The drawn-out drama between the WGA West and the town’s top tenpercenteries has been nonsensical. The UTA pact reflects the basic compromises that seemingly should have been reachable more than a year ago by the experienced group of dealmakers who came together to negotiate a new agency franchise agreement in early 2019. Instead, the companies have blown through millions of dollars in legal fees to fight dueling lawsuits filed against the guild by WME, CAA and UTA and vice versa by the WGA, which also included ICM Partners. UTA and WGA have ended their legal battle per the terms of the Code of Conduct agreement.
Although UTA has conceded on the WGA’s primary issue of banning the practice of agencies receiving packaging fees from producers, UTA has a lot of protection from a favored nations clause that it wrangled. (The WGA West, to its credit, posted a redlined version of the 22-page contract for all to see on its website.)
As in the case with most if/come pacts, UTA agreed to a deal that was contingent on the WGA securing another deal with an outside entity. If that doesn’t happen, UTA isn’t out anything and can walk away from its obligations.
UTA agreed to stop packaging TV and film projects as of June 30, 2022, but only if the WGA has reached a similar agreement with one of the three remaining large agency holdouts: WME, CAA or ICM Partners. UTA now gets a head start on re-signing some of the more than 7,000 writers who fired their agents in April 2019, with no risk that its competitors may one day be able to resume packaging TV series and movies around writers.
UTA also redlined some of the other objectionable items from the agency POV, including the guild having rights to audit agency books (a line-in-the-sand non-starter) and the agreement that UTA clients can opt out of having the agency send all contracts to the guild. UTA also secured a 45-day termination notice clause, while the guild has to give the agency 120 days warning before proposing any changes.
The WGA West’s disclosure last week that it spent $1.9 million on legal fees (not all on its war with the agencies) in its most recent fiscal year, ended March 31, explains why UTA had the leverage to plant that safety net. The bill has now hit more than $1 million for the guild on this battle, and that’s before the discovery process has even formally begun.
From the start, the major agencies’ staunch opposition to the primary focus of the guild’s campaign — to bring a sunset to the decades-old system of lucrative packaging-fee payments, on conflict-of-interest grounds — has been hard to understand. Ask any top literary agent, and they’ll tell you candidly that packages are slowly but surely going away. The business model for the high-budget scripted shows that generate hefty packaging fees and fuel the coffers of WGA members has changed dramatically in just a few years’ time. The big backend score that once came with a show that made it to syndication is disappearing, as Netflix et al. change the shape of the industry. The percenteries battled the guild as much to fight off the precedent of allowing the union to exert so much influence over their operations as they did for the profits generated by packaging, which remain significant but are dwindling fast when it comes to the new productions affected by the agency Code of Conduct rules the WGA implemented last year.
Resistance to the deal on both sides of the table was fueled in part by the bare-knuckle tactics the WGA brought to pursuing its reform agenda once the previous long-standing agency franchise agreement expired in April 2019. The guild handled the outreach and organizing effort for the anti-packaging campaign as it would a tough contract negotiation with the studios. The top agents handling the talks on behalf of the Assn. of Talent Agents were incensed by the guild’s rhetoric likening packaging to a crime and a form of racketeering. The WGA negotiators were equally alienated by the ATA’s initial proposed deal and the fact that agents wouldn’t acknowledge that the packaging process had inherent conflicts of interest and had led to excesses in many instances that were not good for guild members.
The UTA deal came together, by multiple accounts, through the determination of UTA co-president Jay Sures, who had the benefit of a previous working relationship with WGA West president David Goodman, a respected showrunner known for “Family Guy” and “The Orville,” among other shows, and a former UTA client. At a time of upheaval and uncertainty across the industry, both camps had incentive to hammer out the compromise that should have been on the table all along. The pressure of the coronavirus wallop on the showbiz economy also played a part in driving the sides together.
When I asked Goodman what broke the ice with UTA at long last, he said simply: “They called.” The agreement was wrangled over a period of weeks and mostly in secret, until the final few days. “We showed we were willing to make a fair compromise,” Goodman said. “We felt like they were finally our partners in this situation.”
Goodman has every confidence that the WGA will enforce its packaging ban as of July 2022.
When the agency-WGA flap first erupted more than a year ago, I reached out to the industry veteran who was executive director of the WGA West in the early 1970s, the last time the guild took aim at the issue of packaging. Mike Franklin was 95 at the time we spoke briefly on the phone. He didn’t remember many of the details of the packaging battle back then, but he did make a point of saluting Goodman and his contemporary counterpart, WGA West executive director David Young, for taking it on with such gusto.
I thought of that conversation last week when I learned of Franklin’s death on July 20, at the age of 96. There’s no doubt he kept a keen eye on the guild’s moves to the end.