Entertainment Lawyers Nervous After Meeting With Writers Guild Over Agent Feud

Talent Agent Illo - H - 2018
Dale Edwin Murray

A “naive” guild is charting a path that’s “actually worse than a strike,” says one of the attorneys.

The Writers Guild held two group meetings Friday with about 60 top entertainment lawyers to discuss the guild’s battle against talent agents, gatherings that left the lawyers concerned about the guild’s tactics while sympathetic to its issues.

The relatively uneventful meetings contrasted with a gathering the day before between the guild and 100 to 200 talent managers, which attendees had told The Hollywood Reporter was “an abject fucking disaster,” in the words of one. But despite the lower temperature, the lawyers left unsettled.

“The answers [the guild gave] were not satisfactory in any way,” said one of the half-dozen veteran transactional attorneys THR spoke to, most on condition of anonymity. “They don’t seem to understand the industry. They’re going to do real damage.”

“I found myself feeling ill,” said another. “I couldn’t believe my ears.” He added that it was “wishful thinking at best” for the WGA to believe that studios would pay writers more if they (the studios) no longer paid packaging fees to the talent agencies. (Another lawyer agreed, saying the studios “will just pocket” the money they would have paid in packaging fees.)

Instead, continued the attorney, writers would lose out, because they would have to pay commissions to their agents in lieu of the packaging fees the studios generally pay today, particularly in television. And the loss of packaging revenue would result in fewer agents and weaker agencies, he said, less able to stand up to massive studios and streamers.

“It’s completely wishful thinking and kind of insane,” he said. “This is terrifying for me [and] they didn’t seem to have much of a plan.”

“There haven’t been any constructive real negotiations yet,” said Andrew Hurwitz, managing partner of Frankfurt Kurnit’s Los Angeles office. “The general feeling in the room was that the way the guild is playing it is very binary,” in that the WGA says it will not compromise on the issue of packaging fees or on the emergence of production entities affiliated with the agencies. “Their view is, ‘We’ve thought of everything,’” he added. “I don’t think they were looking to the lawyers to find common ground. [But] they have to have some end game other than take it or leave it.”

“People left the meeting concerned that both sides are dug in,” he continued. “That’s not good for the membership.”

“The [guild’s] answers didn’t take a deep dive, seemed to be speculative [and] weren’t very empirical,” said a fourth lawyer. “I didn’t leave feeling comforted [or] with any more knowledge or [their] point of view.”

The guild says both packaging fees and affiliate production are conflicts of interest, while the agencies say that writers — as well as actors and directors — benefit from not having to pay commissions when studios pick up the tab instead, and that production affiliates give writers additional buyers, and often ones that offer better deals than the studios or streamers.

Indeed, WGA East president Beau Willimon, a CAA client, is in business with WME-affiliate Endeavor Content, despite the WGA’s stance. But the guild says that in the absence of a negotiated agreement it will impose a new Code of Conduct on April 7 prohibiting packaging fees and affiliate production, and allowing the WGA to unilaterally change the Code at any time on 60 days’ notice.

The ATA has said few if any of its members will sign on to that, which would force WGA writers to fire their agents or be in violation of guild rules. “It’s going to be chaos,” said a fifth attorney, if the guild forces members to fire their unsigned agents and rely on word of mouth, the WGA website, managers, attorneys and less prominent agents to find work. “A free-for-all,” said another, calling the guild “naive.”

“If this isn’t a case of cutting off your nose to spite your face, I don’t know what is,” he said. “I can’t understand destroying your own representation.” Several of the lawyers expressed concern that writers who fired their agents might not find substitute representation at all, and that many would not be welcomed back if they later sought to reunite with their previous agents.

A sixth lawyer THR spoke to declined to be quoted directly, even anonymously, but expressed sentiments similar to the other five. The WGA, for its part, did not respond to a request for comment.

Many of the attorneys agreed with the guild that there are reasons to be concerned about packaging fees, affiliate production or both, but felt the issues could be addressed by a negotiated solution rather than a blanket prohibition. “Writers should get a piece of packages,” said one.

“The Code is not realistic, but the issues are real,” said Hurwitz. The lawyers acknowledged that agencies were far from perfect, with one saying that while “the majority of my clients don’t want to fire their agents, the agencies have themselves to blame. They were bullies.” Some of the lawyers described agents as hardworking and with clients’ interests at heart, while others emphasized abuses and self-dealing.

Several lawyers took issue with the guild’s claim that it had consulted with entertainment lawyers before embarking on its current course. “Not us,” said one, speaking of the tight-knit talent lawyer community.

“If the WGA gets its way, my clients will be less well represented and I’ll have less leverage [when negotiating for them],” said one of the lawyers. “This is actually worse than a strike.”