At the Request of Their Union, Screenwriters are Firing Their Agents

At the Request of Their Union, Screenwriters are Firing Their Agents Contract

An ongoing contract dispute is sending shockwaves through Hollywood, and it's going to have an interesting effect on what stories get told on your favorite show.

Variety reported on Friday that the Writers Guild of America has called on its members to fire their agents. A months-long negotiation between the WGA and the ATA (Association of Talent Agents), the union representing agents, over revising a 43-year-old franchise agreement had broken down after the two organizations had failed to come to terms.

Over the past few decades a number of the larger talent agencies had developed the practice of negotiating their own contracts with studios that created conflicts of interest between the agents and their putative clients.

Friday represented a last-ditch effort to work out a compromise, but the WGA’s negotiating committee announced late in the afternoon that it had not been able to reach a deal with the ATA. “So there is no settlement,” the committee said.

“So what happens now?” the committee said. “In a strike situation, we all know that we are to refrain from crossing the picket line or writing for a struck company, and we’re asked to show our solidarity by picketing, which is the public and moral face of our dispute.”

“In this situation there are two actions required of all members:  First, do not allow a non-franchised agent to represent you with respect to any future WGA-covered work.  Second, notify your agency in a written form letter that they cannot represent you until they sign the Code of Conduct.”

Not all talent agents were fired on Friday - a number of smaller agencies had already agreed to the new terms - but all of the major agencies have lost clients. In fact, the ex-clients have taken to posting their severance letter on Twitter.

The reason the WGA walked out of the negotiations is that the major talent agencies no longer serve the best interests of their writer clients. In some cases they have launched or invested in production companies, and in others cases they have negotiated production deals with studios. This means that when a writer's agent sits down to negotiate a deal with a studio, the agent's boss is effectively sitting on the other side of the table.

Clearly that is a conflict of interest, and it's not the only one.

Amy Berg explained on Twitter last month how talent agencies now negotiate packaging deals with studios where the agency gets paid and their clients do not. You can find her tweet chain on Twitter; here are ten tweets that concisely sum up the issue at hand.

"In 1976, an agreement was entered into between the WGA and the ATA called the Artists' Manager Basic Agreement (AMBA). The AMBA hasn't been renegotiated since that time. That's 43 years ago. Even I can do that math. As you can imagine, the industry has changed a lot since then. Since then, the major agencies have essentially become an oligopoly of four: CAA, WME, UTA, ICM. Three of them have sold stakes to private equity funds. Undoubtedly these investors are seeking higher than usual returns and are demanding a renewed focus on the bottom line."

"Packaging and producing fees. That's where the money is for agencies these days. Both of which are illegal practices representing huge conflicts of interest. The big four are using their monopoly control of top writing talent to demand to be paid directly by the studio rather than working off commission. In television, they do this through a formula called 3-3-10 (3%, 3%, 10%). They're calling these packaging fees. "

"The first 3% is from the network license fee and is taken directly from the budget of a series. Typically that amounts to 30K to 100K of the budget per episode. That's money that could be spent on hiring more writers that the showrunner now no longer has to work with. The second 3% is also from the license fee, but deferred. The kicker is the 10%... they receive 10% of the gross profits for the life of the series. Yes, gross. Yes, for the life of the series. Even if their clients leave and they no longer represent anyone on the show."

"Agencies are making more money than their clients, aka the ones doing the work. All this for a few phone calls and emails before a writing staff assembles, and then nothing thereafter."

"Agencies have blocked deals from going through before their package fee is in place. They've not negotiated in good faith in trying to secure overscale for clients because... why bother? Their money is coming straight from the studio, not the client. And some won't even fight to get their clients on projects they're packaging – it better serves them to place them on projects where they don't have a package so they can get their 10% commission."

Update: David Simon, creator of the shows The Wire and Homicide: Life on the Street, wrote a post last month discussing how he was cheated by CAA early in his career by his agent at CAA, and how packaging has hurt other writers.

In the book publishing industry, there is a strong sentiment that agents' interests are more aligned with publishers than with authors. Robin Sullivan, Kris Rusch, and others have argued that agents won't push for the best deal for an author because the agent values the long-term relationship with the publisher more.

A lot of the time it is hard to tell whether that is actually true. When it comes to the major talent agencies, it's pretty damn clear that they are not serving the interests of their writer clients.

image  by Disney via Flickr

Nate Hoffelder

View posts by Nate Hoffelder
Nate Hoffelder is the founder and editor of The Digital Reader. He has been blogging about indie authors since 2010 while learning new tech skills weekly. He fixes author sites, and shares what he learns on The Digital Reader's blog. In his spare time, he fosters dogs for A Forever Home, a local rescue group.

6 Comments

  1. Barney14 April, 2019

    I honestly don’t see how anyone could defend the agencies here. Their behavior is bad faith at best, and should obviously be illegal. But as David Simon pointed out, you can’t “disbar” an agent who fails to represent clients.

    The deeper mysteries are how this went on for so long, and why the actors and directors unions aren’t also firing their agents. They’re potentially getting screwed just as badly in these package deals.

    Reply
  2. Olivier15 April, 2019

    It is a classic case of capture by the economically stronger party. I see a parallel with the audit firms: theoretically they serve the public interest but in reality they have become the willing servants of the firms they are supposed to audit. In their case the fix was in from the start since they are paid by the firms they audit but nonetheless they were not supposed to become their handmaiden.

    What you say about author agents valuing the publisher relationship more because it is more likely to prove long-lasting makes eminent sense, too. In software it is well-known that talent jocks, recruiters etc work for the employers and only pretend to care about the “talent”. I looked enviously at the world of agents (authors, actors etc) but always wondered whether that was not too good to be true and a bit of a con, just a better packaged one. Apparently it is.

    Reply
  3. Marilynn Byerly15 April, 2019

    I have heard so many ugly stories over the years from friends in traditonal publishing whose agents made deals with publishers where they’d get really great terms for Betty Bestseller if all the other writers in their stable were given below industry standard deals.

    At the end of every course in writing I’ve taught over the years, I post a list of things I’ve learned about writing and publishing. One of those is that no one cares about your career more than you do so you should understand the business parts of being a writer and not trust the agent or the editor to protect your interests because they almost never do.

    Reply
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