6 Things You Need to Know About the Impasse Between Hollywood Writers and Agencies

WGA will vote March 25 on new rules for agents

Last Updated: February 28, 2019 @ 12:29 PM

On April 6, the contract between the Writers Guild of America and the Association of Talent Agents is set to expire. Negotiations between the two groups, ongoing since last year, have stalled, and it looks increasingly possible that no new deal will be reached.

There are several points of contention between the WGA and ATA, but the main dispute is over the business practice known as packaging. It’s a major source of income for talent agencies, one the WGA wants to end for good.

WGA has scheduled a March 25 vote for members to decide whether to impose tough new rules on agents which could do just that. The proposed rules are strongly opposed by ATA, which is urging WGA members to vote them down.

Here’s where the different sides stand, and what you need to know about where Hollywood’s latest labor dispute may be headed.

Packaging

Packaging — when an agency starts a film or TV project by bundling talent it represents and bringing them to a studio as, you guessed it, a package — has become a major source of income for top Hollywood agencies. The agency who puts the package together receives fees directly from the studio in lieu of commissions from actors, directors, showrunners and yes, writers, often for the life of the project.

WGA West President David A. Goodman argued in speech to members in late February that the practice creates a “conflict of interest.” With money guaranteed from studios, Goodman says, the agency is more invested in the success of a project than in the success of a client, which reduces the incentive for agents to negotiate better wages for writers.

“There are more writers at WGA scale, more writers whose quotes have atrophied or dropped, more writers trying to make their year on a short-order episodic series, and more screenwriters required to do outrageous amounts of free work than ever before,” Goodman said.

What’s more, according to Goodman, a recent survey of WGA members found that 75 percent of writers didn’t get their latest job through an agent, a problem he attributes to packaging.

But in a rebuttal posted on the ATA’s website, the association says: “An agent’s success is directly tied to the success of the artists he/she represents – agents only earn more when their clients make more.”

The ATA also atrributes decreases in pay “primarily to shorter orders, longer spans, and other industry trends–issues the agencies and the WGA should be working together to address–not any actions by the agencies,” and argues that agents’ interests are in sync with their clients in package deals because “a failed show makes no money for the agency – it’s a loss.”

The organization also asserts that there is no difference in compensation for writers between package and non-package deals.

WGA Wants a New “Code of Conduct”

Goodman says the guild is preparing to make what he calls a “necessary power grab”: a “code of conduct” for agents that, if approved in the March 25 vote, would go into effect the day after the current WGA-ATA contract expires.

The plan demands that any agency doing business with WGA members ditches packaging and returns to the traditional 10 percent commission model. It also demands that agencies provide the WGA “with all deal memos, all invoices for payment, and open access to the agencies’ books.”

Goodman asserts that the guild “has the legal right to act unilaterally” if no new agreement is reached. ATA rejected that assertion in a statement responding to Goodman’s speech, accusing WGA of “sorely misleading writers in telling them that the Guild has unfettered legal authority to unilaterally impose such restrictions.”

WGA Says Code of Conduct is Not a New Thing

Goodman says that there’s a precedent for this kind of policy in the world of sports.

“All of the major sports unions have similar Codes of Conduct–basketball, baseball, hockey and football,” Goodman argues. “At CAA, which has the biggest sports agency business, all the sports agents must be signed to the Codes of Conduct. We’re not reinventing the wheel here.”

However, ATA says that “the proposed code can be unilaterally changed by the WGA every 60 days,” which it arguess could be easily abused, and calls the code “a sweeping attempt by the WGA to remake the entire industry, restraining not only the business of agencies and their affiliates but also interfering with the livelihoods and businesses of producers, actors, directors, and studios.”

ATA Warns of Damage to the Whole Industry

The ATA is opposed to any agreement that would force the end of packaging fees, and says that no member of the Association will sign on to the proposed code. In their statement countering Goodman’s speech, the organizaiton also argues that a packaging fee-free system proposed by WGA would be bad for the industry, harming “not only their own members but others throughout the entire industry.”

ATA says the code would affect film financing, both at major studios and in the indies, because they would have to build entire wings to deal with financing and packaging instead of paying a fee to have the agencies do it. ATA also argues that the new rules would make financing and selling harder for independent producers.

Goodman says the guild has spoken with nine independent producers about whether getting rid of packaging fees would damage how they do business, and says that the “overwhelming answer was that agency packaging and producing hurt their business and they’d love to see us stop it.”

In response, ATA says that its practices “help clients’ shows and films get made,” and that “agencies have helped secure financing or distribution for more than 1,000 independent films over the past five years, creating great opportunity for writers and all artists represented at all size agencies.”

TheWrap reached out to SAG-AFTRA and the Directors Guild of America to ask if they are monitoring the WGA-ATA dispute and whether they have contacted the WGA about how enforcing the Code of Conduct would affect their respective members. Representatives from both guilds did not immediately respond to requests for comment.

What’s next?

The next meeting has not been set, but WGA is pushing for another round of negotiations this week. And in a statement provided to TheWrap, Karen Stuart, ATA’s Executive Director said: “We firmly believe there are ways to collaborate together with the WGA in a way that benefits all writers and are ready, willing and waiting for the WGA leadership to commit to good faith negotiations and constructive conversations about all of their proposals.”

If no new agreement is reached, and the code is approved in the March 25 vote, Goodman is calling on all WGA members to leave agencies that refuse to comply. “A membership vote to implement a Code is a vote for all of us to walk away–together–from any agency that will not sign it,” Goodman said.

Will the Writers Actually Buy Into WGA’s Plans?

Goodman acknowledges that asking writers to leave agents isn’t a simple request, especially for those who are on good personal and professional terms with their agents. “There may well be a struggle required and hardship for some of us,” he told members. Goodman insists this is the only way for writers to get paid what they deserve.

One writer who spoke with TheWrap on condition of anonymity said there’s skepticism about whether the code would actually lead to more money in the pockets of all writers, especially after the commission cut that agents will have to take.

“I’m not leaving my agent. I don’t know anyone who is,” the writer said. “The thing is, so few writers ever find themselves in a position where any of this s— matters. You have to create a show that goes the distance for any of it to really matter. And very few of us ever do that.”

Trey Williams and Umberto Gonzalez contributed to this story.

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