UTA, the entertainment industry’s third largest talent agency, has signed an agreement with the Writers Guild of America, the agency stated Wednesday in a letter to clients. Earlier, a source had informed The Hollywood Reporter of the deal and, on Tuesday night, multiple sources had said talks were in progress.
The agreement, although a compromise in certain aspects, marks a victory for the WGA that may presage an end to the ongoing battle between the guild and the major agencies. WME, CAA and UTA remain locked in federal litigation against the guild, with both sides asserting antitrust claims against the other.
UTA and the WGA will dismiss their cases against each other as part of the deal. The agreement came after UTA co-president Jay Sures reached out to the WGA several months ago seeking to resolve the deadlock, THR has learned.
In a note to members Wednesday (read it below or here), the Writers Guild of America West wrote: “The UTA agreement extends the packaging sunset date to June 30, 2022; until then packaging is only permitted with the informed consent of the writer. The agency can have up to a 20% non-controlling ownership of a production company.” The guild had no comment other than to provide a copy of the letter.
The four largest agencies — WME, CAA, UTA and ICM Partners — had been steadfast in their refusal to sign with the WGA, as the guild’s 2019 agency agreement largely prohibits packaging fees and affiliate production, both of which are business practices key to the large agency model. UTA holds only a minority interest in its affiliated production entity, less than 20 percent, while that cap may be less palatable to WME and CAA. Meanwhile, under the new agreement, new packaging will end in two years, but only if the WGA reaches a similar agreement with one of the other major talent agencies. Existing packages will continue in force, THR is told.
The agencies also contend that the WGA’s preferred approach to the new agreement, which replaced a 1976 pact, requires the agencies to violate client confidentiality by providing excessive data to the union. But UTA obtained a compromise, allowing writers to opt out of data sharing.
In April 2019, more than 7,000 writers fired their agents at the direction of the WGA, and the guild filed suit against the four largest agencies. In the time since, Endeavor, the parent company of WME, had planned and then scuttled an initial public offering.
Amid the fight, the WGA has reached agreements with midsized shops, as well as key boutiques, including Paradigm, APA, Gersh, Verve, Kaplan Stahler, Culture Creative Entertainment, Buchwald, A3 Artists Agency (formerly known as Abrams) and Rothman Brecher – and has now achieved agreement with UTA as well. (The parent company of THR, Valence Media, has a partnership with UTA through Civic Center Media.)
All eyes are now likely to turn to ICM Partners, which is not in litigation with the guild and has no affiliated production entity.
The representation business has taken a financial hit amid Hollywood’s production shutdown. CAA underwent companywide pay reductions, UTA temporarily laid off 171 staffers, Paradigm temporarily laid off 130 employees, and Endeavor laid off 83 staffers in Beverly Hills, per disclosures with the California Employment Development Department.
That economic weakness stands in contrast to the guild’s situation: Its members were pretty much the only entertainment personnel working over the past few months, via virtual writers rooms and the like. And so it appears that the novel coronavirus gets at least some of the credit for tipping the scales.
The full note to members from the Writers Guild of America West is below:
The WGA and United Talent Agency (UTA) have agreed to a new franchise agreement. Therefore, effective immediately, UTA may once again represent WGA members for covered writing services. WGA and UTA have also agreed to withdraw the legal claims each has brought against the other in federal court.
In line with the previous agency agreements the Guild has made, the UTA agreement protects writers in three fundamental areas emphasized since the beginning of the campaign:
Contract, deal memo and invoice information will be provided to the Guild, allowing the WGA and the agency to partner in systematically addressing late pay and free work.
Strict limitation on agency ownership of production entities.
A sunset period that ends the practice of packaging.
The UTA agreement extends the packaging sunset date to June 30, 2022; until then packaging is only permitted with the informed consent of the writer. The agency can have up to a 20% non-controlling ownership of a production company.
You can read a red-lined version of the franchise agreement here (reflecting changes from the Paradigm agreement). Click here for the list of all franchised agencies.
Our goal remains to move the negotiation process forward with the remaining unsigned agencies. We will let you know when there are further developments.
WGA Agency Negotiating Committee
July 15, 11 am PST Updated with the note from the Writers Guild of America West.
Kim Masters, Lesley Goldberg and Borys Kit contributed to this report.