The Writers Guild of America has gone to the Securities and Exchange Commission in its battle with Hollywood’s largest talent agencies over the issue of packaging fees and affiliated production.
The guild sent a letter to William Hinman, director of the SEC’s corporate finance division, the guild accuses WME parent company Endeavor of misrepresenting the number of clients it has in its talent representation units in the IPO prospectus the company filed in May. Endeavor strongly denied the guild’s assertion.
Endeavor states that WME has more than 6,000 clients, but the guild notes that starting on April 13, WME saw an exodus of about 1,400 writer clients.
“We believe this information is material to the risks of investing in Endeavor and must be disclosed. Endeavor’s failure to disclose the number of client terminations and the substantial decline in its total number of clients following WME’s refusal to sign the WGA’s Code of Conduct appears to be a serious misrepresentation,” Tony Segall, WGA West general counsel, wrote in the letter sent Monday.
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Endeavor said the guild was offbase and stood by the number.
“Once again, in an attempt to disrupt our business, WGA leadership is misrepresenting the facts,” Endeavor said in a statement. “Endeavor has clearly stated that it has ‘more than 6,000 clients’. This is not a static number given the fluidity of the client business, and is still accurate today even after the departure of our former writer clients.”
Separately, the WGA on Wednesday sought to tamp down rumors that it would face major financial strains by having to wage legal battles on two fronts, the case the guild filed against the four largest talent agencies in April and the separate lawsuit filed by WME on Monday against the guild. In a message to members, the guild said it anticipated the legal costs and response from WME.
“The WGA has sufficient funds to deal with legal costs of filing and defending these lawsuits,” the WGA wrote. The guild said its annual report for 2018 will be mailed to members on Friday.