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Writers Guild Continues to Slam Agencies Over Affiliate Ownership

With the Writers Guild of America’s stalemate with talent agencies in its seventh month, the guild has doubled down on the issue of ownership of production.

In a message to titled “The Truth About Agency Studios” sent to members Monday, the WGA’s negotiating committee blasted the leading agencies CAA, UTA and WME for owning the respective production affiliates Whiip, Civic Center Media and Endeavor Content.

Variety first reported in February, 2018, that the agencies moving into production was “fraught” with 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 told its members last April to fire their agents if the agents had not agreed to bans on affiliate ownership and packaging fees.

“Throughout the agency negotiation, writers and the Guild have made it clear that agency-owned production studios are not acceptable,” the WGA said. “This piece of our agenda has often been overshadowed by a focus on the conversation over ending packaging fees. But the insidious threat of our representatives becoming our employers cannot be ignored. In response, some Guild members have prepared a video to explain the evolution of agency studios and why, if left unchecked, their existence will increasingly undermine compensation for all talent.”

The WGA message noted that the practice of agencies being banned from production goes back to 1962, when the Justice Dept., led by Attorney General Robert F. Kennedy, forced MCA out of the talent agent business. The Justice Dept. charged MCA in 1962 with violations of federal antitrust laws with SAG named as a co-conspirator. The accusations were dismissed two months later in an out-of-court settlement under which MCA chief Lew Wasserman agreed to sell the agency business in exchange for being allowed to acquire Universal Studios and Decca Records.

UTA’s participation in Civic Center Media consists of a 19.9% profit participation as part of a joint venture with Valence Media and MRC to develop TV series. The companies announced the venture in 2018.

Currently, more than 70 agencies are allowed to represent WGA members thanks to agreeing to a ban of agency packaging fees and affiliate production. A trio of mid-sized agencies — Verve, Kaplan Stahler and Buchwald — signed deals with the WGA since have April. CAA, UTA and WME recently consolidated their antitrust suits against the WGA into a single action, accusing the union of engaging in an illegal group boycott.

The WGA also said in the message Monday that is was continuing to discuss the affiliate issue with individual agencies. “Our goal remains to sign additional agencies under fair deals for writers as soon as possible,” the guild added.

See the video the guild included in its message below.

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