Writers Guild Casts Doubt on UTA Report in Packaging Fee Dispute: ‘A False Premise’

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In an attempt to counter the Writers Guild of America’s claims that agency packaging fees damage writers’ pay, United Talent Agency released a report on Wednesday saying that their TV writer clients were paid more on average on packaged sho…

UTA Tries To Reframe Packaging Dispute Narrative With Data Ahead Of WGA Vote

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With a week to go before WGA members begin voting on a new code of conduct that act as a fatal silver bullet through the heart of the agencies’ lucrative packaging plans, UTA tried to strap on a new Kevlar vest of data Wednesday.
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WME’s Ari Greenburg Says WGA “Not Interested In A Real Negotiation” In Packaging Dispute

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WGA Moves Date for Membership Vote on Talent Agency Code of Conduct

Read on: TheWrapTheWrap.

The Writers Guild of America has pushed back the date of the vote for members to decide whether to impose a proposed code of conduct on talent agents should the guild’s current deal with the Association of Talent Agencies expire on April 6.

Originally set for March 25, the vote, which will be conducted online, will now begin March 27 at 9:00 p.m. and end at 10:00 a.m. March 31.

The guild has also scheduled several member meetings to discuss the proposed code. In Los Angeles, meetings are set for March 26, 7:30 p.m. at the Beverly Hilton, March 27, 7:30 p.m. at the Sheraton Universal, and March 30, 10:30 a.m. at the Writers Guild Theater. In New York, a meeting is scheduled March 27, at 7:30 p.m. at the Tribeca Performing Arts Center.

The Code of Conduct, if approved, would be enforced on April 7, with WGA asking its members to leave any agency that doesn’t agree to remove packaging fees.

Also Read: Talent Agencies Present Counterproposals to Writers Guild in Packaging Dispute

The rescheduling comes after another day of talks between WGA and ATA ended with little progress, as both sides are still digging their heels in when it comes to the key dispute preventing a new deal: packaging fees.

The proposed Code of Conduct would require agencies to remove all packaging fees on any deals involving WGA members, switching instead to agents receiving a 10 percent commission from their writer clients.

Individuals with knowledge of the talks told TheWrap that during the Monday meeting, which lasted less than two hours, the ATA presented a series of questions from writer clients to the WGA that were not answered. Among them was a question over whether writers who do not fire their agents over compliance with the new Code would face discipline from the guild.

With little progress made over packaging, the WGA says that it will consider the questions and points presented by the ATA on Monday and will respond when they meet again later this week, though the ATA says that another meeting has not been confirmed.

Also Read: 6 Things You Need to Know About the Impasse Between Hollywood Writers and Agencies

In a report released Monday morning, the ATA asserted that without packaging fees, writers would have had to pay $49 million more to agents during the 2017-18 TV season as part of the 10 percent commission model that would replace packaging fees as the agents’ main profit model. The report, which was conducted by LEK Consulting, also claims that the gains won by the WGA last year in the latest film and TV contract with AMPTP would have been erased if writers were to pay commissions.

When actors, directors and producers are added in, that total increases to $111 million, and the report notes that this figure assumes that all money saved by studios by not paying packaging fees is passed directly to talent and not diverted to other production costs like visual effects or on-location shooting.

But the WGA, in their own statement released Monday, attacked packaging fees as a “kickback scheme” that have allowed the four largest agencies in Hollywood — WME, CAA, UTA, and ICM Partners — to gain more profit and influence in the industry, as well as attract more private capital investments. They also argue that those investments in turn have led to WME and CAA to launch their own production studios, creating further conflicts of interest.

Also Read: Writers Guild, Talent Agencies End Fourth Day of Talks, Will Meet Again Next Week

“When our agents are studios – when they employ us – their interests are in direct opposition to ours. These agency/studios generate wealth for their investors (and themselves) by maximizing profits and minimizing costs,” read the statement from WGA’s negotiating committee. “Our salaries are one of those costs. When costs and net profits trade off, net profits wins. When the interests of multibillion-dollar investors and individual writers are at odds, multibillion-dollar investors win.”

“The influx of outside capital into the agency business has completed the transformation of our agencies from businesses dedicated to maximizing our revenue to businesses dedicated to maximizing their own. It is a breach of their fiduciary duty to us and a violation of law.”

The guild and the agencies also face a huge divide over how the two sides view the counterproposals that the ATA presented at talks last week, which promised a new system of transparency that would require agents to completely disclose any relationships between their agency and a studio that it has ownership stake in. The proposal also requires agents to get their writers’ approval to be included in any packaging deals before the agents receives a fee.

