Writers Guild of America Spent $1.9 Million on Legal Bills Last Year

WGA Agents Contract Tug of War
Gary Musgrave for Variety

Writers Guild of America West spent $1.9 million in the last fiscal year on legal bills as it fought a multi-front battle over agency packaging fees.

WGA West filed its annual report on Monday with the Department of Labor, covering the fiscal year ending March 31.

The report shows that the guild paid $992,912 to the firm of Altshuler Berzon LLP, based in San Francisco, which has led the fight against the major agencies. The guild also paid $845,770 to Constantine Cannon LLP, in New York, and $94,238 to Rothner, Segall & Greenstone, in Pasadena, Calif., which have also worked on the cases.

For the last year, WGA West — and its smaller New York affiliate, WGA East — have been fighting the major talent agencies in a bid to end the practice of packaging fees. The unions argue that when producers pay an agency to package talent for a project, it poses a conflict of interest. The guild adopted a new code of conduct last year that outlawed the practice and barred agencies from owning a stake in production companies.

The guild directed its members to fire their agents in April 2019 and quickly filed a suit in state court seeking to have packaging fees declared illegal. The suit was ultimately dropped. Meanwhile the major agencies — UTA, CAA and WME — filed their own suit in federal court, accusing the guild of abusing its power and instigating an illegal group boycott, in violation of federal antitrust laws.

The guild countersued, alleging that packaging fees amounted to an illegal kickback and a violation of federal racketeering laws. The case has not gone well for the union so far, as Judge Andre Birotte denied its motion to dismiss the agencies’ antitrust complaint, finding a plausible argument that the union had stepped outside the protections for labor activity under the Sherman Act.

Birotte also dismissed most of the union’s claims — including the most incendiary ones — against the guilds. But as the case and the boycott have dragged on, with a trial scheduled for next year, the guild has succeeded in persuading more and more agencies to give up packaging fees. Paradigm, APA, Gersh, Verve and others have signed on to the code of conduct. Last week, UTA also dropped out of the litigation and agreed to sunset the practice of packaging in two years — provided the one other major agency also agrees to do so.

WGA West appears to have the resources to keep fighting for a while. Though the union reported that its total costs for “representational activities” grew from $43.2 million in 2018 to $48.7 million in 2019, the union’s net assets remained flat at $77.8 million. The union had $39.9 million in cash at the close of the fiscal year.

The union collected $35.4 million in dues and agency fees last year, slightly up from $35 million the previous year. It remains to be seen what impact the COVID-19 shutdown will have on that figure next year.