Writers Guild Sues WME, CAA, UTA, ICM

– Writers Guild of America

The Writers Guild of America filed suit April 17 against four major talent agencies – WME, Creative Artists Agency, United Talent Agency and ICM Partners – claiming the widespread use of packaging fees in television and film has created numerous conflicts of interest and is unlawful.

The suit – filed in California State Court by The Writers Guild of America East, The Writers Guild of America West,  and a number of individuals – seeks to end the practice of “packaging fees,” where an agency is paid not based on commission from each client but rather from a production company for providing a “package” of contributors including writers, actors and directors.

“Historically, the agents whom writers retained were compensated by receiving a portion of any payments made to the writers by production companies for work that the agents helped them procure. By tying the agents’ compensation to the writers’ compensation, this arrangement aligned the interests of the agents with the interests of their writer clients,” the complaint reads. “Unfortunately, over the last few decades, the four largest talent agencies— defendants WME Entertainment, Creative Artists Agency, United Talent Agents, and International Creative Management Partners (collectively, “Agencies”)—largely abandoned this compensation model in favor of ‘packaging fees.’

“Plaintiffs bring this lawsuit to end the Agencies’ harmful and unlawful practice of packaging fees. The Agencies’ packaging fees violate the fiduciary duty that agents owe to their writer clients and deprive them of the conflict-free representation to which they are entitled.”

The complaint alleges that packaging fees incentivize agencies to secure less money for their clients, since they essentially are granted a stake in the overall revenue and profit of a film or television project. The document further claims that packaging fees disincentivize agencies from finding the best talent for writers to work with, or from working with production companies that would pay writers more.

Writers have had to employ managers and lawyers to protect against agencies operating against their clients’ interests, the complaint claims.

The suit accuses the agencies of breach of fiduciary duty and unfair competition, and seeks a declaration of packaging fees as unlawful, a prohibition on the agencies from further utilizing packaging fees that include writers, disgorgement of unlawful profits, restitution and damages.

This lawsuit is the latest in an ongoing conflict between the Writers Guild and the major talent agencies over the issue of packaging fees. The Association of Talent Agents, which negotiates on behalf of the agencies, wrote in February: “Last spring, WGA leadership – without warning – terminated the long-standing agreement that successfully has governed the relationship between agencies and the guild.”

“Since then, ATA and agencies have asked WGA leadership to start the process of discussing a new agreement, and we informed WGA that we will consider all their proposals in good faith and that we want to reach a constructive resolution for writers before the April 6, 2019 termination date. For nearly half a year, those repeated efforts were rebuffed by WGA leadership, with the guild incorrectly suggesting that WGA leadership stood ready to meet and that the ATA would not do so.”

When the two parties finally did come together, the ATA said, “the executive director of the WGA and his staff merely read their proposals aloud and refused to provide any of the promised explanations or otherwise elaborate on their demands. Given WGA leadership’s approach to this meeting, ATA member agencies have serious doubts about the sincerity of WGA leadership’s desire for a negotiated solution. Nonetheless, the agencies stand ready to continue these discussions and have proposed a series of additional meetings prior to the agreement’s expiration.”

Various members of the entertainment community are weighing in on Twitter, many with expressions of solidarity with the writers.

<blockquote class=”twitter-tweet” data-lang=”en”><p lang=”en” dir=”ltr”>Just fired my agents to support WGA. This would be a lot more meaningful if I had a job. <a href=”https://twitter.com/hashtag/WGA?src=hash&amp;ref_src=twsrc%5Etfw”>#WGA</a></p>&mdash; Michael Ian Black (@michaelianblack) <a href=”https://twitter.com/michaelianblack/status/1116889624666759169?ref_src=twsrc%5Etfw”>April 13, 2019</a></blockquote>

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