The ATA has insisted that such a system would give writers more control over how their work is sold to studios, and said in opening statements on Monday that the WGA’s new Code of Conduct is a “unilateral mandate that assumes writers can’t make good decisions for themselves” and would “rob WGA members of choice and decision-making power.”

The WGA, meanwhile, says that the ATA’s counterproposals are aimed at reducing the guild’s negotiating power on behalf of writers, comparing them to “right to work” laws that undermine collective bargaining with the promise of greater individual autonomy.

Also Read: WGA’s New Report on Agencies’ Conflicts of Interest Cites ‘The Walking Dead,’ ‘Who Wants to Be a Millionaire’

“Choice is only a real choice if an individual writer has the power to exercise it in the face of a powerful company or agency. Very few do. All of your proposals ask individual writers to do things that have already proven mostly impossible, like having a real choice in agency packaging and producing deals,” WGA President David A. Goodman said in a statement last week.

During the Monday meeting, ATA Executive Director Karen Stuart urged the WGA to come to an agreement before the current agreement between the guild and agencies expires on April 6.

“We have three short weeks before a dark cloud of uncertainly will hang over Hollywood, and we can’t allow that to happen,” she said. “If we don’t start breaking this down and finding ways to bridge the divide, we will be putting our writers in an incredibly difficult position on April 6. That simply isn’t fair to your members and our clients, and no one wants that to happen.”

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6 Things You Need to Know About the Impasse Between Hollywood Writers and Agencies

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Talent Agencies Present Counterproposals to Writers Guild in Packaging Dispute

Read on: TheWrapTheWrap.

The Writers Guild of America and the Association of Talent Agencies ended a third round of negotiations on Tuesday, hours after the WGA released a 16-page report attacking the packaging fees Hollywood agencies operate on, saying that the fees create conflicts of interest.

The talks came after a series of acrimonious exchanges between the leaders of the two organizations, with the ATA questioning whether the WGA was negotiating in good faith and the WGA in turn saying that the agencies had not provided a set of counterproposals. The ATA came to a Tuesday meeting with such a set, saying that the proposals came after meetings with hundreds of writers.

“If we are to come up with a joint agreement, which I know our clients desperately want us to have, then we need to roll up our sleeves and get to work on a constructive process that will result in an agreement that works for everyone,” said ATA President Jim Gosnell in an opening statement.

Also Read: ATA Insists It Is Not Withdrawing From WGA Negotiations in New Letter

“We need to avoid the name calling and divisiveness that get us nowhere and will only set us back. Your agents are not your enemies, and they do not want to take advantage of you. If that were true, we wouldn’t be here today, and you would not be represented by us.”

The ATA’s proposals include a promise for more transparency between writers and agents in the packaging process and clamping down on deals that involve packaging without the writers’ consent. The offer promises that agencies will not engage in independent film/TV packaging or sales services, or request packaging fees for such services, until the writer is informed of the process and gives it their approval.

The proposals also promise that a similar approach of transparency will be given when handling projects associated with “affiliated entities,” or production companies either created or partially owned by agencies but which operate as separate businesses. As part of the new system, agents will be required to disclose their agencies’ relationships to those affiliates and inform writers that they have the option to ask their agents to make offers to competitors of those affiliates.

Also Read: Hollywood Agents Association Accuses WGA of Attempting to ‘Remake the Entire Industry’

The counterproposals also include provisions to improve working conditions for writers and an enforcement system with streamlined arbitration whenever writers wish to file a complaint. What the counterproposals don’t include is an agreement to completely eliminate the packaging fee system, something that the ATA has for weeks said none of its member agencies will agree to and which the WGA is threatening to eliminate by enforcing a new Code of Conduct that would require such packaging fees to be removed in order for an agency to represent WGA Membership.

In a statement released shortly after the end of negotiations, the WGA called Tueday’s talks “a small step forward,” but cautioned that “all major issues are still on the table.”

“Today the ATA responded to our opening proposals. Today’s session was a small step forward for the parties,” the WGA said. “There is another negotiating session scheduled with the ATA on Thursday, at which time the Guild will make a counterproposal in specific contract language.”

“The response from the ATA is what we expected in a first proposal.  All major issues are still on the table,” the Guild continued. “The agencies couched their proposals as all about an individual writer’s ‘choice.’  However, theoretically writers already have that ‘choice.’  Their proposals require each individual to respond to a powerful agency – that is virtually no choice at all.  The solutions in the new agreement need to be collective through the Guild, not individual.”

The guild will hold a vote on March 25 where members will decide whether to authorize leadership to enforce the new Code of Conduct. If authorized, the Code of Conduct would go into effect on April 7.

