Industry Braces for ‘Wrexit’ if WGA, Agents Don’t Reach Deal

As the clock ticks down to Saturday’s deadline for the Writers Guild of America and talent agencies to reach a new franchise agreement, anxiety is rising over the impact on employment and dealmaking if writers and agents wind up parting ways.

Industry sources said there have been back-channeling efforts among a handful of prominent showrunners and screenwriters to nudge the WGA and Association of Talent Agents toward an agreement. There’s been a suggestion floated that the agencies divert a percentage of their packaging fees to the guild in the form a contribution to the WGA’s pension and health fund.

Sources stressed that those backchannel efforts do not appear to be sanctioned by the WGA. Instead they are a sign of the growing concern about the ripple effects of what some industryites have taken to calling “Wrexit,” a reference to Britain’s messy Brexit process of removing itself from the European Union.

The WGA announced at midday Sunday that its members had voted overwhelmingly to support tightened restrictions on their agents. The vote was 7,882 in favor of creating a new Code of Conduct for agents representing WGA members with 392 voting against — better than 95% support among those voting.

The WGA and ATA are up against a deadline of midnight P.T. on April 6 to set a successor franchise agreement that allows talent agents to represent WGA members. The WGA aims to revise its decades-old rules to bar agencies from taking packaging fees from production entities on TV series and movies, and the guild seeks to bar WGA members from working with talent agencies with parent companies active in the production arena. The WGA maintains that both packaging and affiliated production are an inherent conflict of interest for agents and a violation of their fiduciary responsibilities to writer clients.

Numerous agents said the volume of communication from writer clients has stepped up dramatically in the past few days. Studios are also eager to get deals wrapped up before Saturday. Writer clients “are asking me to push through deals” before the deadline, said a top literary agent on Tuesday morning. “We are going to leave money on the table if we rush.”

There had been rumors that agencies were seeking to retaliate by refusing to close deals for the more than 800 writers and screenwriters who signed a letter of solidarity with the guild published March 22. That notion drew scoffs and angry denials from top representatives at the Big Four agencies at the heart of the WGA dispute: WME, CAA, UTA and ICM Partners.

“Clients are nervous,” said a veteran Big Four literary agent. “They’ve been calling us non-stop.” The WGA’s unveiling on Monday of the Submission System database designed to help connect writers with potential employers did little to assuage those fears, multiple sources said.

Another big question coming in to sharp focus as the deadline approaches is how the WGA’s hyphenate members will handle a potential break with agents. Many WGA members are represented by agencies as writers and producers and in some cases as directors and actors. The guild has said it will ask members to cut ties with agents that won’t agree to its new Code of Conduct, to be implemented if a franchise agreement renewal can’t be reached by April 6.

The guild has acknowledged that it can’t ask writers to leave agents for representation in areas other than writing. “But make the decision that is best for you,” the WGA states in an FAQ on the agency standoff posted on the WGA West website.

The representation dynamics are complicated by the fact that most of the dealmaking done by agents for hyphenate writers involves securing fees for their work as producers and other duties beyond the scope of writing. The WGA’s master film and TV contract sets the minimum fees for the array of writing job classifications. The big money for showrunners comes from agents negotiating overall deals and per episode fees that cover their services as producers and in other disciplines.

The WGA has grappled in the past with the question where the line between writing and producing lies for writer members. Some feel that any work done by a WGA member is inherently a form of writing because even purely productorial tasks involve editorial judgment.

But the notion of separating fees for writing with those of other job descriptions is recognized in the WGA’s annual dues structure. Those dues are calculated as 1.5% of a member’s earnings from writing only, not for income derived from producing or other work. This gap has been a source of debate as to whether the WGA’s highly paid compensated members should pay more, proportionally speaking, than lower-level writers who rely strictly on writing jobs.

One showrunner who has been publicly supportive of the WGA said that he is wrestling with the fact that the biggest hardship if the major agencies and writers part ways will fall on the lower- and mid-level writers who are already feeling the pinch from broader industry shifts. Prominent writers whose income is guaranteed by an overall deal at a studio, or those with enough of a track record to be courted in the Peak TV hiring frenzy will not want for work in the current environment.

“Who’s it going to hurt? Staff writers and executive story editors. Those are about the only writers who depend on their agents for jobs and for negotiating writer fees” above guild minimums, the showrunner said.

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