TV and movie writers have multiple representatives — agents, a union, attorneys and sometimes managers — who, in theory, should all be rowing in the same direction to maximize writers’ opportunities, income, stature and creative freedom. But right now, the talent agencies and the Writers Guild of America are at each other’s throats.
It couldn’t come at a worse moment. Not since the advent of television has the entertainment industry been more awash in change. Studios are merging, conglomerates are agglomerating, cord cutters are cutting, and moviegoers and TV viewers are migrating to streaming services. All this adds up to enormous opportunity for top writers, but lots of career volatility and even terror for many more. The 22-episode seasons that generated healthy writing fees and year-round employment are disappearing. So are the aftermarkets that used to yield hefty TV residuals. On the film side, consolidation, contraction and salary compression are the norm.
It’s exactly the time, one would think, when a union and agents should pull together on behalf of writers. Instead, after an inconclusive negotiation session Tuesday, they are weeks from a potential showdown that could spawn massive litigation and painful uncertainty for the entire entertainment industry.
If the guild and the agencies let loose their pinstriped dogs of war, they’ll likely destroy a great empire.
Ostensibly, the WGA and the agencies are fighting over two specific agency practices, but at base this is about power and money. The agencies — often understandably perceived as bullies — are outwardly mightier and certainly wealthier. And yet labor law, Supreme Court precedent and other federal cases give the guild some exclusive powers and the right to impose rules on agents. The WGA takes that to mean that “talent agencies can only represent writers with the consent of the Guild,” and that it can rewrite the rules of representation at will.
That’s just what the guild intends to do on April 7 with a new code of conduct that it plans to unilaterally impose on agencies the day after the existing, jointly negotiated agreement terminates. (Members will first have to OK the new code in a vote March 25.)
The new code will prohibit “package fees,” a longstanding practice in which a studio pays the agency fees throughout the life of a project, and agents in turn forgo their 10% commission from the writers, directors and actors. It also bans “affiliate production,” a more recent development in which agency affiliates — sister companies — finance, produce and own content, displacing the traditional studio altogether.
Television packaging means the individual artists don’t have to pay commissions. But the result is that agencies sometimes make more money on a project than their clients do, and the WGA says some agents have killed projects when the studio refused to pay a packaging fee. Moreover, without commissions, the agent has no direct incentive to maximize salaries, except preventing an unhappy client from walking out the door. Movie packaging is a bit different, but raises similar concerns.
As for affiliate production, these new entities are, so far, offering writers more lucrative deals than the studios do. (The WGA claims that won’t last.) Agencies also point out that no writer is forced into a deal with an affiliate.
Still, the WGA calls both practices a conflict of interest and says there’s no compromising on such matters of principle. But if that’s so, why is WGA East president Beau Willimon in business with one of the affiliate production companies? (His publicist wouldn’t comment.) And why does the new code say that it’s OK for an agent to represent multiple clients competing for the same job? That’s a conflict the WGA’s new rules permit, bowing to reality.
There are reasonable compromises to be had on packaging — writers and other talent could get a cut of those fees, for instance — and perhaps on affiliate production. There’s also a critical role for the guild to play in erecting guardrails to prevent abuses.
The WGA, however, wants an outright prohibition. It says the law is on its side, but that’s unclear. The role of agencies is recognized by state statutes and in federal case law. “We have taken too long to demand that these practices end,” says the union. But the WGA did sit on its hands for decades, raising legal questions; courts are often loath to upend customary industry practices. And the agencies can most likely outspend the WGA if any of this winds up in court.
If this dispute falls into litigation, Hollywood will be in chaos. How will writers find jobs? Will their salaries go up enough to offset the commissions they’ll have to pay? Will actors and directors have to pay commissions too? (Yes, and they’re not happy at the prospect.) Will writers have to leave their agents (or their union)? Would they later be welcomed back? (Some won’t be, threaten the agencies.) Will studios have to scramble to assemble teams of talent like agents do now?
Only a negotiated solution can avoid this mess and prevent permanent damage to the institutions that represent writers. If the guild and the agencies let loose their pinstriped dogs of war, they’ll likely destroy a great empire — and writers may realize too late that the empire that fell was their own.
Jonathan Handel is an entertainment/technology attorney at TroyGould and a contributing editor at the Hollywood Reporter.