Hollywood’s major talent agencies are threatening to pull out of further negotiations with the Writers Guild of America over how agents represent writers.
Both sides issued vitriolic statements on Monday, six weeks before the WGA’s 42-year-old agency franchise agreement expires on April 6. The WGA has made it clear that the guild wants members to cut ties with their agents if the agents do not sign on to the new Code of Conduct. The proposed changes spell out rules for agencies to abide by in order to represent WGA members and its leaders have asserted that “no compromise” is possible following a pair of unproductive negotiating sessions on Feb. 5 and 19.
Additionally, the threat of litigation is strong on both sides. The WGA is said to have a draft complaint already sketched out. The Association of Talent Agencies is working with Marvin Putnam of Latham & Watkins on a possible suit.
Karen Stuart, executive director of the ATA, issued the threat to bail out of further talks in a letter Monday to WGA West executive director David Young and WGA West president David A. Goodman that repeated the accusation that the guild is negotiating in bad faith.
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“There are many different ways to achieve a successful deal for ATA and the Guild,” she said. “But not being open to negotiate in good faith, and instead ‘going to war’ will not work. It will hurt your members, and it will hurt others in the industry. We remain ready, willing, and able to negotiate an agreement in good faith. Is the same true for you? Because if it’s not, we don’t see any reason to keep meeting. We await your response.”
Goodman responded by accusing the agents of not making serious proposals at the talks and pointing to a series of anonymous anecdotes from members about problems with agents:
“The WGA never said we were ‘at war.’ Deadline put that in a headline. The fundamental problem here is that when the major agencies hear their clients are collectively upset they refuse to accept there’s a problem. But these anecdotes from writers tell the truth. The ATA has not made ONE concrete counter proposal in negotiations, only vague promises that they will help. We’ve been hearing these promises for a while, and the writers of the WGA are demanding action.”
The new rules proposed by the WGA would effectively end all packaging deals, in which agencies receive both upfront and backend fees, and bar agencies from any financial interest in any entity or individual “engaged in the production or distribution of motion pictures.”
Stuart’s letter, which was signed by the more than 100 agencies repped by the ATA, opened by saying, “We write regarding your recent public declarations that the WGA and ATA are ‘at war’ and your public pledge that there is ‘no room for compromise’ with the ATA. Simply stated, your actions run completely afoul of the value and respect we have long held for the Guild.”
She went on to accuse the WGA of refusing to speak with the ATA for nearly a year before agreeing to sit down for formal negotiations earlier this month.
“…Before we meet again and spend the time and effort to mend the relationship between your Guild and our association that you seem desperately to be trying to break, we need to know that you are actually willing to do so,” Stuart said. “ATA members will not be divided. And we will not play games with our clients’ livelihoods. Writers — our clients, your members — deserve much better than this. We thus remain ready and willing to meet with you — as often and for however long it takes to reach common ground — but both sides must come in good faith.”
“We are committing to do so. Are you? If so, we need you to confirm, in writing and publicly, that you are prepared to negotiate on all issues in good faith with us,” she added.
For its part, the WGA issued Monday an email to members titled “Writers Share Their Experiences With Agency Packaging and Producing” — a series of 19 anonymous members complaining about how they were mistreated by their agents due to agencies allegedly putting their interests first and not being transparent.
“My current show is not packaged,” one said. “One of the producers on the show is represented by an agency who assumed they would split the packaging fee. When this other agency found out they wouldn’t be getting a package fee, the agent called to scream at me. He said, ‘We don’t make our money off the 10%.’ He went on to assure me that they ‘earn’ their share of the package, citing the fact that he had gotten his client (not a writer) to accept a fee substantially below his quote. The agent was bragging about harming their own client. That’s what the incentives created by packaging and conflicts of interest do to writers.”
Another said, “Before I became a working writer, I worked in the packaging department of a major agency. I saw firsthand how packaging influenced the way agents steered their clients’ careers. Problematic situations would come up, like when the agency wanted to move from a partial package to a full package; agents would push writers into packages to maximize the agency’s revenue, regardless of whether it was in the clients’ best interests or even what they wanted.”
The ATA also issued a “Separating Fact From Fiction” document to its members on Monday, attempting to refute Goodman’s statements, including his assertion that agencies have an inherent conflict of interest by having stakes in production affiliates by saying, ““If your agent is your employer, you don’t have an agent.”
In response, the ATA said, “Let’s be clear. This is patently false. No ATA member agency employs writers. None. Rather, some agencies have affiliates — legally separate businesses with separate management and separate operations, housed in separate offices and with separate employees — who perform content-related services. These entities are legally and operationally separate businesses from agencies. Agencies disclose these relationships, and they negotiate with affiliates at arm’s length to ensure offers and deals are as
good, if not meaningfully better, than others in the marketplace.”
“That said, ATA has repeatedly told WGA that agencies are willing to listen to concerns and discuss formalizing some rules of the road to assure clients that their interests will never be compromised,” the ATA concluded. “Agents work for writers – those roles have never and will never be confused or reversed. Agents always put artists first.”