CAA asked a federal judge on Tuesday to end the 19-month standoff between the Writers Guild of America and the major agencies, as settlement talks between the guild and the agency have stalled.
The move comes as CAA has been unable to strike a deal with the guild that would allow writers to return to the agency. Since September, CAA has said it will accept the WGA’s terms, and will agree to phase out the practice of collecting packaging fees over two years, and will divest itself of all but 20% of its ownership stake of Wiip, an affiliated production company.
But the WGA has dug in on the divestiture issue, and no progress has been made since then. In the meantime, CAA says it is losing clients and agents to rival agencies that have come to an agreement with the WGA.
In a letter to its members on Tuesday afternoon, the WGA said the agency’s latest move would not be “helpful” in coming to a deal.
CAA has been arguing in court for more than a year that the WGA boycott is illegal under federal antitrust law. The agency defeated the WGA’s motion to dismiss the suit, and a trial on that issue is now scheduled for next August. But CAA — which like all agencies has been hit hard by the pandemic — says it cannot wait that long for a resolution.
“CAA is losing clients to UTA and other talent agencies the Guilds apparently favor, and CAA agents who represent writers are leaving the agency,” the agency said in its motion. “Now, the Guilds’ recent actions show that the Guilds’ true objective is to settle scores and manipulate the levers of power in Hollywood by favoring certain talent agencies over others, for reasons unrelated to legitimate conflict-of-interest concerns.”
The guild directed its members to fire their agents in April 2019, after the agencies refused to accept a new code of conduct. The new code was designed to stamp out packaging fees, whereby agencies collected money from producers for packaging clients into a project, rather than the traditional client commission. The guild has argued that the structure — which has been an industry standard for more than 40 years — represents an impermissible conflict of interest and has suppressed writers’ wages.
The WGA is also seeking to limit agencies’ ability to expand into film and TV production by requiring that franchised agents own no more than 20% of any production company.
WME, UTA and CAA filed suit in the summer of 2019, arguing that the WGA was coordinating with “non-labor parties” — TV showrunners and managers — in violation of the Sherman Act. The WGA argued that it was representing its members’ legitimate interests, but its motion to throw out the agencies’ lawsuit was denied in January, setting up a trial.
But in July 2020, UTA came to terms with the WGA and dropped out of the case. ICM, also one of the four largest agencies, reached a deal with the guild in August, ratcheting up the pressure on WME and CAA to give in as well.
According to the filing, 18 clients have left CAA for UTA, and 16 writer clients have left for other agencies. The filing includes quotes from CAA clients explaining why they were leaving.
“I just wanted to give you a heads up that I just met at UTA,” one client texted to a CAA agent in October. “Since we last texted it seems an agreement is farther than ever and I need to work. Thank you for everything you did for me and if you ever leave CAA let me know.”
Wrote another: “I really held out, hoping CAA and the WGA would figure out a solution, but alas I needed reps to deal with some things and couldn’t wait any longer.”
CAA also cited the threat posed by Range Media, a new management firm formed by ex-CAA agent Peter Micelli. In a separate declaration, CAA managing partner Bryan Lourd wrote that he had just learned that Damon Lindelof, a former CAA client, had signed with Range Media.
“This is another example of the harms that are presently occurring as a result of the Guilds’ boycott of CAA and their encouragement of managers to poach CAA clients while the Guilds refuse to franchise CAA,” Lourd wrote.
CAA says it has tried to work out a deal with the union, but says the union has refused to negotiate in good faith and is merely seeking to punish CAA.
“Despite the many efforts CAA has made for more than two years, including its full compliance with the same agreement other franchised agencies have signed, the Guild still unlawfully refuses to reunite writers with their CAA agents,” said Richard Kendall, CAA’s attorney, in a statement. “This leaves the agency no choice but to seek the court’s assistance in addressing the issue.”
CAA says it has transferred its production affiliate, Wiip, into a blind trust for the purpose of reducing its stake in the company to less than 20%. CAA informed the WGA of the transfer in a Nov. 11 letter, arguing that would remove that last obstacle to signing the WGA’s franchise agreement. The letter also stated that if the guild did not respond by Nov. 16, “we will have no choice but to ask the Court to address the Guilds’ conduct.”
In the letter to members, the WGA said it would not be held to “arbitrary deadlines.” The guild called CAA’s proposed resolution a “step forward,” but also raised a series of concerns, and said the blind trust may complicate efforts to reach an agreement.
“CAA has signed itself to an irrevocable trust without any input from the Guild,” the letter stated. “That is an act of substantial hubris.”
The guild stated that the arrangement does not include a timeline for divestiture, and does not have a mechanism to ensure ongoing compliance with the 20% threshold. The guild also wants to ensure that TPG — CAA’s majority owner — also does not have a stake larger than 20% in any production entity.
“It is unfortunate that CAA – professional negotiators that they are – has found it impossible over the last few months to engage in the quite ordinary process of exchanging proposals back and forth,” the WGA told members. “But that is how this negotiation will be conducted, if it is to be successful.”
The guild repeated its argument that CAA’s corporate structure poses “deep and fundamental conflicts of interest” that do not exist at the other agencies that have signed the franchise agreement, and said that it would “respond in proper time” to CAA’s proposal.
CAA issued a response Tuesday evening: “We remain ready to meet the Guild at the negotiating table to finalize a deal. If they remain unwilling, we will see them in court.”
The WGA also said it had sent a proposal to WME on Oct. 16, and has not heard back. For now, both agencies are still subject to the boycott.
A hearing on the motion for an injunction is set for Dec. 18. In order to prevail, CAA must show that it is both likely to win on the merits of its lawsuit and that it will suffer irreparable harm if the injunction is not granted. CAA argues that it will in fact suffer irreparable injury if the boycott is not ended.
“CAA’s business is based on intimate, highly personal relationships between individual talent agents and their clients,” the motion states. “Once those relationships are broken and gone, they are irretrievable — and no amount of money could make them whole.”