Inside UTA’s Writers Guild Deal: No Packaging Fees – But With a Catch

After a two-year battle to block Hollywood talent agencies to collect packaging fees from film and TV projects in addition to client commissions, the Writers Guild of America on Wednesday scored a major victory in settling with UTA, one of the four major agencies in the standoff. But there’s a big catch in the settlement, which follows the union’s deals with more than 80 talent agencies for whom packaging is less of a factor. UTA agreed to eliminate packaging fees by the end of June 2022– but only if the guild can reach an agreement with one of the three other top major agency holdouts: CAA, WME, or ICM Partners. UTA and the WGA were under no pressure to sign the deal now, an individual with knowledge of the deal told TheWrap, but there was an added desire to unite the writers and unify the industry that has been severely impacted by the coronavirus pandemic. UTA had no comment beyond UTA Co-President Jay Sures’ memo to staff on Wednesday detailing the settlement. “UTA reached out to the WGA leadership, as we have done numerous times throughout this dispute” seeking to come to an agreement, Sures wrote. According to the insider, UTA did not agree to sign WGA’s revised Code of Conduct, which was adopted last year to block agencies from packaging and affiliate production the guild sees as conflicts of interest, but instead reached an individual agreement that would allow UTA to resume representing guild writers. This is consistent with the process the guild has used to make deals with previous agencies like Paradigm and APA. In addition, UTA pledged to not start an agency-owned production studio, a project that CAA and WME have developed in recent years and which the guild views as a conflict of interest. UTA will be allowed to keep its minority stake in Civic Center Media, a production outlet developed with MRC, and will continue to take part in independent film sales with a capped interest. A memo sent by WGA to its members says that UTA will be able to hold a maximum of 20% of a production company. Additionally, UTA, as well as the other agencies, from the start said that there will be no deal if the WGA will continue to ask for confidential financial information. The two parties agreed that “if the client says no, that’s it.” Contract, deal memo and invoice information will only be provided to the guild if the writer gives consent, though the guild says in their memo that this information will allow it “and the agency to partner in systematically addressing late pay and free work.” Lastly, UTA agreed to drop its respective legal actions. Last year, the WGA sued CAA, UTA and WME over packaging fees, which the suit called illegal. In April, a judge dismissed most of the union’s claims of unlawful racketeering. The standoff flared up last spring when the WGA implemented a new Code of Conduct for agents designed to end practices it has described as conflicts of interest: packaging, where agencies bundle talent and projects together and bring them to studio as a package, for which the agency collects a fee on top of the commission for their clients’ work; and affiliate production, in which a studio partly owned by the agency is involved in a packaged project. Thousands of writers terminated their representation shortly after the code went into effect. Read the deal points from the memo below. • This agreement continues to protect your confidential contract and financial information, which was critical to us. This is information the Guild had insisted we hand over to them whether you consented or not, and it was a core sticking point. We expressed willingness to provide contract information but only if you do not object. Our agreement is that if you tell us not to provide your contract information to the Guild, we will not do so. Without this, UTA would not have made this agreement. • We have agreed to eliminate the practice of packaging starting two years from now. We did so despite the long history of packaging that has provided immense benefits to writers, actors, directors and other artists. We made this agreement on the condition that this provision takes effect only if the Guild reaches a similar arrangement with one of the other major talent agencies. • UTA will maintain its involvement in our existing production entities, protecting our ability to provide financial terms for you that are stronger and more beneficial than legacy production entities can offer. We have agreed to cap our minority profit participation and not launch any majority-owned production studio, which are steps we did not ever intend to take. • We also mutually agreed to dismiss our respective legal actions. This includes the litigation launched by the WGA leadership against the major agencies in the moments when this dispute began and the defensive lawsuit we filed against the Guild in response.