Advertisement
Company Town

Writers Guild sends cease and desist letter to Hollywood talent agencies

LOS ANGELES, CA - MARCH 28, 2019 Building at 7000 West 3rd Street in the Fairfax area of Los Angel
The Writers Guild of America is suing four of Hollywood’s biggest talent agencies over the legality of packaging fees. Two of those agencies are suing the guild, accusing it of antitrust behavior.
(Al Seib / Los Angeles Times)

After being slapped this week with lawsuits from two of Hollywood’s biggest talent agencies, the Writers Guild of America fired back on Friday, sending a cease and desist letter in which the guild accuses agencies of engaging in anti-competitive behavior.

Attorneys for the guild are accusing members of the Assn. of Talent Agents of price fixing and collusive action when it comes to the hotly contested issue of packaging fees.

“The agencies’ collusive agreements have caused tremendous financial harm to the guild’s members by artificially depressing the compensation paid to writers,” the letter said.

The guild also alleges that agencies have refused to negotiate with it, except through the association.

Advertisement

The guild has already sued four of Hollywood’s biggest agencies over the legality of packaging fees. The suit, filed in April, is making its way through Los Angeles Superior Court.

“We remain available to bargain reasonable, fair terms,” the guild said Friday in a separate letter to 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.”

Talks between the two sides broke down last week when the guild refused the agencies’ latest offer to increase profit-sharing for junior TV writers. The guild said it would cease negotiating with the Assn. of Talent Agents and reach out to individual agencies.

Since then, WME and UTA have sued the guild, claiming that it has violated antitrust laws by organizing its members in a group boycott. In April, the guild instructed its thousands of members to fire their agents after the first round of negotiations failed to produce any results.

Advertisement

“We continue to stand ready to negotiate with any agency,” the guild said in its letter to members on Friday.

The Assn. of Talent Agents didn’t immediately provide a comment.

The trade organization has served as the chief negotiator on behalf of its member agencies. But relations between it and the guild have soured, with the organization accusing the guild of bad faith negotiations.

The guild’s cease and desist letter alleges that agencies have engaged in price fixing through the commonly used “3-3-10” formula for packaging fees. The formula provides baseline percentages for the fees that an agency receives through the life of a TV show, including back-end profit participation.

Guild attorneys also claim that that agencies are colluding by refusing to sign the guild’s “code of conduct” — a list of provisions that would prohibit certain agency practices, including charging packaging fees.

In the letter, the guild is asking the association to preserve internal documents and records that could be relevant to the dispute.

The requested documents include data pertaining to packaging fee revenue as well as communication between the ATA and its member agencies.

david.ng@latimes.com

Advertisement

@DavidNgLAT


Newsletter
Get our daily Entertainment newsletter
Advertisement