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WGA Members Vote to Tighten Talent Agency Rules

Members of the Writers Guild of America have voted overwhelmingly to support tightened restrictions on their agents — setting up a potentially chaotic scenario a week from now.

The vote was 7,882 in favor of creating a new “Code of Conduct” for agents representing WGA with 392 voting against — that’s more than 95% supporting. The new rules require elimination of agencies receiving packaging fees and having ownership interest in affiliate production companies — demands that the agencies have said are not feasible.

Online voting among the 15,000 members ended Sunday. Unless the WGA and agents can hammer out a negotiated compromise this week, the “Code of Conduct” will be imposed on April 7, following expiration of the current franchise agreement. It will require WGA members to fire agents who have not signed on to the code.

That will create a confusing scenario for the industry as few agents have signed on to the code. Some WGA members have expressed concerns about the WGA’s plan to provide alternatives to members after the members have fired their agents, which include the guild’s March 21 assertion that it has the authority to authorize managers and lawyers to act as agents to negotiate on behalf of members — even though state laws prohibit individuals from acting as an agent without a license.

The WGA and the Association of Talent Agents have held seven unproductive negotiating sessions since Feb. 5. After the most recent session of March 26, both sides issued rancorous statements and blamed each other for the lack of progress. No new sessions have been scheduled.

The ATA issued a brief statement Sunday: “Now that the WGA is past its vote, we look forward to getting back into the room to work through an agreement that serves the best interest of writers, respects their individual choice, and prevents unnecessary disruption to our industry.  We stand ready and waiting.”

The ATA made counter-proposals at a March 21 session that contain provisions for more accountability and transparency by agencies for clients including giving writers consent over whether a television show is packaged. The negotiations are the first effort to revamp the 43-year-old franchise agreement, officially called the Artists Manager Basic Agreement. The talks were triggered last year by Hollywood’s three largest agencies — WME, CAA and UTA — moving into production through affiliates.

WME is part of the same holding company that owns producer Endeavor Content, while CAA supports production entity Wiip. UTA partnered with MRC last year to launch producer Civic Center Media. The issue began gaining traction early last year as concerns emerged about 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 held several membership meetings to rally support for seeking revisions in the franchise agreement, then notified the ATA a year ago that it wished to re-open negotiations on the AMBA — a move that will lead to the agreement’s expiration on April 7.

On Saturday, WGA leaders repeated a threat to sue the major Hollywood talent agencies for alleged conflicts of interest. Officials also said during the meeting that the WGA may seek intervention in the dispute from the California government.

The WGA issued a cloaked threat of a lawsuit on March 12 with the issuance of its report, titled “No Conflict, No Interest,” which targeted CAA, WME, UTA, and ICM Partners and asserted that the four agencies handle 75% of the transactions involving members of the WGA. The report invoked the 1962 antitrust suit by the U.S. Justice Department, which forced MCA to get out of the agency business after a decade of acting as both a producer and an agency.

On Friday the WGA blasted Endeavor, the parent of WME, over a Wall Street Journal report that it is preparing for a possible initial public offering later this year. The guild maintains this is another sign that WME is facing fiduciary conflicts as its parent company prepares to open itself up to greater scrutiny of its quarterly earnings performance.

“Today’s announcement that Endeavor plans to become a publicly-traded company only strengthens the call for the conflicted and illegal practices of the major talent agencies to end,” the guild said. “It is impossible to reconcile the fundamental purpose of an agency — to serve the best interests of its clients — with the business of maximizing returns for Wall Street. Writers will not be leveraged by their own representatives into assets for investors.”

Karen Stuart, executive director of the ATA, warned on March 27 that she expected the WGA to wait until the near the April 7 expiration before beginning to negotiate in good faith. “The WGA has a standard negotiating practice and it is clear they will not bargain in good faith until the clock runs down,” she said at the time.

During the 2017 negotiations with the studios on the WGA’s master contract, the guild reached a successor deal with less than an hour prior to expiration.

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