WGA Sues Hollywood’s Top 4 Talent Agencies Over Packaging Fees

Guild brings a lawsuit against CAA, WME, UTA and ICM Partners

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The Writers Guild of America on Wednesday filed a civil lawsuit against Hollywood’s top four talent agencies, escalating its dispute over packaging fees.

At a press conference on Wednesday, the guild said it was filing a lawsuit that alleges that packaging fees — collected when bundling talent and bringing them as a package to a studio or network for film or TV projects — are illegal under California and federal law.

The lawsuit claims that packaging fees violate California fiduciary law by “severing the relationship between writers’ compensation and what the agency receives in fees.”

Lawyers for the WGA also argued during the press conference on Wednesday that packaging fees violate the Taft-Hartley Act, which says that  any representative of an employee cannot receive money from the employer.

“All of the writer plaintiffs have been hurt financially by packaging deals. They are creators and writers of television shows that have shaped a generation, yet their agents have profited at the expense of their own clients,” WGAW general counsel Tony Segall said in a statement. “The plaintiffs will seek a judicial declaration that packaging fees are unlawful and an injunction prohibiting talent agencies from entering into future packaging deals. The suit will also seek damages and repayment of illegal profits on behalf of writers who have been harmed by these unlawful practices in the past.”

In a statement, Association of Talent Agents Executive Director Karen Stuart warned that the guild was sending the entertainment industry on a “predetermined path to chaos” and declared it was proof that the guild never had “any intention to negotiate.”

“This development is ironic given that the guild itself has agreed to the legitimacy of packaging for more than 43 years,” Stuart said. “Even more ironic is the fact that the statute the WGA is suing under prevents abuses of power and authority by labor union leaders, even as the guild has intimidated its own members and repeatedly misled them about their lack of good faith in the negotiating room.”

In a counter-statement, the WGA said: “If the major agencies would abide by existing law – antitrust and racketeering law – this deal would have been done 11 months ago. The ATA’s repeated use of anti-union rhetoric illustrates how much in denial the big agencies are.”

In addition to the guild, the lawsuit named eight writers as plaintiffs, including “The Wire” creator David Simon, “Madam Secretary” creator Barbara Hall and “Cold Case” creator Meredith Stiehm, who also serves as the co-chair of the negotiating committee for the WGAW and sits on the guild’s board.

Patti Carr (“Reign”), Ashley Gable (“The Mentalist”), Deric Hughes (“Arrow”), Chip Johannessen (“Homeland”), Deirdre Mangan (“iZombie”) and also named as plaintiffs.

Stiehm said that her agency, CAA, negotiated a packaging fee on the long-running CBS police procedural “Cold Case” without her knowledge, and that she didn’t become aware of the fee until the show was in its seventh season, when the network asked her to reduce the show’s budget.

“For every dollar that I made, (CAA) made 94 cents. They should make 10 percent,” Stiehm said, citing the traditional fee that agencies collect from clients. “If an agency is taking $75,000 out of the budget every episode, that is money that can be spent on actors or sets or music. We had to take out music, we had to cut down to 17 episodes and we couldn’t shoot in Philadelphia. Season 7 was less of a season than it could have been.”

Since a 43-year-old agreement between the WGA and the Association of Talent Agents expired last Friday, the guild said “thousands” of its writer members have severed their relationship with their agencies.

The lawsuit comes as thousands of prominent film and TV writers have fired their agents and committed their support for the WGA and the new code of conduct that members approved by an overwhelming majority. The code explicitly forbids agents representing its writer members to collect packaging fees — a condition that none of the major talent agencies so far has agreed to honor.

According to the WGA, the four major agencies receive more than 80% of the packaging fees paid by Hollywood studios and networks.

“Packaging fees are not a new practice in Hollywood, but they have always been controversial,” Segall said. “It is time to put an end to the egregious conflict of interest that they pose.”

Pamela Chelin contributed to this report.