Writers Guild Says CAA Hasn’t Yet Made a Deal

Major talent agency CAA and the Writers Guild of America sent out dueling updates on the status of their talks on Monday, with the union saying the firm has yet to agree to a deal.

“CAA has proposed changes to the agreement that the WGA has not – and cannot – agree to. Agreement will also depend upon reaching resolution of the lawsuits,” the guild’s negotiating committee told its members on Monday.

The guild added: “The WGA will assess CAA’s offer, but not through the press. CAA remains unfranchised.”

Earlier CAA said it made a deal on Monday to represent scribes for the first time since April 2019. “We delivered the signed agreement to the WGA, and we assume that it will be circulated to the appropriate members of the negotiating committee, as well as the membership, shortly,” CAA said.

The agency added: “There is one change we have provided that we think the WGA will be able to agree to. With regard to our investment in the affiliated production company, wiip, we are providing for a commercially practical time to come into compliance with the 20% ownership limitation contained in the agreement. We are unequivocally committed to achieving compliance.”

The terms of the deal would address packaging fees — a practice in which agents are paid directly by a studio for attaching talent to a writer’s pitch — as well as affiliate production, in which agencies have gone into business as producers of content.

CAA financially backs the film and TV studio wiip, which produced Apple TV+ series Dickinson and Facebook Watch’s Queen America, among other projects. The guild has called such affiliate ownership a conflict of interest.

If a deal is made, WME, whose parent company Endeavor owns production company Endeavor Content, would be the lone major holdout on agreeing to terms with writers.

A deal would allow CAA to once again represent writers for the first time since April 2019, when more than 7,000 scribes terminated their relationship with their agents after major agencies could not come to terms on a new deal. The same month last year, a legal war broke out as the Writers Guild sued WME, CAA, UTA and ICM and then WME, CAA and UTA retaliated in a countersuit.

The case is still winding its way through the courts, although ICM is out of the current litigation, having agreeing to terms with the union on Aug. 5. UTA, which struck a deal with writers on July 15 that will sunset the practice of packaging in two years but will keep its investment in affiliate productions, has dismissed its claims against the WGA.

The Writers Guild West, led by president David A. Goodman, has worked over the past year to sign up smaller and mid-size agencies for its “Code of Conduct,” and has been successful in making franchise deals with Verve, Gersh, Paradigm, A3 Artists Agency, Buchwald and other boutique firms.

Like most of Hollywood, the Century City-based CAA, led by co-chairmen Richard Lovett, Bryan Lourd and Kevin Huvane, has been hit by the film and TV production shutdown for several months beginning in mid-March. In April, the company disclosed that it would implement proportional pay cuts for all staff. And on July 28, CAA disclosed that it would be laying off about 90 agents and executives and furloughing 275 assistants and staffers.

In May, the S&P Global ratings agency downgraded CAA’s credit from a “B+” to “B” due to the impact of the pandemic on the representation business. The ratings agency forecast that CAA’s “credit metrics will be materially weaker than we previously expected in fiscal year 2020.”

The Writers Guild’s statement on Monday:

Dear members, 
This morning CAA sent a letter to the WGA’s law firm with a new proposal for a WGA franchise agreement. While we have had a few cordial discussions over the past months, this is the first time CAA has sent a written proposal. CAA has agreed to many of the current (ICM) agreement terms, including the packaging sunset period, and information-sharing.  

However, CAA also sent out a statement to the press and communicated with former clients saying they’d signed the franchise deal. This is not accurate. CAA has proposed changes to the agreement that the WGA has not – and cannot – agree to. Agreement will also depend upon reaching resolution of the lawsuits.

The WGA will assess CAA’s offer, but not through the press. CAA remains unfranchised. The Working Rule 23 order remains in effect for CAA until the WGA officially notifies members otherwise. We will keep you informed of any new developments.

CAA’s full statement on Monday:

Today, we signed the same deal the WGA made with ICM several weeks ago.

We delivered the signed agreement to the WGA, and we assume that it will be circulated to the appropriate members of the negotiating committee, as well as the membership, shortly.

There is one change we have provided that we think the WGA will be able to agree to. With regard to our investment in the affiliated production company, wiip, we are providing for a commercially practical time to come into compliance with the 20% ownership limitation contained in the agreement. We are unequivocally committed to achieving compliance.

