(Updated February 2021)
Writers Guild of America West and Writers Guild of America, East (jointly, WGA) are labor unions that represent professional writers of film, television and online video programming. The talent agency business is dominated by four agencies—WME, CAA, UTA, and ICM—that, until the present dispute, represented over 65% of the WGA members who have agents. Because the WGA is the exclusive bargaining representative for writers under labor law, talent agencies may only represent WGA members for their writing services with the express authorization of the Guild.
The WGA is engaged in a historic campaign to end the conflicted business practices of talent agencies. These practices include demanding direct payments from the studios employing their clients known as “packaging fees” and leveraging agencies’ exclusive access to talent to become producers (making them, in effect, both their clients’ representatives and employer). More than 7,000 WGA members left agencies that refused to sign a new agreement realigning the economic interests of writers with those of their agents.
The WGA membership is demanding that their agents act as proper fiduciaries, and that they earn a 10% commission on what they negotiate for their clients.
Timeline of Events:
- April 6, 2018: WGA sent a 12-month notice to terminate the 43-year-old agreement regulating talent agency representation of writers, the Artists’ Manager Basic Agreement of 1976 (AMBA). At the same time, the WGA made proposals for a new agreement that would eliminate agency conflicts of interest to the agencies’ bargaining representative, the Association of Talent Agents (ATA).
- February - March 2019: Negotiating sessions took place between the ATA and the WGA. When the ATA and its member agencies refused to accept proposals designed to eliminate conflicts of interest, the WGA announced a plan to implement a “Code of Conduct” that agencies must sign in order to represent WGA members.
The Code of Conduct prohibited agencies from taking packaging fees or owning a film or television production company. The Code also requires signatory agencies to provide the WGA with timely information to enforce the collective bargaining agreement and writers’ individual contracts.
The WGA’s right to unilaterally impose such a code is based on legal precedent, including a 1992 decision involving the National Basketball Players Association.
- March 31, 2019: 95.3% of WGA members voted in support of a resolution giving the Guilds’ governing bodies authority to implement the Code of Conduct upon expiration of the AMBA if a negotiated agreement could not be reached.
- April 6, 2019: The AMBA expired, but at the agencies’ request, the WGA granted a six-day extension, which did not result in an agreement.
- April 13, 2019: WGA implemented a Code of Conduct, which the largest agencies, including WME, CAA, UTA, and ICM, refused to sign. A number of smaller agencies signed the Code the following week.
- April 17, 2019: WGA and a group of individual writers filed suit against WME, CAA, UTA, and ICM in Los Angeles Superior Court. The lawsuit alleged that packaging fees are illegal under two legal theories. First, packaging fees are a violation of California’s law of fiduciary duty because they create numerous conflicts of interest between writers and agencies. Second, packaging fees constitute illegal kickbacks from an employer to an employee representative as prohibited by Section 302 of the federal Labor-Management Relations Act, 29 U.S.C. §186, and therefore packaging is an illegal business practice under California’s Unfair Competition Law, Bus. & Prof. Code §17200 et seq. The lawsuit seeks declaratory and injunctive relief prohibiting packaging, as well as damages for past violations.
- April 22, 2019: More than 7,000 WGA members submitted written termination letters that the Guild delivered to the agencies.
- May 16, 2019: WGA entered into a negotiated franchise agreement with Verve, a mid-size talent agency.
- May 23, 2019: Endeavor, the parent company of WME, filed for an IPO. The WGA informed potential investors of the dispute with the WME.
- June 7, 2019: The ATA presented a new proposal that still failed to address conflicts of interest, including packaging and producing.
- June 19, 2019: WGA announced that it would no longer negotiate with the ATA, and would instead negotiate with individual agencies.
- June 24, 27, and July 1, 2019: In separate but substantively similar actions, WME, UTA, and CAA sued the WGA in federal district court alleging antitrust violations.
- June 28, 2019: WGA sent letters to the ATA and its member agencies demanding it cease and desist from certain anticompetitive behaviors. The letters asserted that the agencies had engaged in collusive behavior to set prices for packaging fees and collectively refused to deal with the WGA in violation of antitrust laws.
- July 22-25, 2019: The WGA reached negotiated franchise agreements with two ATA agencies Kaplan Stahler and Buchwald) as well as the newly-formed agency Culture Creative Entertainment.
