Hollywood Action: Writers to Fire Agents Over Fee Deadlock – The Wall Street Journal

Hollywood Action: Writers to Fire Agents Over Fee Deadlock - The Wall Street Journal

Hollywood Upended as Unions Tell Writers to Fire Agents

The Writers Guild of America late Friday told its 15,000-strong membership of television and movie writers to fire their agents after it was unable to convince the majority of Hollywoods talent agencies to halt practices the union alleges are unethical and illegal.

That was the instruction the Writers Guild of America gave to its 13,000 members on Friday, after talks between the Hollywood writers and their agents broke down hours before a midnight deadline.

Dave McNary Film Reporter @Variety_DMcNary FOLLOW Dave's Most Recent Stories Mindy Kaling, Priyanka Chopra Teaming on Wedding Comedy for Universal Film News Roundup: Leslie Jones, Kristen Bell Starring in Coupon Story ‘Queenpins’ Taron Egerton’s Elton John Biopic ‘Rocketman’ to Premiere at Cannes View All Facebook Twitter Reddit Email Show more sharing options LinkedIn WhatsApp Print Pin It Tumblr CREDIT: JSSImages/BEI/Shutterstock Leaders of the Writers Guild of America have told their 15,000 members to fire their agents.

The sudden end to negotiations upended a way of doing business that had been in place for more than four decades.

The fight had been brewing for a year. The Writers Guild of Americas Los Angeles and New York branches accused the agents of enriching themselves at their clients expense and demanded that they agree to a new code of conduct.

If the agents believed that the movie and television writers threat to break the bond between them was a mere negotiating ploy, they learned it was a genuine stance when the talks fizzled out late Friday afternoon. The Association of Talent Agents, the group representing the major agencies, offered concessions in recent days, but their efforts were not enough to keep the two sides at the table.

In an email blast sent to its members at the end of the failed talks, the Writers Guild of America said, There is no settlement.

We know that, together, we are about to enter uncharted waters, the board of the two affiliated unions wrote. Life that deviates from the current system might be various degrees of disorienting. But it has become clear that a big change is necessary.

The failure of the WGA and the Association of Talent Agents over the past two months to reach a deal opens the door to a potentially chaotic landscape this weekend.

The unions instructed members to sign a form letter that will allow them to fire their agents individually. The Guild will forward all letters en masse to the appropriate agencies in a few days, the unions said.

Members began sending the dismissal letters to agencies soon after the announcement that negotiations for a new agreement with agencies had collapsed.

The Association of Talent Agents said in a statement released at the end of talks that the planned mass firing will hurt all artists, delivering an especially painful blow to midlevel and emerging writers.

The statement continued: The W.G.A. leadership today declared a pathway for compromise doesnt exist. Agencies have been committed to reaching an agreement with the W.G.A., but, despite our best efforts, todays outcome was driven by the Guilds predetermined course for chaos.

Chris Keyser, Co-Chair David Shore, Co-Chair Meredith Stiehm, Co-Chair Lucy Alibar John August Angelina Burnett Zoanne Clack Kate Erickson Jonathan Fernandez Travon Free Ashley Gable Deric A. Hughes Chip Johannessen Michele Mulroney Michael Schur Tracey Scott Wilson Betsy Thomas Patric M. Verrone Nicole Yorkin David A. Goodman, President WGAW, ex-officio Marjorie David, Vice President WGAW, ex-officio Aaron Mendelsohn, Secretary-Treasurer WGAW, ex-officio Beau Willimon, President WGAE, ex-officio Jeremy Pikser, Vice President WGAE, ex-officio Bob Schneider, Secretary-Treasurer WGAE, ex-officio

The TV writers and agents had been operating under a franchise agreement that took effect in 1976. That agreement was set to expire at 12:01 a.m. Saturday, when the Writers Guild of America would technically break ties with every agency that had not signed the new code of conduct.

The four major agencies — William Morris Endeavor, Creative Artists Agency, United Talent Agency and ICM Partners — had been steadfast in shunning the writers attempt to make serious changes to the structure that has long been in place.

The fight made for an unusual labor battle. The writers unions, which went on strike in 2007 and nearly did so again two years ago, have traditionally had disputes with their bosses at the big studios. This time, they have directed their fury with the people who have served as their advocates and friends.

The guild began holding a series of membership meetings in March of last year to lay the groundwork for the renegotiation of the agreement, saying that there was a growing concern among its members about the “conflict of interest inherent in production and packaging.” In interviews with numerous writers leaving those early meetings, it was clear that membership support for the guild’s goals was strong and growing stronger. “We are united” was the common refrain.

