Under the Shadow of Writer’s Armageddon, WGA and ATA Negotiations Grind Onward, then Falter
As of April 11, 2019, the Association of Talent Agents (“ATA”) has submitted to the Writers Guild of America (“WGA”) a formal proposal, offering to share with union writers a portion of earnings that talent agencies would otherwise earn from package deals between writers, agencies and studios.1 While the proposal was at one time unthinkable to both sides of the negotiation, the threat of the deadline – now breached – will send shockwaves through the entertainment industry, forcing both the ATA and the WGA into a series of unlikely compromises.2 Now that the deadline has passed, and Hollywood writers have begun firing their agents en masse, making the future of the writer/agent relationship murky and grim.3
What Is Packaging?
“Packaging” is an economic model which has long existed in the world of representing Hollywood television writers.4 Packaging refers to the process where a talent agency bundles together represented clients to bring a project together for a studio.5 This packaging of talent, from writers to directors to producers, all represented by the same agency, produces fees which go directly from the studio to the agency.6 Accordingly, these “packaging fees” represent a form of income for the agent that is not tied to the income of the represented writer.7
A Problem with Packaging?
While packaging is now an extremely common practice in Hollywood agenting8, it also sits in contrast with the traditional agent income model. Under this model, an agency receives a commission based on the salary a studio pays to an artist. As such, an agency’s profit is intertwined with the success of the represented talent.9 For this reason, members of the WGA support that traditional model. One member of the WGA, influential writer/director David Simon, recently espoused: “If [an agent] can only leverage profit for [him or herself], but not for me, what the fuck do I need [an agent] for? Why are [they] on this ride at all?”10
The Deadline for Negotiations
In April of 2018, the WGA gave the ATA 12 months’ notice for terminating its Artists’ Manager Basic Agreement11, and that deadline officially passed on Sunday, April 11, 2019.12 The deadline passed without a new Code of Conduct for agents was due primarily to ATA only offering 1% of packaging profits to clients, an offer many in the WGA thought seemed unrealistically low based on their previous demands.13
The Future of the Writer/Agent Relationship
While it may be a temporary and symbolic gesture that could be reversed in the event of an eventual agreement between the ATA and the WGA, the mass firings of agents by their writer clients will cast a long shadow on the entertainment industry for the foreseeable future. In the absence of many of these representational relationships, it is possible that Hollywood studios will construct new administrative infrastructures to find writing talent outside of the traditional agency referral channels. This may include many more instances of writers being represented by entertainment law firms, or possibly of writers, themselves, negotiating directly with studios and media buyers.
Ross A. Lincoln, Talent Agents Offer to Share Packaging Fees with Writers, THE WRAP (Apr. 11, 2019), https://www.thewrap.com/members/2019/04/11/talent-agents-offer-to-share-packaging-fees-with-writers/. [https://perma.cc/HX6N-85XD]↩
Dave McNary, Writers Guild, Hollywood Agents Negotiate with Deadline Looming, VARIETY (Mar. 21, 2019, 6:47 PM), https://variety.com/2019/film/news/writers-guild-hollywood-agents-negotiations-1203169747/. [https://perma.cc/9X9M-HHVP]↩
Dan Reilly, Hollywood Writers Fire Agents in Show of Solidarity Over Financial Disputes, FORTUNE (Apr. 15, 2019), http://www.fortune.com/2019/04/15/hollywood-writers-fire-agents/. [https://perma.cc/CJN3-KU9U]↩
Jordan Crucchiola, The WGA’s Huge Fight with Hollywood Agents, Explained, VULTURE (Apr. 18, 2019), https://www.vulture.com/article/wga-hollywood-agents-packaging-explained.html. ↩
“87 percent of all shows that aired during the 2016–17 season were packaged.” Id.↩
Reilly, supra note 3.↩