The Writers Guild of America and Hollywood’s major talent agencies are stepping up efforts to rally TV and film writers as the sides struggle with negotiations on a new guild franchise agreement.
The WGA on Saturday afternoon issued a lengthy FAQ to members on the state of the agency franchise talks. The message aimed to explain what is at stake if the sides cannot reach an agreement by the April 6 contract expiration deadline.
The lengthy memo outlined why the guild feels talent agencies bear significant responsibility for the average annual compensation for TV writers falling in recent years despite the boom times of Peak TV. Top talent agents scoffed at the guild’s repeated assertion that agents no longer have an incentive to fight for higher salaries for mid-level writers because the tradition of agencies receiving packaging fees on TV series that they help assemble for showrunner clients. Those fees, a decades-old practice that goes back to the days of radio, are described by the WGA as “illegal kickbacks.”
“The agencies now make their money from the show being on the air, not by maximizing the earnings of writers. This means agencies’ interests are structurally aligned with the studios, not with their clients,” the WGA memo stated. “Once the packaging fee is negotiated (and agencies block deals until their package is in place), agencies are no longer directly incentivized to continue to advocate for writers. Agency revenue on a packaged show is in fact mostly about studio profits, not compensation for talent.
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“The agency’s package fee is usually negotiated before any deal for writers or other talent. Packaging fees remove the single greatest incentive for agents to fight on writers’ behalf: mutual and immediate shared economic self-interest. The practice of packaging makes a mockery of the proper notion of a fiduciary being trusted to put the client’s interest first. This is what we mean when we say agency interests have become misaligned from writers’ interests,” the memo stated.
Top agents called the guild’s logic flawed and insulting to industry professionals. The primary reason why average writer income is falling is because of the TV industry’s historic shift away from series that run 22 episodes per season to shows with far fewer episodes and shorter lifespans overall.
“The suggestion that agents don’t fight for writers with every ounce of their energy in every situation is laughable and flat-out absurd,” UTA co-president Jay Sures, a veteran TV lit agent, told Variety. “I’ve been doing this work for 27 years, and there isn’t an agent I know, not in any part of our industry representing artists of any kind, that ever stops advocating. Agents simply don’t stop when it comes to their clients. Anyone who claims otherwise either doesn’t know the DNA of an agent or is intending to mislead their own members.”
UTA like other Hollywood agencies has held meetings with dozens of writer clients in recent days in an effort to counter the guild’s coordinated push through membership meetings in New York and Los Angeles that have gone a long way to bring the agency issue into focus for scribes. WME is expected to hold a few town hall sessions next week with clients. In addition to packaging fees, the guild is taking aim at the expansion of the Big Three agencies — WME, CAA and UTA — into to the content production and distribution arena through affiliated companies.
The agencies maintain that conflicts of interest are guarded against through arms length deals between different divisions of large companies. The WGA’s FAQ points to the fact that the largest agencies have taken on investments from private equity giants that demand higher profits through diversification into content ownership.
“If your agency is also your employer, you don’t have an agency. It is impossible for it to fairly represent your interests. It is the clearest imaginable conflict of interest,” the WGA wrote. “Most recently, the three largest agencies have sold equity stakes to private equity funds. These investors seek higher than usual returns on their investments, increasing the agencies’ focus on their own bottom line. This undercuts their focus on the client’s interest.”
The guild’s FAQ reinforces recent statements urging members to not sign representation agreements with agencies without consulting with the guild first. It also details the WGA’s plan to mandate that agents share all writer contracts and related deal information in order to allow the guild to better police studio activity and to enforce writers’ creative and financial rights.
If the guild and the Association of Talent Agents do not reach an agreement by April 6, the guild is asking members to cut ties with their agents. The guild plans to hold a membership vote on whether to implement a new Code of Conduct that agencies have to follow in order to represent WGA members if the franchise agreement is allowed to expire.
The FAQ confirms that the WGA aims to help mitigate the disruption this will cause to TV staffing season by having the guild serve as a clearinghouse for writers seeking jobs and showrunners in need of staffing rooms. The guild has been building out a database of pilots and new and returning series to help facilitate the process. Agents say this disruption will hurt younger and less experienced writers navigating the frenzy of staffing season.
The goal is to allow the guild to provide “market information to writers, bridging the gap between writers seeking work and those hiring writers, and making the way clear for franchised agents, managers, lawyers and Guild staff to be available for writers, even as some agencies make themselves unavailable,” the guild wrote.
The FAQ also makes it clear that the WGA’s strategy is to divide and conquer among the large and small agencies. The financial pressure on smaller agencies from the loss of writer clients could persuade them to agree to the guild’s Code of Conduct. The WGA said it’s overarching goal is to address what it sees as systemic problems that have come to the fore in recent years.
“Our focus is not on individual agents; it is on the flawed system that places agencies in conflict with the interest of their own clients,” the FAQ stated. “A good agent will eventually welcome the systemic changes we’re advocating—some of them have told us so already.”