WME Accuses Writers Guild of Interfering With IPO Plans

Ari Emanuel -Getty-H 2020
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Less than 24 hours since CAA asked a judge to end a writers' boycott, WME made its own motion for a preliminary injunction Wednesday. In the fight over packaging fees and affiliate production, WME alleges that the Writers Guild of America wants nothing less than "to put WME out of the business of representing writers no matter what WME agrees to do to address the Guilds’ pretextual concerns about conflicts of interest."

The court papers also accuse the WGA of tortuously interfering with the talent agency's planned IPO and allege that the guild's leadership is attempting to force the abandonment of in-progress projects for clients. That's because among other things, the two sides are at odds over whether TV shows and movies being made by WME's Endeavor Content should be grandfathered into a new deal.

According to today's motion, WME has agreed to accept the same terms as its rivals including UTA and ICM, who earlier this year became franchised again after bowing to a 20 percent cap on ownership in any affiliated production company. WME says it agreed to phase out packaging (an alternative to commissions where the agency gets fees for lining up talent in a project) and would agree to having only minority interest in Endeavor Content, but it wasn't quite enough. WME says that on Oct. 16, the union responded with demands for additional concessions such as third-party oversight over a restructuring, leaving it "stunned."

The WGA, according to the court papers, told WME that "it will not be franchised unless its parent company, Endeavor, first comes into compliance with the Guilds’ 20% cap on its ownership in Endeavor Content (which cannot happen in the blink of an eye), and unless Endeavor Content abandons in-progress projects (notwithstanding commitments to those involved—writers included). The Guilds further demanded that WME’s third-party investors (no matter how small their ownership interests) also agree to the Guilds’ restrictions on investing in content companies even when totally unrelated to WME, and that WME submit to unspecified 'monitoring' and 'sanctions.'”

WME, represented by attorney Jeffrey Kessler, asserts this reveals the WGA's bad faith aims to "conquer," and that its "illegitimate objectives and tactics" shouldn't be shielded from antitrust scrutiny under labor exemptions traditionally afforded to the collective actions of unions. As CAA does in its own motion, WME accuses the WGA of maintaining an illegal boycott through the participation of nonmembers such as talent managers as well as those writers who are producers as well.

U.S. District Court Judge André Birotte Jr. will soon have to analyze which side is likely to prevail on the merits and whether the talent agency can demonstrate the sort of harm that requires immediate judicial intervention.

"The nature of the harm to WME epitomizes irreparable injury—severed relationships with thousands of writers and hundreds of showrunners who may never return," states the motion. "Furthermore, WME has begun losing agents who see the writing on the wall that the Guilds never intend to franchise WME. The Guilds have inflicted a Hobson’s Choice on WME: choose between punitive and discriminatory franchise terms that it cannot satisfy or suffer continued irreparable harm at the hands of the Guilds’ boycott."

WME says it has been fired by more than a thousand writers and showrunners. Defecting clients include Brett Johnson (Ray Donovan), Colleen McGuinness (30 Rock), Harris Danow (Little Fires Everywhere) and Sarah Tapscott (New Girl). The talent agency also blames the boycott for being unable to pitch writers seeking new representation including Robert and Michelle King (The Good Fight) and Damon Lindelof (Watchmen). WME has also lost agents including former partners Theresa Kang-Lowe, David Stone and Rich Cook.

As for the much ballyhooed IPO that was postponed and potentially scuttled amid the fighting, WME accuses the Writers Guild of having "anointed itself a private attorney general to police public financial markets, issuing public statements that Endeavor is a 'risky investment.'”

WME brings up the WGA's social media campaign a day before Endeavor's planned IPO and adds the gambit "is neither a legitimate union purpose nor a traditional or necessary union tactic.

“A union campaign to eradicate harmful conflicts of interest is one thing; a campaign to eradicate an agency’s writer representation business is quite another,” said Kessler upon filing today's motion. “WME’s ultimate goal, from the beginning, has always been to act in good faith to reach an agreement with the Guilds that is in the best interests of writers and the entertainment community as a whole.”

Today's court papers reflect a tense standoff that's only become more heated in the past 18 months. In fact, a notable declaration from WME partner Richard Rosen includes the allegation of a death threat on the part of David Young, executive director of the WGA.

"After Mr. Young repeatedly threatened to 'kill' me during a phone call on August 11, 2020, I called WGAW’s David Goodman, with whom I have a good professional relationship," states Rosen. "I informed [WGA president David] Goodman of Mr. Young’s threats to me. Mr. Goodman responded 'Oh God,' which I interpreted to mean 'that’s terrible' but 'it’s unsurprising.' This to me underscores that such behavior by Mr. Young is both expected and condoned by the Guilds."

Young and Goodman both deny Rosen's claims.

"For the past few months, the Guild has been engaged in an ongoing and sometimes productive negotiation with WME in order to resolve their various conflicts and to provide them a path forward to signing the UTA/ICM Franchise Agreement," responds Goodman in a statement. "Four weeks ago, WME asked for contract language from us and, in return, the Guild repeated its prior request for additional information on their corporate structure in order to provide them with such language.  They have been silent since. Today, WME joined CAA in seeking to end the agency campaign, not by picking up negotiations where they left off a month ago – not by looking to resolve their own conflicted practices – but, instead, by once again asking the courts to deny the Guild’s basic right to represent its members in collective action."

Goodman continues, "That is not a way forward. As we said to CAA yesterday, the Guild and its members will not be bullied into giving up our right to fair and non-conflicted representation. If WME honestly believes that the way to win writers’ hearts is to threaten us with undermining the Guild itself, they do not know writers – twenty months in and they still do not know writers. Like every other agency before them, WME (and CAA) will have the opportunity to get writers back when they return to the table – when they stop attacking us and take seriously the work of reforming their own deep-seated conflicts. Meritless court actions will not save them from that."