The WGA, in an email sent Wednesday afternoon, said that the holdout agencies have not agreed to the guild’s demand that they limit their investment in their respective production affiliates to 20%.
CAA had announced on Sept. 14 that it had agreed to sign the WGA’s franchise agreement, but the guild responded by saying it would not accept the terms as presented by the agency. CAA said it had agreed to the same terms that ICM agreed to when it signed a deal with the WGA in August to end the practice of packaging fees within two years.
However, CAA was also asking for the caveat that its affiliated production company, Wiip, would be allowed a “commercially practical time” to come into compliance. The WGA, in its newest email, said that CAA and WME had not provided enough detail and that conversations continue with both agencies.
“Our concerns with each of these agencies center on how they and their private equity investors will limit their ownership of production affiliates to 20% and how they will prove over time that they remain in compliance,” the message said. “As you would expect, reaching agreement with the two agencies most conflicted in these ways requires the utmost care. We are, therefore, consulting experienced corporate merger and acquisition counsel. For there to be an agreement with CAA and WME, we must negotiate divestment terms that absolutely protect writers’ interests.”
The WGA said it needs information on the agencies’ and their investors’ current ownership of affiliated production entities; current direct or indirect ownership of the agencies, and the agreements that govern their relationship with entities such as Silverlake and TPG; copies of existing agreements between any affiliate production entity and its direct or indirect owners; copies of any certificates of incorporation or corporate bylaws or similar documents of the affiliated production entities.
“This information will enable the Guild to evaluate any proposals WME or CAA may make regarding the changes necessary to bring them into compliance with the terms of the franchise agreement,” the WGA said.
More than 80 agencies are now allowed to represent WGA members thanks to agreeing to a limit on agency packaging fees and affiliate production. WGA members were told on April 13, 2019, by WGA West president David Goodman to fire their agents if the agents had not agreed to bans on packaging fees and affiliate production.
Several mid-sized agencies — Abrams Artists (now A3), Rothman Brecher Ehrich Livingston, Verve, Kaplan Stahler and Buchwald, and Paradigm — signed deals with the WGA in the months following the firings. UTA and ICM Partners signed this summer.
CAA, UTA and WME sued the WGA and consolidated their antitrust suits last year against the guild into a single action, accusing the union of engaging in an illegal group boycott. UTA is no longer party to the suit, scheduled to go on trial in August in Los Angeles.
CAA and WME did not immediately respond to requests for comment.