Agencies Up Packaging Fee Revenue Share in Talks With Writers

Hollywood Sign - H - 2019

The WGA requested a redlined copy of the proposal amid a possible sign of progress between the parties.

On Friday, the negotiating parties for the Writers Guild of America and the Association of Talent Agents met at the SLS Hotel in Beverly Hills for a roughly 40-minute negotiation that appeared to show some incremental progress.

As the talks ended, the WGA requested a redlined copy of a sweetened revenue sharing deal proposed by the agencies six weeks after the last time the parties met. According to a senior agency source, the guild negotiators did not ask any questions at the meeting.

“It’s been eight weeks and one day since the guild instructed its members, our former clients, to fire their agents,” said CAA co-chairman Bryan Lourd, opening the session. “It might not have been necessary to disrupt so many peoples’ lives and their ability to further their careers as well as pay their bills … . Today, we hope to turn the page.”

The agency proposal included sharing two percent of packaging fees with lower- and mid-tier writers, which is more than double their last proposal. However, the guild has been adamant that it wants an end to agency packaging fees altogether.

The ATA had no comment and the WGA did not respond to a request for comment. However, the WGA sent an email to its members Friday afternoon.

“This morning the Negotiating Committee received proposals from the ATA,” reads the email. “Although there was cause for concern, including a revenue sharing proposal that instead of 1% is now 2%, the presentation was wide ranging and complex. We have asked for contract language on their proposals in order to formulate the appropriate response. As we’ve stated, whatever solution we find, it will have to address conflicts of interest and realign agency incentives with those of their writer clients.”

According to the senior agency source, the ATA also proposed more transparency regarding affiliate production deals (including the obligation to shop to competitors) and packaging fees. The proposal included a $6 million inclusion fund to increase diversity among writers and a requirement that packaging can't be done without a client's consent. The agencies are looking for a five-year term for the agreement. 

Regarding affiliate production, Lourd said, “We believe the existence of these companies (and as many companies like them that we can all collectively make possible and nurture) are essential to the future of artists’ independence from corporate distribution platforms where ownership and creative autonomy is quickly being destroyed.”

Optimism had sparked May 22 when WGA West president David Goodman accepted the proposal from UTA co-president Jay Sures, his former agent, that the parties meet and attempt to restart talks that failed April 12. But the day after that exchange, WME parent Endeavor announced plans to go public, a move the WGA had previously blasted as “leveraging [writers] into assets for investors.” And the Endeavor move heightened rumors that UTA may buy a mid-tier agency, Paradigm, in order to further diversify and bulk up — measures that would serve as hedges against the loss of writer clients.

Those aren’t the only factors that are making talks difficult. The WGA has previously rejected the idea of sharing packaging fees with the agencies and the concept of allowing affiliate production or packaging fees at all, even if subject to greater transparency and to writer choice.

Meanwhile, over 7,000 WGA members have fired their agents on orders from the guild, and the WGA’s packaging fee lawsuit against WME, CAA, UTA and ICM Partners is slowly making its way through the legal system, with CAA having responded in part to the WGA’s amended complaint and additional agency filings expected soon.

Writers have been using online resources, personal networking and managers and lawyers as a substitute for agents during broadcast staffing season, now underway, and that seems likely to be the mode for the June-August development season, as well.

One agency with significant writer clients, 30-agent Verve, has signed the WGA’s new code of conduct that, among other things, prohibits packaging fees and affiliate production, but the four largest agencies have refused, and three mid-tier shops — Paradigm, APA and Gersh — have said they will not do so, either. On May 22, the ATA released a memo from its attorneys arguing that the code, although somewhat revised from an earlier iteration, “continues to include a number of concerning provisions, separate and apart from packaging and affiliates,” criticisms which the WGA rejects.

Lourd's full opening remarks are below.

June 8, 2:20 p.m. Updated to clarify that the WGA asked for a redlined copy of the proposal.