During a programming boom often referred to as Peak TV — 495 shows were available in the United States last year, thanks in part to the rise of streaming — television writers have claimed that their pay is stagnant or going down. The writers blame what they perceive as insufficient compensation on the agencies, accusing them of corrupt business practices.

Linked here is the form letter, in plain and respectful language, which accomplishes this task. Members who are represented by agencies not signed to the Code of Conduct must e-sign the letter. This letter also protects you legally in case of any future commission dispute. The Guild will forward all letters en masse to the appropriate agencies in a few days. Many of you will also want to inform your agents personally. We encourage you to do so and to ask them to sign the Code.

Two specific practices have gnawed at television writers. One is the agents decades-old habit of packaging a roster of talent from their pool of clients for a given project. In return, the agencies waive the usual 10 percent commission fee paid to them by individual clients and collect large sums, called packaging fees, from the studios. The writers claim that these deals allow the agents to effectively pocket money that should be theirs.

The writers second complaint concerns how three of the major agencies — William Morris Endeavor, Creative Artists and the United Talent — have ventured into the production business with the creation of affiliated companies that produce and own content. This development, the writers say, can mean that agents sit across the table from executives who are essentially their colleagues in what the unions call a conflict of interest.

The agencies have called the writers claims preposterous, arguing that their services are needed more than ever in a changing media environment in which Netflix, Amazon and Apple are on the rise.

“The Code of Conduct is a landmark agreement that realigns agency incentives with their writer-clients and eliminates the conflicts of interest inherent in agencies’ receipt of packaging fees and financial interest in production entities. Agencies signed to the Code may only represent writers for a 10% commission and may not receive packaging fees or be affiliated with a company producing or distributing motion pictures.”

The writers have been adamant that the agencies must end the practices they find objectionable, which the code of conduct would accomplish. Last month, 7,882 members of the Writers Guild of America West and the Writers Guild of America East voted in favor of the new code of conduct, with just 392 members voting nay.

Talks for a new deal didn’t begin until February 5, with both sides soon accusing one another of not negotiating in good faith. Serious bargaining only began this week after the April 6 deadline was extended to allow one last chance to avert what the ATA said would have been “chaos” for the industry. That “chaos,” or what the guild calls a “realignment,” is now here.

The rupture between the writers and their agents will introduce disorder to Hollywood. The industry is approaching the so-called staffing season, when the broadcast networks assemble their fall lineups and hire writers to bang out telescripts for sitcoms and police procedurals. Agents are the usual go-betweens for the writers and studios, taking a strong hand in matching writers rooms with the appropriate writers.

Union bosses have in recent days told writers that they would be able to apply for jobs through a web portal set up by the Writers Guild of America, or by empowering their managers or lawyers to make deals on their behalf.

On Friday morning, Latham & Watkins, a law firm representing the talent agents, sent a letter to the union, saying it was unlawful in California and New York for managers and lawyers to take on the role of agents. The note also suggested that litigation could soon be filed in both directions.

There were hints of the coming impasse on Thursday evening after the Association of Talent Agents went public with its counterproposals to the writers. Some people in Hollywood interpreted the associations unusual step of revealing what had been happening during closed-door negotiations as a sign that the two sides were nowhere near a deal.

With their counterproposals on Thursday, the agencies suggested that they wanted to continue with packaging and running their own affiliated production programs, but they were willing to make their practices more transparent.

For shows with packaging arrangements, the agencies said they would share a percentage of their back-end profits with writers. More specifically, the agents said 80 percent of that share would be funneled toward writers who did not participate in profits on the series. The remaining 20 percent would go toward initiatives meant to improve diversity in writers rooms.

On the production affiliate programs, the agents vowed to be more transparent and to meet with writers four times a year to discuss whether a show made with agencies sibling companies was benefiting writers. After two years, according to the counterproposal, if the unions continued to believe that writers were not doing well under the arrangement, they would have the right to reopen negotiations on the matter.

The writers unions found both offers unsatisfactory. David Goodman, the president of the West branch, said that the revised packaging offer was not a serious proposal and that the production affiliate offer was unacceptable.

Many bystanders — studio executives and producers — have likened the writers strategy to Brexit: unyielding, but where will it lead?

We will not only stand together, we will stand up for each other, lean on each other, the unions said on Friday. We can do this.

TVs New Golden Age Produces Financial Drama: Writers vs. Their AgentsApril 5, 2019ImageAdvertisement


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