Leaders of the Writers Guild of America have sent Hollywood talent agencies a proposed “Code of Conduct” with tough new restrictions on how they operate as agents for writer clients.
The WGA made the disclosure Thursday night in an email to its 12,000 members, a day after announcing that it will hold a March 25 vote on the new rules — which 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.”
The guild is in the midst of intense negotiations with the Association of Talent Agents to renew the WGA’s 42-year-old agency franchise agreement that allows signatory agencies to represent WGA members. The current franchise agreement expires on April 6 — and the WGA has made it clear that the guild wants members to cut ties with their agents if the agents do not sign on to the new Code of Conduct spelling out rules for agencies to abide by in order to represent WGA members.
WGA West President David A. Goodman told Variety that he remains hopeful that agents will agree to the new restrictions, adding that members have been highly supportive of leaders’ efforts to revise the rules. He also said the next round of talks with the Association of Talent Agencies has not been set.
“We’re still very interest in talking to the agencies,” he added. “We’re not abandoning the possibility that agencies will revise their rules.”
The WGA also said in its message that it has abandoned its proposal for a revision in the long-established practice of agencies taking a 10% commission out of the paychecks of writers who make scale. The WGA had proposed that agents could only claim 10% commission if they negotiated a fee higher than WGA scale for the writer but said Thursday that it was swayed by arguments from smaller agencies.
“Protecting the full minimum for writers at scale remains a valid goal,” the WGA said. “Yet many smaller agencies argued persuasively that, without the ability to charge commission on scale, they could not afford to invest time and effort nurturing the careers of entry-level writers.”
The WGA leaders believe that the Code of Conduct structure 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.
CAA’s Bryan Lourd and WME’s Ari Greenburg made presentations at the Feb. 19 session on their expansions into production through affiilates and asserted that using the agency infrastructure gives clients more creative opportunities at more advantageous deals in overhead and distribution than would be offered by a major studio.
Here’s the message that was sent to members Thursday:
Today the WGA is sending all currently franchised talent agencies an invitation to apply to sign the Code of Conduct, which will go into effect after the April 6 expiration of the current 1976 AMBA. We are continuing to talk to the agencies and any additional changes we agree to will be applied to all agencies. The final Code of Conduct will be subject to membership ratification in late March.
The Code largely conforms to the proposals the WGA sent to the Association of Talent Agencies (ATA) a year ago. The proposals banning conflicts of interest remain unchanged. The Agency Negotiating Committee, however, has made three modifications to our original proposals, based on feedback from members and discussions with the ATA and other agencies. We want to draw your attention to these modifications.
The most significant change is the removal of the ban on agencies commissioning scale. This was a difficult decision. Protecting the full minimum for writers at scale remains a valid goal. Yet many smaller agencies argued persuasively that, without the ability to charge commission on scale, they could not afford to invest time and effort nurturing the careers of entry-level writers. And we heard from a significant number of anxious members concerned they and other newer or lower-level writers would simply be dropped by their agencies. Further, since this group of new writers has seen the greatest inroads for inclusion, our fear is the ban could potentially harm under-represented categories of writers who have been historically disadvantaged by our industry. For these reasons and others, the Negotiating Committee concluded that a blanket ban on commissioning scale in the Code is not in the best interest of writers.
The other, minor modifications focus on agents’ obligations to disclose information about potential jobs to their writer clients. The original proposals prohibited agents from submitting their clients for jobs unless the underlying intellectual property had been secured by the producer. Under the current Code of Conduct, agents will have to disclose whether the rights to underlying property have been acquired by producers so members can decide whether they want to take the job. In addition, the Code of Conduct requires the agent to disclose the names of any other clients that are employed or are seeking employment on the same project if the writer client asks for this information.
We wanted to let you know about these changes and the opportunity now available for agencies and agents to apply to sign the new Code and ensure their franchise post-April 6th.
WGA-Agency Agreement Negotiating Committee
Chris Keyser, Co-Chair
David Shore, Co-Chair
Meredith Stiehm, Co-Chair
Deric A. Hughes
Tracey Scott Wilson
Patric M. Verrone
David A. Goodman, President WGAW, ex-officio
Marjorie David, Vice President WGAW, ex-officio
Aaron Mendelsohn, Secretary-Treasurer WGAW, ex-officio
Beau Willimon, President WGAE, ex-officio
Jeremy Pikser, Vice President WGAE, ex-officio
Bob Schneider, Secretary-Treasurer WGAE, ex-officio