CAA President Blasts WarnerMedia Streaming Plan: ‘You Are Trying to Take Advantage of Our Clients’

By Dave McNary

Popular on Variety

Richard Lovett, president of Hollywood powerhouse agency CAA, has blasted WarnerMedia’s stunning plan to stream all 17 of its 2021 Warner Bros. theatrical releases on HBO Max at the same time as they play in theaters.

“The blind side Warner Brothers announcement Thursday was entirely unacceptable to CAA and to the clients we represent,” Lovett said in a letter to WarnerMedia CEO Jason Kilar. “You made a decision to release our clients’ movies in an unprecedented manner — a simultaneous release theatrically and on your own streaming service, HBO Max — without consideration of our clients’ desires or contractual rights. It plainly violates the rights of a number of our clients who hold approval rights over distribution plans and streaming selections.”

“You unilaterally determined a value for our clients and their work to benefit the long-term prospects of HBO Max and the finances of AT&T, a choice that our clients did not make and a value decision that is out of sync with the marketplace and other streaming platforms,” Lovett said. “The bottom line is that you are trying to take advantage of our clients to benefit your company. Neither we nor our clients will stand for it.”

The letter concluded by saying, “The leadership of CAA has worked with Warner Brothers for nearly four full decades. At one point, Warner Brothers took pride in the studio leaders’ relationships with artists. Today, the only scarce resource in our business is talent. To insult talent this way is to redefine your company in a way that is a major setback. We reject the deals you have made with yourself on behalf of our clients. Our clients’ contractual rights will be enforced. Our lines of communication are open, but our point of view is clear.”

Earlier Thursday, Kilar vigorously defended the company’s plan to offer day-and-date streaming and theatrical releases for Warner Bros.’ 2021 feature slate, calling it a “defining moment” for a media giant that he thinks needs to make radical changes to thrive in a new era of entertainment.

“In order for this to work, either the box office needs to be there, or if the box office is not there, clearly HBO needs to carry some weight there,” Kilar told Variety editor-in-chief Claudia Eller during a wide-ranging interview on Thursday at Variety‘s annual Dealmakers event. He presented it as a pandemic-driven choice between the industry’s status quo and the needs of consumers who have clearly embraced on-demand streaming options.

CAA had no comment about the letter, which was first reported by Deadline Hollywood. The agency joins the Directors Guild of America, and filmmakers Christopher Nolan and Patty Jenkins in opposing the decision, announced on Dec. 3. Hollywood has been blindsided by the move, which came two weeks after Warner Bros. announced that it would release “Wonder Woman 1984” simultaneously in theaters and on HBO Max on Dec. 25.

Nolan, director of the Warner Bros. films “Tenet” and the Batman trilogy, said, “There’s such controversy around it, because they didn’t tell anyone.”

“It’s very, very, very, very messy. A real bait and switch,” Nolan told ET Online.

Read the full note below:

Jason,

The blind side Warner Brothers announcement Thursday was entirely unacceptable to CAA and to the clients we represent.

So we are clear about what is unacceptable:

You made a decision to release our clients’ movies in an unprecedented manner – a simultaneous release theatrically and on your own streaming service, HBO Max – without consideration of our clients’ desires or contractual rights.  It plainly violates the rights of a number of our clients who hold approval rights over distribution plans and streaming selections.

Your determination to release our clients’ movies on HBO Max at the same time as in theaters effectively torpedoes the theatrical release and dramatically harms our clients’ ability to earn backend compensation, which they negotiated for, expected, and have every right to protect.

You chose to release our clients’ movies on your own streaming service without any input from or discussion with our clients and you made no effort to negotiate with or otherwise seek out market-rate deals with other streaming services.  This is the epitome of a self-interested corporate maneuver intended to benefit your company while wreaking havoc on the industry and ignoring and greatly damaging our clients’ creative and financial interests.

To the extent you negotiated a license fee with HBO Max, which remains unclear, we reject that entirely as that is the job of their representation and is, in many cases, in violation of our clients’ approval rights.

You made a decision about movie distribution based on your opinion about the potential theatrical marketplace when it is impossible to predict that marketplace through the end of 2021.  Indeed, it ignores the very real possibility of a vaccine in Q1 or Q2 2021 that would likely result in a reopened theatrical market with robust demand.

Without any apparent basis, you have taken a contradictory position for the domestic and international marketplaces, seemingly with the belief that the international marketplace is safe and strong enough for our clients’ movies.  In doing so, you have ignored the reality that the compromised domestic theatrical release will hurt films’ international performance, will hurt all of the downstream distribution channels, and therefore will hurt our clients.

You unilaterally determined a value for our clients and their work to benefit the long-term prospects of HBO Max and the finances of AT&T, a choice that our clients did not make and a value decision that is out of sync with the marketplace and other streaming platforms.

The bottom line is that you are trying to take advantage of our clients to benefit your company.  Neither we nor our clients will stand for it.

Worst of all, in a business of relationships, you violated trust and boundary.

In doing so, Warner Brothers has made a statement that relationships with artists and their representatives are not important to the studio.

The leadership of CAA has worked with Warner Brothers for nearly four full decades.  At one point, Warner Brothers took pride in the studio leaders’ relationships with artists.  Today, the only scarce resource in our business is talent.  To insult talent this way is to redefine your company in a way that is a major setback.

We reject the deals you have made with yourself on behalf of our clients.

Our clients’ contractual rights will be enforced.

Our lines of communication are open, but our point of view is clear.

CAA Leadership Group