The lead negotiator for Hollywood’s talent agencies has again blasted the Writers Guild and its recent agreement with the Verve agency — and cautioned other agencies against following suit.
Verve defected from the major agencies on May 16 when it became the first sizable Hollywood talent agency to sign the WGA’s Code of Conduct. That gave the guild a win in its standoff with the largest agencies over the issue of packaging fees and ownership of production companies.
In a letter sent to her members Wednesday, Karen Stuart, the executive director of the Association of Talent Agents, warned other member agencies against signing the code by asserting that it gives the WGA too much power.
“The WGA is trying to position this modified Code as a ‘negotiated’ agreement, when it is in fact the same unilateral mandate that gives the guild authority to control your agency’s business,” she said. “This includes limiting your clients’ creative and economic options and requiring agencies to provide clients’ confidential information, among other significant restrictions. The Code is unquestionably not in the best interests of agencies or the writers they represent.”
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Stuart led the agencies at talks that resulted in a near-complete failure to negotiate a deal with the WGA after more than two months of formal talks over efforts to revamp the 43-year-old rules governing how agents represent WGA members. Instead, the ATA has resorted to taking potshots blaming the guild and alleging that the WGA never wanted to make a deal.
The WGA responded Wednesday by saying, “There are a number of important changes in our agreement with Verve that differ from the Code of Conduct, all of which are available for accurate review on the WGA website. Two of the most important to all agencies are the following:
“The contract is in fact a mutual agreement, not a unilateral code. Just like the MBA it has an expiration date and allows either party, if they desire, to reopen and renegotiate the agreement. Somehow the ATA and their attorney miss this change. The agreement also makes significant changes to the conflict of interest provisions, allowing franchised agents to represent both pods and I.P., as long as those clients are not signatory to the MBA. This change was viewed by the parties as mutually beneficial.”
No new negotiations have been scheduled. Hollywood is waiting to see if any other agencies will join Verve, by far the most prominent and largest agency among the nearly 70 that have agreed to the Code of Conduct so far.
The WGA’s campaign to ban packaging fees and affiliate ownership includes a lawsuit, filed by the guild on April 17 against the four largest agencies (CAA, WME, UTA and ICM Partners) and amended on May 20. The guild directed its nearly 15,000 members on April 12, when negotiations cratered, to terminate relations with agents that refuse to sign the guild’s new Code of Conduct.
Stuart also sent out a memo Wednesday from ATA’s attorneys at Latham and Watkins which said, “The Verve agreement continues to include a number of concerning provisions, separate and apart from packaging and affiliates.”
The Latham and Watkins letter also asserted that the Verve agreementn continues to require that an agent’s representation of one writer shall not be “influenced by its representation of any other writers.”
“On its face, this prohibits agents from pairing writer clients with one another (e.g., showrunner and staff writer) to their mutual benefit,” the attorneys said.
Latham and Watkins also noted that the Verve agreement states that no agent shall accept a packaging fee, or any other money or thing of value from the employer of a writer, with the exception of gifts or gratuities that are customary and de minimis.
Latham & Watkins wrote in response: “This sweeping language bars agencies from representing producers who employ writers. This is confirmed by a new section which bars agencies from representing a producer who employs or purchases literary material from a writer on the project. This means that agencies cannot pair writer clients with producer clients on a given project.”
Additionally, Latham and Watkins asserted that both the Verve agreement and the Code of Conduct requires agents to disclose all other writers being submitted to a project for employment, even if those submissions are not public. It said in response, “This is a significant intrusion into writers’ privacy. Under the agreement, agents are required to submit both deal terms and signed contracts for writer deals to the Guild, regardless of whether the clients agree.”