WGA Moves Date for Membership Vote on Talent Agency Code of Conduct

Little progress in latest talks between Writers Guild and the ATA in packaging fees dispute

Last Updated: March 18, 2019 @ 6:41 PM

The Writers Guild of America has pushed back the date of the vote for members to decide whether to impose a proposed code of conduct on talent agents should the guild’s current deal with the Association of Talent Agencies expire on April 6.

Originally set for March 25, the vote, which will be conducted online, will now begin March 27 at 9:00 p.m. and end at 10:00 a.m. March 31.

The guild has also scheduled several member meetings to discuss the proposed code. In Los Angeles, meetings are set for March 26, 7:30 p.m. at the Beverly Hilton, March 27, 7:30 p.m. at the Sheraton Universal, and March 30, 10:30 a.m. at the Writers Guild Theater. In New York, a meeting is scheduled March 27, at 7:30 p.m. at the Tribeca Performing Arts Center.

The Code of Conduct, if approved, would be enforced on April 7, with WGA asking its members to leave any agency that doesn’t agree to remove packaging fees.

The rescheduling comes after another day of talks between WGA and ATA ended with little progress, as both sides are still digging their heels in when it comes to the key dispute preventing a new deal: packaging fees.

The proposed Code of Conduct would require agencies to remove all packaging fees on any deals involving WGA members, switching instead to agents receiving a 10 percent commission from their writer clients.

Individuals with knowledge of the talks told TheWrap that during the Monday meeting, which lasted less than two hours, the ATA presented a series of questions from writer clients to the WGA that were not answered. Among them was a question over whether writers who do not fire their agents over compliance with the new Code would face discipline from the guild.

With little progress made over packaging, the WGA says that it will consider the questions and points presented by the ATA on Monday and will respond when they meet again later this week, though the ATA says that another meeting has not been confirmed.

In a report released Monday morning, the ATA asserted that without packaging fees, writers would have had to pay $49 million more to agents during the 2017-18 TV season as part of the 10 percent commission model that would replace packaging fees as the agents’ main profit model. The report, which was conducted by LEK Consulting, also claims that the gains won by the WGA last year in the latest film and TV contract with AMPTP would have been erased if writers were to pay commissions.

When actors, directors and producers are added in, that total increases to $111 million, and the report notes that this figure assumes that all money saved by studios by not paying packaging fees is passed directly to talent and not diverted to other production costs like visual effects or on-location shooting.

But the WGA, in their own statement released Monday, attacked packaging fees as a “kickback scheme” that have allowed the four largest agencies in Hollywood — WME, CAA, UTA, and ICM Partners — to gain more profit and influence in the industry, as well as attract more private capital investments. They also argue that those investments in turn have led to WME and CAA to launch their own production studios, creating further conflicts of interest.

“When our agents are studios – when they employ us – their interests are in direct opposition to ours. These agency/studios generate wealth for their investors (and themselves) by maximizing profits and minimizing costs,” read the statement from WGA’s negotiating committee. “Our salaries are one of those costs. When costs and net profits trade off, net profits wins. When the interests of multibillion-dollar investors and individual writers are at odds, multibillion-dollar investors win.”

“The influx of outside capital into the agency business has completed the transformation of our agencies from businesses dedicated to maximizing our revenue to businesses dedicated to maximizing their own. It is a breach of their fiduciary duty to us and a violation of law.”

The guild and the agencies also face a huge divide over how the two sides view the counterproposals that the ATA presented at talks last week, which promised a new system of transparency that would require agents to completely disclose any relationships between their agency and a studio that it has ownership stake in. The proposal also requires agents to get their writers’ approval to be included in any packaging deals before the agents receives a fee.

The ATA has insisted that such a system would give writers more control over how their work is sold to studios, and said in opening statements on Monday that the WGA’s new Code of Conduct is a “unilateral mandate that assumes writers can’t make good decisions for themselves” and would “rob WGA members of choice and decision-making power.”

The WGA, meanwhile, says that the ATA’s counterproposals are aimed at reducing the guild’s negotiating power on behalf of writers, comparing them to “right to work” laws that undermine collective bargaining with the promise of greater individual autonomy.

“Choice is only a real choice if an individual writer has the power to exercise it in the face of a powerful company or agency. Very few do. All of your proposals ask individual writers to do things that have already proven mostly impossible, like having a real choice in agency packaging and producing deals,” WGA President David A. Goodman said in a statement last week.

During the Monday meeting, ATA Executive Director Karen Stuart urged the WGA to come to an agreement before the current agreement between the guild and agencies expires on April 6.

“We have three short weeks before a dark cloud of uncertainly will hang over Hollywood, and we can’t allow that to happen,” she said. “If we don’t start breaking this down and finding ways to bridge the divide, we will be putting our writers in an incredibly difficult position on April 6. That simply isn’t fair to your members and our clients, and no one wants that to happen.”

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