7:08am PT by Eriq Gardner
UTA Bows Out of Litigation Between Agents, Writers
Agents are not united. On Friday, United Talent Agency broke ranks by withdrawing from an ongoing lawsuit in California federal court against the Writers Guild of America.
It was a little more than a year ago when a negotiating impasse between agents and writers led to court action. The WGA demanded that agents no longer collect producer-like packaging fees nor own content through sister companies. Both practices, in writers' eyes, amounted to a conflict of interest. Unlike most disputes quickly settled upon posturing and brinksmanship, this one has shown legs and upset many long-standing relationships in the representation business. Each side accused the other of violating laws on fair competition.
Arguably, the agents have been faring better in court than the writers. Earlier this year, a federal judge rejected the writers' first attempt to nix agents' antitrust claims. Then, in April, the WGA lost most of its own claims because of a lack of standing, plus a judge's skepticism that when studios compensate agents for packaging talent into a project, such practices amount to bribes, kickbacks or racketeering activity.
The case is hardly over, with amended pleadings currently the subject of a judge's consideration, but time is ticking, and the entertainment industry is hurting because of the COVID-19 pandemic. In other words, the point of leverage may have shifted.
Last week brought the potentially breakthrough development that UTA had reached a deal with the WGA. Among the highlights, UTA would have the ability to maintain up to a 20 percent non-controlling ownership of a production company, and the agency would sunset packaging two years hence so long as the WGA could get another big agency (WME, CAA, or ICM) to accept the same.
Attention now shifts to which big agency follows UTA on the dealmaking front.
In the meantime, UTA's lawyers at Paul Hastings and Mitchell Silberberg & Knupp, have filed court papers stipulating to a voluntary dismissal.