Guild says agents can’t be loyal to both writers and Wall Street
The Writers Guild of America said on Friday that WME parent company Endeavor’s plans to go public in 2019 could create new conflicts that threatens agents’ allegiance to writers.
According to a report from The Wall Street Journal on Friday, Endeavor is ramping up plans for a 2019 initial public offering. The plans come as Hollywood’s top talent agencies battle with writers over representation and the practice of packaging fees.
The WGA, which is demanding agencies end the practice of collecting a fee when bundling talent it represents and bringing them to a studio for film or TV, said in a statement on Friday that Endeavor’s planned IPO reaffirms the group’s demands to end what it says are illegal practices.
“Today’s announcement that Endeavor plans to become a publicly-traded company only strengthens the call for the conflicted and illegal practices of the major talent agencies to end,” the WGA said in a statement. “It is impossible to reconcile the fundamental purpose of an agency–to serve the best interests of its clients–with the business of maximizing returns for Wall Street. Writers will not be leveraged by their own representatives into assets for investors.”
HAHAHA oh man, great timing on this one, guys. Right when we're talking about things like fiduciary duty and conflicts of interest.https://t.co/W3ZjgyMzzZ
— Eric Heisserer (@HIGHzurrer) March 29, 2019
The WGA is expected to vote on a new code of conduct over the weekend that would call on agencies to remove packaging fees from any deals involving guild members, replacing those fees with a 10 percent commission system instead.
If the vote is approved, the code will be enforced on April 7, with the WGA calling on its members to leave any agency that refuses to comply with the new code.
According to the Journal report, Endeavor was valued at around $4 billion in March 2018 when it raised $400 million from Saudi Arabia’s Public Investment Fund, using data from PitchBook. (The company subsequently returned that investment.)
As of late, the company’s strategy has been to broaden its business beyond film and TV representation, looking elsewhere for revenue.
The WGA has argued in the past that private equity investments from outside of Hollywood have shifted the major agencies’ top priority away from client representation and toward expanding into content creation and ownership.
The guild and the Association of Talent Agents have been going back and forth for months over the issue, drawing out negotiations for a new agreement that might satisfy both sides.
But a settlement seems far off with a little more than a week until the current agreement between the Writers Guild and the ATA expires. A pair of meetings between the WGA and ATA last week brought little progress on the key dispute over packaging fees, with the WGA and ATA member United Talent Agency releasing dueling reports on the impact that packaging fees have on writer pay.