UPDATE, 2:45 PM PT: Updated to include response from WGA West
William Morris Endeavor has joined Creative Artists Agency in seeking a court injunction against the Writers Guild of America, asking a federal judge to force the WGA to end their 19-month-long boycott over packaging fees and affiliate production outlets.
In April 2019, WGA was granted approval by their members to issue an order to terminate representation with all agencies that accepted packaging fees, or payments sent by a studio to agents in exchange for packaging talent on a project. The guild called the fees a conflict of interest and also criticized WME and CAA’s ownership of affiliate production outlets like Wiip.
While CAA, WME and WGA are still locked in a legal conflict, the guild has signed franchise agreements with every other Hollywood agency — including major agencies UTA and ICM Partners — that will phase out packaging fees by summer 2022, limit agency ownership of production outlets to 20% and allow writers to be represented by those agencies again.
But the two major agencies that have filed injunctions this week with District Judge Andre Birotte say that WGA is no longer negotiating in good faith and are harming their business interests by holding out on signing a franchise agreement while they lose clients to UTA and other agencies that have already signed.
“The Guilds’ recent conduct erases any plausible deniability that what motivates their group boycott is an illegitimate and illegal effort 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,” read a statement from Winston & Strawn partner Jeffrey Kessler, who serves as lead outside counsel to WME.
“The truth of the matter is that WME has made all substantial concessions requested of it, with minor transitional exceptions that are logically consistent with exceptions made to other agencies. These latest actions underscore the unfortunate reality that the Guilds have no intention to franchise WME, constantly shifting the goal posts as a delay tactic.”
In the statement announcing the injunction, WME says that after ICM Partners and UTA signed their franchise agreements, WGA publicly stated on September 1 that WME would be able to sign an agreement with the guild on the same terms as those two agencies. The agency says that it has provided a timeframe for complying with the 20% affiliate production ownership limit, but also asked the guild to grandfather in existing projects belonging to their affiliate studio, Endeavor Content to avoid endangering those projects in a potential sale to other studios.
In response to this, WME says that the guild sent further requests for documentation but not any arrangements for a final agreement. On Tuesday, in a memo to members responding to CAA’s injunction, the WGA says it sent a proposal to WME on Oct. 16 but have not received a counter. WME says that proposal was “a list of additional, onerous and unreasonable demands that went far beyond what was asked of any other agency,” including sanctions and monitoring of WME.
WME also attached emails from clients informing their agents that they were terminating their representation to comply with WGA’s order but did not personally wish to do so. Kessler says that the emails from the writers and the recent exchanges between the two sides are proof that the guild’s “objective is to harm WME–not merely to help its writer members.”
In response to the injunction, WGA West President David A. Goodman said that the WGA had requested information in October on WME’s corporate structure in order to provide proper contract language for its latest proposal. Goodman also reiterated its condemnation of CAA and WME’s efforts to request an injunction.
“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,” Goodman said.
“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.”
Pamela Chelin contributed to this report.