In the report released on Tuesday morning, the WGA cited specific examples of TV shows, including “The Walking Dead,” as proof of how packaging fees have harmed writers and showrunners. It includes emails sent between the Creative Artists Agency (CAA) and AMC over packaging fees for “The Walking Dead” when its first season was in development in 2010.

The WGA says that the packaging fees were being negotiated before a contract was finalized with the show’s former executive producer Frank Darabont, who was represented by the agency. The agency also negotiated packaging fees for potential spinoffs such as “Fear The Walking Dead,” which premiered in 2015.

“The emails lay bare the conflict inherent in packaging. Not only does CAA get to benefit from a profit definition that is based on its client’s MAGR [modified adjusted gross receipts] definition, but the agency’s share of profits is actually paid before its client’s as an ‘off-the-top deduction,’” reads the report.

“This means that CAA’s share of profits reduces the pool of profit available to its client. Further, CAA’s client receives no benefit if the agency negotiates a packaging fee on a spinoff of the series,” it continued.

As of writing, the WGA and ATA have yet to release official statements on the results of the latest negotiations.

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6 Things You Need to Know About the Impasse Between Hollywood Writers and Agencies

Read on: TheWrapTheWrap.

On April 6, the contract between the Writers Guild of America and the Association of Talent Agents is set to expire. Negotiations between the two groups, ongoing since last year, have stalled, and it looks increasingly possible that no new deal will be reached.

There are several points of contention between the WGA and ATA, but the main dispute is over the business practice known as packaging. It’s a major source of income for talent agencies, one the WGA wants to end for good.

WGA has scheduled a March 25 vote for members to decide whether to impose tough new rules on agents which could do just that. The proposed rules are strongly opposed by ATA, which is urging WGA members to vote them down.

Here’s where the different sides stand, and what you need to know about where Hollywood’s latest labor dispute may be headed.

Also Read: Hollywood Agents Association Accuses WGA of Attempting to ‘Remake the Entire Industry’

Packaging

Packaging — when an agency starts a film or TV project by bundling talent it represents and bringing them to a studio as, you guessed it, a package — has become a major source of profit for top Hollywood agencies like CAA, WME, UTA, and ICM. The agency who puts the package together receives fees directly from the studio in lieu of commissions from actors, directors, showrunners and yes, writers, often for the life of the project.

But, WGA West President David A. Goodman argued in speech to members in late February that the practice creates a “conflict of interest.” With money guaranteed from studios, Goodman says, the agency is more invested in the success of a project than in the success of a client, which reduces the incentive for agents to negotiate better wages for writers.

“There are more writers at WGA scale, more writers whose quotes have atrophied or dropped, more writers trying to make their year on a short-order episodic series, and more screenwriters required to do outrageous amounts of free work than ever before,” Goodman said.

What’s more, according to Goodman, a recent survey of WGA members found that 75 percent of writers didn’t get their latest job through an agent, a problem he attributes to packaging.

Representatives for ATA did not immediately respond to a request for further comment on the matter from TheWrap, but in a statement Feb 22, it said it is “committed to collaborating on an agreement that will allow us collectively to serve and advocate for our clients’ best interests in today’s Hollywood.”

Also Read: WGA Sets March Vote on Tough New Rules for Talent Agents

WGA Wants a New “Code of Conduct”

Goodman says the guild is preparing to make what he calls a “necessary power grab”: a “code of conduct” for agents that, if approved in the March 25 vote, would go into effect the day after the current WGA-ATA contract expires.

The plan demands that any agency doing business with WGA members ditches packaging and returns to the traditional 10 percent commission model. It also demands that agencies provide the WGA “with all deal memos, all invoices for payment, and open access to the agencies’ books.”

Goodman asserts that the guild “has the legal right to act unilaterally” if no new agreement is reached. ATA rejected that assertion in a statement responding to Goodman’s speech, accusing WGA of “sorely misleading writers in telling them that the Guild has unfettered legal authority to unilaterally impose such restrictions.”

WGA Says Code of Conduct is Not a New Thing

Goodman says that there’s a precedent for this kind of policy in the world of sports.

“All of the major sports unions have similar Codes of Conduct–basketball, baseball, hockey and football,” Goodman argues. “At CAA, which has the biggest sports agency business, all the sports agents must be signed to the Codes of Conduct. We’re not reinventing the wheel here.”

However, ATA calls the code “a sweeping attempt by the WGA to remake the entire industry, restraining not only the business of agencies and their affiliates but also interfering with the livelihoods and businesses of producers, actors, directors, and studios.”