- July 25, 2019: The WGA launched its Staffing & Development Platform, an online hub to help connect writers with a range of job opportunities in features and television. The platform introduced new features that allow writers to submit for Open Writing Assignments (OWAs), request general meetings, and find out details about what kinds of projects various producers, PODs, and companies are looking for. In addition, it incorporated previously developed online tools such as Find a Writer, the Staffing Submission System, the Weekly Feature Memo, and Weekly TV Development Memo. Over 600 producers, PODs, and companies were registered on the platform at the time of launch.
- August 19, 2019: WGA expanded its litigation against the major talent agencies (WME, CAA, UTA, and ICM) by filing claims in United States District Court charging that packaging fees violate state and federal antitrust laws and the Racketeer Influenced and Corrupt Organizations (RICO) Act. The filings also responded to and denied as without merit antitrust claims brought against the Guild by three of the four agencies. At the same time, WGA withdrew its state court action to allow all of the claims to be consolidated in federal court.
- September 13, 2019: Over the agencies' objections, the federal judge overseeing the WGA/WME-CAA-UTA lawsuits granted the Guild’s motion to consolidate the three cases, and required the agencies to file a new single amended complaint by September 27, 2019. As a result, the case is more streamlined and economical to litigate.
- September 16, 2019: Incumbent candidates in WGAW Officer and Board elections were overwhelmingly re-elected by the membership. Member turnout reached record levels, in what was widely considered a referendum on the agency campaign.
- September 26, 2019: Facing tepid interest from investors, Endeavor pulled its IPO, less than a day before it was scheduled to open. Before withdrawing its offering, the company had reduced the number of shares on offer and lowered its estimated share price about 15%, to between $26 and $27, down from $30 to $32. The IPO was expected to raise as much as $600 million and help pay down the company’s $4.6 billion debt.
- November 13, 2019: WGA reached a negotiated franchise agreement with Abrams Artists Agency.
- November 18, 2019: WGA reached a negotiated franchise agreement with the Rothman Brecher Ehrich Livingston Agency.
- January 6, 2020: The federal judge overseeing the WGA/WME-CAA-UTA conflict denied the WGA’s motion to dismiss the agencies’ antitrust lawsuits, allowing their complaints to move forward to trial.
- January 17, 2020: WGA reached a negotiated franchise agreement with the Gersh Agency.
- January 21, 2020: WGA reached a negotiated franchise agreement with the Agency for the Performing Arts (APA).
- March 23, 2020: WGA reached a negotiated franchise agreement with Paradigm.
- April 27, 2020: The federal judge granted the agencies’ motion to dismiss some of the WGA’s legal claims. Yet, the core claims of the lawsuit – namely, that packaging is a breach of fiduciary duty, and that the agencies have committed antitrust violations by fixing the price of those packages – were upheld. Consequently, six claims would continue to trial and discovery would proceed.
- July 15, 2020: WGA reached a negotiated franchise agreement with UTA.
- August 5, 2020: WGA reached a negotiated franchise agreement with ICM.
- August 12, 2020, 2020: The federal judge denied WME’s and CAA’s motions to dismiss the remainder of the WGA’s fraud and price-fixing allegations.
- November 17, 2020: CAA and WME asked the federal judge to issue an injunction requiring the WGA to allow the agencies to represent writers until the court case, an action that would have fundamentally undermined the WGA’s campaign.
- December 16, 2020: WGA reached a negotiated franchise agreement with CAA. CAA signed the UTA/ICM franchise agreement, as well as a side letter binding its private equity owner TPG and other shareholders to no more than a 20% ownership stake in wiip and instituting penalties for failure to achieve compliance. WGA and CAA settled their legal claims against each other.
- December 30, 2020: The federal judge denied WME’s request for a preliminary injunction. In his decision, the judge ruled that the court did not have jurisdiction to interfere in the labor dispute.
- February 5, 2021: WGA reached a negotiated franchise agreement with WME. The WGA also negotiated a side letter with WME, its parent company Endeavor, and Endeavor’s private equity owner Silver Lake that contains the protections previously negotiated with CAA, as well as additional terms. The WME side letter addresses two complicated conflict of interest issues: first, that WME is currently majority-owned by Silver Lake and, second, that WME hopes to become a publicly-traded corporation in the future.
WGA and WME also agreed to withdraw the legal claims each has brought against the other in federal court.
This agreement concluded the negotiation phase of the agency campaign. All agreements expire on April 12, 2025 unless mutually extended on a year-by-year basis.