The Hollywood Writer-Agent Battle Continues With Lawsuits and a New…

It’s been over two months since more than 7,000 members of the Writers Guild of America fired their agents en masse, due to a dispute mainly centered on packaging fees, a contractual setup that writers said favored the agents financially, and agencies having their own production arms. The fight has only gotten more complicated since then with a breakdown in negotiations, lawsuits, defections, the involvement of the SEC, and thousands of people in Hollywood trying to go about their business in this strange working environment.

Here’s a refresher of how things got to where they are, what’s happened since the writer-agent separation, and why there’s hope this will be resolved, to some extent, soon.

The Recap

On Saturday, April 13, members of the Writers Guild of America West fired their agents following a breakdown in negotiations over a new Code of Conduct between the WGA and the Association of Talent Agents. As mentioned above, the crux of the schism between writers and their agents was over packaging fees and agency production houses.

Packaging fees come about when an agent delivers a “package” of a combination of talent for a television show—writers, actors, showrunners, directors, etc.—and, instead of taking their usual 10% commission, get paid a percentage on the show for as long as it runs. This can add up to millions of dollars, and those agents get that money regardless of whether or not their client is still involved with it at any point after the deal is made. The writers argued that agents were often pursuing these deals instead of better pay for their clients, while the agents said it was good for everyone involved.

The other big issue was over three of the biggest agencies, WME, CAA, and UTA, having their own production studios. The writers said that deals with them were inherently conflicts of interest for an agent: basically, how can they trust an agent to negotiate a better salary for the writer when who’s paying it is the agent’s business?

The WGA demanded that agencies eliminate packaging deals for good and separate themselves from the production entities. The ATA instead offered to give up 1% of packaging fees and increase transparency in the business dealings of the production studios. No deal was made by the deadline, hence the large firing.

The Immediate Aftermath

The writers, who had voted overwhelmingly to take this course of action, went through with the firings, with many posting their form letters on social media and sharing their thoughts on the whole mess. The majority of those had mixed feelings, saying they loved their agents but knew that it was the right move for them. Some, particularly women and minority writers, worried that losing their agent would make it even harder to get a new job.

Others publicly spoke out against the WGA. SEAL Team showrunner John Glenn bashed the guild for its “somewhat McCarthy-like tone” and Jon Robin Baitz, best known for ABC’s Brothers and Sisters, openly refused to fire his agents at CAA, whose production arm is overseeing his upcoming Amazon show Charlotte Likes to Win. Others groused anonymously, with some of them banding together as the WGA “resistance” to publish a video highlighting how, in their view, the guild “fucked this whole agent thing up enormously.” A group of around 500 WGA members, calling themselves Writers for Negotiation, even set up a private forum on the video game chat app Discord to discuss their issues with the guild’s handling of the situation.

More officially, the WGA filed a lawsuit against the big four agencies, WME, CAA, UTA, and ICM, which collect over 80% of Hollywood’s packaging fees. The suit, which included several writers as plaintiffs, asked that a judge deem packaging unlawful and to order the agencies pay restitution to the members it allegedly bilked. The biggest movement in the case so far is that CAA filed a motion to remove the WGA as a plaintiff in the suit, saying that the guild has no standing to be part of this, unlike the group of writers, including The Wire’s David Simon, who are suing. A hearing on that is set for September.

The Effect on Business for Both Sides

In preparation for a world without agents, the WGA set up a submission system where members could deliver spec scripts and showrunners and other industry decision-makers could peruse them. Some writers established networking events for scribes looking to meet showrunners. Prior to the firings, LaToya Morgan, the executive producer of AMC’s Into the Badlands and Turn, started the hashtag #WGAStaffingBoost, where writers could pitch themselves via social media. In May, Deadline reported that the hashtag had its first hiring, with Cynthia Adarkwa joining the CW’s Legacies.

