenburg made a presentation on the company’s expansion into production by the sibling Endeavor Content division housed under the Endeavor umbrella. The goal in both instances is to use the agency infrastructure to give clients more creative opportunities at more advantageous deals in overhead and distribution than would be offered by a major studio. ICM Partners’ general counsel Rick Levy and WME TV business affairs Dan Limerick were among those who spoke alongside ATA chief Karen Stuart in outlining the state of the agency business.

The WGA hopes to implement a Code of Conduct structure that will force agencies to adhere to strict conflict of interest provisions as a condition of representing writers. The guild maintains that the largest agencies have become too dependent on packaging fees on TV series, and to a lesser extent movies, that are paid by studios as a percentage of the show’s license fee and backend profits. Those fees, in the guild’s view, have put agents at odds with all but the top showrunner clients, and incentive to protect packaging fees rather than fight hard for a raise for a mid-level writer on the same show.

Agencies counter that packaging fees are an important source of income to support the many functions that agents play in building and sustaining careers. Top agents also note that the fees have become less lucrative in a changing syndication market, which makes it an unusual time, in the agencies’ view, for the guild to zero in on packaging fees and agencies in general.

Goodman’s speech makes it clear that the WGA’s strategy is to divide Hollywood’s talent agencies among those most dependent on packaging fees — the Big Four, WME, CAA, UTA and ICM — and the smaller agencies that will be more likely to agree to the Code of Conduct terms.

“We think there are many agencies and good, honest agents who will ultimately welcome what the Guild and writers are doing. We’ve talked to people at smaller agencies who do. So we expect to sign up many of the smaller agencies,” Goodman said. “Regarding the Big Four, we will seek your help to organize key agents to make the move to independence so they can keep working with you if their agency won’t sign our Code of Conduct. So I am saying that our collective power here is the power of divide and conquer. The agencies and agents all compete for talent, and when we make clear that we are leaving those who will not change, the change will come.”

If the talks go down to the wire, the WGA-agency showdown would begin just as TV staffing season for the 2019-20 broadcast TV season begins. Multiple sources said the WGA has been informing the active members serving as “show captains” in writers rooms around the country that the guild would try to serve as a clearinghouse of sorts for TV staffing season, helping aspiring writers submit work to showrunners for consideration and vice versa.

Agency sources scoffed at the idea of WGA officials navigating staffing season. “A cockamamie idea,” said a senior Big Four leader. Staffing season amounts to a burst of hiring in a few weeks as pilots are ordered to series. The agents’ role comes in guiding writers on which shows to go out for based on skill and style, and helping showrunners assemble strong teams. That requires a level of curation and understanding that comes from working closely with individual writers.

Sources sympathetic to the WGA cause countered that staffing season isn’t the make-or-break moment that it once was because of the avalanche of shows produced for cable and streaming outlets, which develop and produce shows on a year-round timetable. The unprecedented expansion of the marketplace is one reason why agents are increasingly stretched thin as they deal with a higher volume of clients and business.

The WGA has been laying the groundwork for confronting talent agencies on business practices for more than a year. Last April it triggered a one-year notification period for renegotiating the agency franchise agreement that hadn’t been touched since 1976.

The guild focused on member outreach and education sessions, but it held the ATA at bay for sit-down meetings until this month — in keeping with the WGA’s tradition of using the pressure of a ticking clock as leverage in the negotiating room.

Many showrunners who are frustrated at seeing five- and six-figure packaging fees as line items on series budgets are open to the idea of reform. “That’s money that could be used to hire more writers,” said a seasones showrunner.

Multiple sources said another big problem is the fact that packaging has become so ingrained for top agencies that some showrunners aren’t aware their shows are subject to a package — or increasingly a split package among two agencies with key clients on the show — until the first budget paperwork surfaces.

“It’s immoral,” said another showrunner who has become attuned to the WGA-ATA issue in recent weeks, thanks to the guild’s recent membership meetings on both coasts. Agency sources emphasize there is no guarantee that studios will redeploy money previously allocated to packaging fees back into series budgets. “Nobody’s better at getting money out of studios than us,” said the senior Big Four agent. “It will never happen.”

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