Representatives for Hollywood’s leading writers and agents met in Los Angeles on Thursday, hoping to avert an implosion in the creative industry as the clock ticks toward a deadline for a deal. But the prospects for resolution remain far off.
The two sides are deadlocked over the so-called franchise agreement, which governs how agents and writers share revenue.
The Writers Guild of America laid out a counterproposal to the offer that agents, represented by the Association of Talent Agents, suggested on Tuesday. If the two sides are unable to come to an agreement by April 6, when the current pact expires, the nearly 20,000 writers responsible for the country’s biggest shows and movies could fire their agents en masse, throwing the entertainment industry into chaos.
This week marked the parties’ first substantive talks since rhetoric began heating up in recent months. But many industry insiders believe the chances for a new deal remain low.
“I think this is headed to court; I think a lot of this is for show,” said a legal authority on the matter who spoke on the condition of anonymity because they did not want to appear to be taking sides. “The WGA appears to be preparing for a major battle.”
The writers say they do not wish to renew the franchise agreement without significant revisions. They want new units that the agencies created to function as production companies to instead be formally carved out as separate entities. At present those units exist more as extensions of the agencies, which the writers say ups the possibility for conflicts of interest.
The also want to overhaul the main ways agents collect money on writers’ work. At the moment those revenue are dominated not by standard commissions from clients but by so-called packaging fees, in which studios pay the agents for putting together the creative elements of a show. Those fees, the writers say, encourage agents to act against their own clients’ interests and also allow them to dip into a pool of revenue that should go to creators.
The agencies, particularly the so-called Big Four — CAA, WME, UTA and ICM — that are leading the fight, say that the writers are working under false assumptions. Packaging fees and new entities offer riches to both parties, they say, especially as the media companies with which they are negotiating are growing larger and more vertical.
On Tuesday, the ATA, led by president Jim Gosnell, laid out the group’s proposal. The agents suggested a process by which individual clients can opt out of packaging agreements if they choose, offering what it said was full transparency between agents and clients in the packaging process.
The WGA on Thursday essentially rejected the idea, saying that a more systemic shift was needed.
“I need to be very honest about where we stand today. While we appreciate the tenor of Jim Gosnell’s remarks on Tuesday, we disagree with most of your proposed solutions,” WGA West president David Goodman said in a statement at the meeting. “The negotiation, if it is going to succeed, cannot just be platitudes about empowering individual client choice. 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.”
Of the production entities, Goodman said that “the extreme conflict of interest that is embodied by agencies as producers cannot be dealt with by changing email addresses or calling entities controlled by the agency heads’ ‘affiliates.’”
In the wake of Goodman’s remarks, ATA executive director Karen Stuart released a statement disputing the WGA’s characterizations. “Unfortunately, it appears at this time that the WGA really doesn’t want to make a deal. While we appreciate their overtures in tone, they didn’t present any meaningful counter-proposals today,” she said. “The Guild’s proposals will only weaken our collective ability to continue advancing artists careers and confront the power imbalance created by the dramatic changes in the media landscape.”
The talks come after the WGA released a white paper this week that called the major agencies a “cartel” that uses its “control of talent primarily to enrich themselves.”
“[T]he major agencies’ business model is based on conflicts of interest that harm their clients and violate the law,” the paper said. “By maximizing their own profits and now the profits of their outside investors, these agencies have strayed from their core purpose of representing the interests of their clients.”
A mass firing of agents would likely not trigger an immediate stoppage of new material on television and in movie theaters. In the short term, writers can be represented by lawyers, managers and, potentially, a handful of smaller agencies that could agree to abide by the WGA’s preferred codes.
But the longer-term implications are unclear. A protracted interruption in the way Hollywood does business could lead to projects stalling and consumers seeing fewer options in their viewing choices.
The sides are scheduled to meet again Monday.
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