Grey’s Anatomy showrunner Krista Vernoff told The New Yorker that she hired 13 writers for two of her other shows, with just one of them getting the gig through an agency that had agreed to the WGA’s terms. “Several came to me through self-advocacy, direct submission, and Twitter boosts,” she said. “Half are women, half are men. Half are people of color. It’s the most diverse, inclusive group I’ve ever hired. It took extra effort for sure, but it was actually fun.”

At the end of June, The Good Fight creators Michelle and Robert King said they had staffed the writing rooms of two shows, presumably that program and CBS’s upcoming Evil, without the use of agents. “It’s not like TV is going to stop making shows because there’s no agents,” Robert King said during an appearance on the WGA East podcast OnWriting. “I think we’ve survived it very well. We have two very good writers rooms and it was all done without the influence of agents.”

On the other side of the battle, the agency Verve agreed to a deal with the WGA, entering into its own, slightly modified version of the proposed Code of Conduct that lasts for three years. The 2010-founded company is not a member of the ATA, which blasted the move. “It is disappointing but not surprising that some of the most vulnerable agencies may reluctantly be forced to sign an onerous agreement,” it said in a statement. “Their decision to sign the WGA’s Code will ultimately harm their business and the artists they represent on many levels.”

New Lawsuits and Future Negotiations

In a sign of deteriorating relations, the WGA called off its negotiations with the ATA on June 20, saying it instead would pursue individual talks with the nine largest agencies. All nine refused.

Things got worse on June 24, when WME filed an antitrust lawsuit against the WGA, saying it was taking part in an unlawful boycott of their business and the other agencies that did not agree to the code.

“To effectuate its boycott,” WME’s attorneys wrote, “WGA leaders have coerced their member-writers and showrunners into agreeing to refuse to deal with WME and other talent agencies who will not agree to stop packaging or affiliating with content companies by threatening these individuals with expulsion and other union discipline that would imperil their ability to work, and threatening their healthcare without a legitimate basis to do so.” UTA filed its own antitrust lawsuit on June 27, calling the WGA’s move a “power grab,” with CAA following in their footsteps and suing on Monday, July 1, claiming “the union is attempting to restrain competition on a staggering scale using illegal means.”

Also on June 24, the WGA notified the Securities and Exchange Commission that WME’s parent company Endeavor, which filed an IPO in May, had misrepresented the strength of its business by claiming it has more clients than it actually does following the mass firing.

“Endeavor claims to represent over 6,000 clients including the ‘world’s most dynamic and engaging storytellers,’” the WGA wrote. “But as a result of Endeavor’s conflicted business practices, 1,400 writers have informed the agency that it no longer represents them, a fact that Endeavor fails adequately to disclose to potential investors. Endeavor’s reliance on clients and failure to address these conflicted practices make this offering a risky investment.” Endeavor, meanwhile, countered the claim, saying WME has more than that number of clients even without the writers, saying, “Once again, in an attempt to disrupt our business, WGA leadership is misrepresenting the facts.”

But there’s a ray of hope. On June 27, the WGA made a new offer to the ATA, saying that business in Hollywood, with all the packaging fees, could continue as usual for one more year. The guild’s hope is that the extension will give both sides enough time to reach an agreement to switch to a model that’s solely based around the traditional 10% commission.

“We are making this offer despite the fact that every one of the eight member agencies of the ATA ‘bargaining’ committee has rejected the offer we made last week to meet individually and discuss this new proposal,” the WGA said in a statement. The ATA and the individual companies involved have yet to publicly respond.

However, the WGA didn’t let any goodwill or optimism of this offer last very long. The following day, it sent a cease-and-desist letter to the agencies, accusing them of antitrust violations, including price-fixing, collusion, and an unlawful refusal to deal. “We remain available to bargain reasonable, fair terms,” the guild told its members. “But we’re not going to sit back and allow agencies to accuse us in a court of law of the very things they are doing. Packaging fees are illegal, and in practice also an illegal form of price fixing. Any competent observer can corroborate these facts.”

The guild gave the ATA until July 15 to comply with its demands. Should that fail to happen, which seems inevitable, this puts the writers and the agents on the path to having these issues heard in federal court.