Writers Guild Sets Vote Targeting Talent Agents: "We Are Making a Power Grab — Divide and Conquer"

Writers Guild of America Building - Publicity - H 2017
Courtesy of WGA West

"We will negotiate with the agencies," says WGA West president David Goodman, but ahead of a planned March 25 action, "there is no meaningful compromise where conflict of interest is concerned."

Just a day after the Writers Guild of America and the Association of Talent Agents held a meeting that an agency-oriented source described as “a step in the right direction” towards a negotiated renewal of the WGA-ATA agreement, the guild posted video, audio and text of a Feb. 13 speech to members by the organization’s president that makes clear the union is now at war with the talent agency community, particularly the big four agencies.

“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,” said WGA West president David Goodman. “There may well be a struggle required and hardship for some of us.”

A negotiated agreement is unlikely, said Goodman, who said he would ask the membership to vote March 25 on a mandatory Code of Conduct for agents that would uproot large talent agencies’ current business models by prohibiting the packaging of films and television series and prohibiting production-type activities. The effect would be to split the ATA, with WGA members (and perhaps some individual agents) forced to move to smaller agencies while large agencies pondered what to do come April 6, when the current agreement expires.

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

He continued: “Yes, we are making a power grab. A necessary, proper and fair power grab. As the agencies have taken our collective power and used it to maximize their power and income, we have to take our power back and make sure it is used to maximize our incomes.”

Goodman also made clear that he anticipates hand-to-hand combat. “We expect to sign up many of the smaller agencies [to the Code of Conduct],” he said. “Regarding the big four, we will seek your help to organize key agents to make the move to independence so they can keep working with you if their agency won’t sign our Code of Conduct. … [O]ur collective power here is the power of divide and conquer.”

The ATA, or the big four agencies, might respond with litigation, but to what effect is unclear. Goodman argued that the guild has the right to regulate talent agents, and indeed, a 1981 US Supreme Court decision upheld Actors’ Equity’s regulation of talent agents in the theater business.

The guild argues that television packaging, in which a studio pays fees to an agency rather than the agency commissioning the writer’s salary, is a conflict of interest because “the agency has no financial incentive to get TV writers more money.” In features, agencies sometimes collect a fee from producers as well as commissioning the writers and other talent, said Goodman. Agencies can end up making more money on a show than the creator does. But the agencies counter that writers benefit by not having a 10 percent commission taken from their salaries.

Packaging is a decades-old practice and involves a number of agencies beyond the big four (CAA, Endeavor/WME, UTA and ICM), but the guild is also taking aim at a newer area that so far only the three largest agencies are engaged in, production-type activities that can include financing and owning content. Everything old is new again, it should be noted: In the late 1950s, talent powerhouse MCA acquired Universal Pictures and other production assets. The Dept. of Justice frowned on that and forced a divestiture on antitrust grounds, but Goodman expressed doubt that the DOJ would do likewise today.

The agencies argue that these activities create new buyers, and that many current buyers are themselves conflicted, as they are studios that are under the same corporate umbrella as the networks they sell to. That relationship leads to lower license fees, or even fictive, notional “implied license fees,” which in turn reduces income to showrunners and others who receive a share of the license fee (i.e., a profit participation).

But the guild says that when agencies move into production, the agent or her corporate colleague becomes both the boss and the agent of the writer, an untenable conflict of interest. “There is no meaningful compromise where conflict of interest is concerned,” said Goodman.

The guild has made several dozen other demands, one of which is also particularly contentious for the agencies: The WGA is insisting that when writers are paid at the union scale minimum rate, as is often the case for TV staff writers, that their salary should not be commissionable. Many people in the entertainment community are familiar with the concept of “scale plus ten,” i.e., paying talent at least 10 percent above scale so that the agent commission does not invade the minimum, but this practice applies primarily to actors. The WGA move could force studios to adopt the same approach to writers.

The trigger for what’s looking to be the WGA’s most assertive action since the 2007-08 strike was the formation of WME’s production-activity affiliate, Endeavor Content, in October 2017. That sparked a series of meetings, and then a notice of termination from the guild in April 2018 that started a 12-month clock ticking down to April 6.

If writers leave their agents, how will they find work? Goodman said in his speech that 75 percent of writers responding to a 2018 WGA survey reported that their agent hadn’t helped them get their most recent job. He added, “We also have to be prepared to help each other in every way possible to deal with the dislocation of looking for work during a period where some of us will need new sources of information in order to connect with other writers and jobs. Showrunners in particular, but also prominent screenwriters and captains will be asked to lead, to help other writers.”

The ATA and WGA intend to continue meeting, according to a source, but no specific date had been set when their meeting ended Tuesday.