On the issue of agency involvement in film financing, we would like to understand the concerns the WGA has around our and others’ work in this vital area for all our clients, our business, and the industry, and what the WGA’s process is in respect to the raising of financing for movies with budgets over $50 million. In the past five years, CAA has secured financing and built critical partnerships for over 300 filmed projects, ensuring they would be made, distributed and marketed. As a result, countless writers’ work has been produced and thousands of jobs have been created. We want to ensure that any future process does not cause lost opportunities for the WGA’s own members and the entire industry. But to be clear, in order to expedite this agreement, we accept its current wording regarding film financing and will work with the Guild to figure out what’s best for continuing to get such films made.

The fact that CAA and the WGA couldn’t resolve the broader dispute in a better way caused personal and professional damage to many relationships and cost millions of dollars to the Guild and the agencies. Countless opportunities were lost for so many people. While litigation is never our desired business strategy, we hoped in this case that it would provide a court’s relatively prompt direction as to the disagreements with the WGA. Unfortunately, a pandemic eliminated the possibility of a prompt day in court.

We respect and recognize the great need for guilds and unions in our industry to look after the best interests of their members. We have worked side-by-side with the WGA throughout our company’s 45 years of existence. The affiliated companies that agencies have sponsored have complied with any applicable requirements of the WGA. The guilds acknowledged the validity of packaging for decades. Writers always had the choice to participate in packages or not.

Our company works with writers, actors, directors, and producers in the television/streaming and motion picture mediums. Many of these artists do multiple jobs in each respective field. The majority of our clients are members of the WGA, SAG/AFTRA, the DGA and many other associations and guilds. We have an ethical and fiduciary duty to all of these clients. We restate our commitment to that responsibility and to collaborating successfully with the guilds in which our clients are members.

There is obviously a lot of good that can come from simply committing to talk to each other regularly and with a common purpose. We want that.

We are asking the WGA, even outside the terms of the franchise agreement, to formalize communication with our company on a quarterly basis going forward. The leaders of CAA will commit to organizing and participating in regular meetings with this guild and all guilds interested in doing so. We suggest these meetings begin as soon as the Guild is available to do so.

The meetings can bring to light specific and real-time problems between the agencies and the Guild. We suggest sharing information on a regular basis with each other about current deal trends, as new information emerges constantly in this new dynamic. We offer help in preparing for future negotiations with the AMPTP and other emerging companies that will employ writers in the U.S. and around the world. As media platforms expand globally, the importance of all local content is obvious. How this guild and all guilds interact with those creators and those markets will determine the amount of leverage they maintain with the global media companies as we move forward.

On February 21, 2020, the federal judge ruling over our case appointed a very well-respected federal mediator that the Guild approved, named Gail Title. Some six months ago, she reached out to the Guild and CAA to commence the mediation. While CAA immediately agreed to participate, the Guild did not, and the mediation never occurred.

Time will tell if the deal the agency community has agreed to with the WGA will be good for the Guild, writers, other artists, our companies, and the community. What was never in dispute was that solid reforms the Guild sought were worthy of consideration. However, good and solid reform in any relationship requires dialogue and factual information with agreed-upon assumptions from the parties involved. Unfortunately, that dialogue has not occurred to date between our agency and the WGA. With a new commitment to engagement, we are hopeful that we will be able to avoid this destructive dynamic in the future.

If there are any outstanding issues going forward, Ron Olson and Anjan Choudhury of Munger, Tolles & Olson will join our litigation counsel, Richard Kendall of Kendall, Brill & Kelly, as our representatives.

Finally, throughout this disagreement, agents and agencies, large and small, have been demonized and vilified. It’s too bad that some representatives of the WGA felt that was necessary. We do not accept those generalizations. There are many great agents across the industry who have chosen careers as writers’ representatives. They love writers and take their jobs seriously.

Thank you to the many Guild members who attempted to help resolve this issue while maintaining professional relationships and friendships throughout. Thank you to Karen Stuart and the Association of Talent Agents for the great service it provides agencies of all sizes.

We are very proud of our company, the clients we work for, and the lives we have chosen. We love the work and trying to make good things happen for our clients and the community. We are going to continue to do that and will always try to do it better.

By signing this agreement, we hope to begin immediately a new relationship with the Guild and its leadership. We want to resume representing the writers who choose to be our clients.

Sept. 14, 12:30 pm PST Updated headline and story with Writers Guild statement.