Also Read: Writers Guild Awards Nominees Include ‘Green Book,’ ‘A Quiet Place,’ ‘BlacKkKlansman’

ATA Warns of Damage to the Whole Industry

The ATA is opposed to any agreement that would force the end of packaging fees, and says that no member of the Association will sign on to the proposed code. It also argues that a packaging fee-free system would be bad for the industry, harming “not only their own members but others throughout the entire industry.”

ATA says the code would affect film financing, both at major studios and in the indies, because they would have to build entire wings to deal with financing and packaging instead of paying a fee to have the studios do it. ATA also argues that the new rules would make financing and selling harder for independent producers.

Goodman says the guild has spoken with nine independent producers about whether getting rid of packaging fees would damage how they do business and says that the “overwhelming answer was that agency packaging and producing hurt their business and they’d love to see us stop it.”

TheWrap reached out to SAG-AFTRA and the Directors Guild of America to ask if they are monitoring the WGA-ATA dispute and whether they have contacted the WGA about how enforcing the Code of Conduct would affect their respective members. Representatives from both guilds did not immediately respond to requests for comment.

Also Read: LA Solidarity: How Hollywood Unions Are Supporting the SoCal Teachers Strike

What’s next?

WGA is pushing for another round of negotiations this week, and the ATA says it is open to negotiations at any time “in
good faith if we have the same commitment from the WGA.” But the next meeting has not been set.

If no new agreement is reached, and the code is approved in the March 25 vote, Goodman is calling on all WGA members to leave agencies that refuse to comply. “A membership vote to implement a Code is a vote for all of us to walk away–together–from any agency that will not sign it,” Goodman said.

Will the Writers Actually Buy Into WGA’s Plans?

Goodman acknowledges that asking writers to leave agents isn’t a simple request, especially for those who are on good personal and professional terms with their agents. “There may well be a struggle required and hardship for some of us,” he told members. Goodman insists this is the only way for writers to get paid what they deserve.

“The problems are systemic; they need a systemic solution or the harm to writers will grow worse,” he said.

One writer who spoke with TheWrap on condition of anonymity said there’s skepticism about whether the code would actually lead to more money in the pockets of all writers, especially after the commission cut that agents will have to take.

“I’m not leaving my agent. I don’t know anyone who is,” the writer said. “The thing is, so few writers ever find themselves in a position where any of this s— matters. You have to create a show that goes the distance for any of it to really matter. And very few of us ever do that.”

Trey Williams and Umberto Gonzalez contributed to this story.

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WGA Sets March Vote on Tough New Rules for Talent Agents

Read on: TheWrapTheWrap.

As negotiations on a new deal between the Writers Guild of America and the Association of Talent Agents continue, the WGA has scheduled a March 25 vote for members to decide whether to impose tough new rules on talent agents to curb what it says are systemic conflicts of interest.

WGAW President David A. Goodman announced the vote in remarks posted on the WGA’s website Wednesday. Calling it “a necessary, proper and fair power grab,” Goodman explained that the plan is to ensure that “agency income should be directly tied to writer income,” something he says is “not happening anymore.”

The ATA did not immediately respond to a request for comment from TheWrap.

The problem, Goodman said, is primarily that agencies make most of their money from packaging — when the agency start a film or TV project with talent it represents, and is paid directly by studios rather than through commissions.

“The big four agencies have developed a monopoly that takes the collective power of writers and uses it to enrich the agencies themselves,” Goodman said. “This has resulted in long-term stagnation of writer income and real downward pressure on writers’ quotes.”

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Further, Goodman said, because the agency’s money is then dependent on how well shows do rather than on how well its clients do, “the big agencies’ interest is not with writers, it is with studio profits.” And the problem, he says, is as bad on television as it is for film screenwriters.

The guild wants to establish what Goodman called a “code of conduct” which he says would be similar to that required by major sports unions. The code would: Require agencies and agents to avoid what it says are conflicts of interest, which include practices like packaging, and producing; and require agencies to make available to the guild “all deal memos, all invoices for payment, and open access to the agencies’ books.”

The new code of conduct would ban the practice of packaging as of April, 2019, and allow WGA and its members to regularly audit deals agencies strike on their behalf.

Also Read: Writers Guild Awards Nominees Include ‘Green Book,’ ‘A Quiet Place,’ ‘BlacKkKlansman’

The vote is scheduled two weeks before the current agreement with the ATA expires, and in his remarks, Goodman urged WGA members to stick together and, if necessary, be ready to endure some “hardship.”

“High-profile writers will be asked at a certain point to publicly state support for this campaign and their willingness to walk away from their agency as necessary,” Goodman said. “There may well be a struggle required and hardship for some of us.”

“But I believe that we must accept those risks in order to fix the problems,” Goodman said.

Read Goodman’s full remarks here.

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