In a memo to its members, the Writers Guild of America says it is not close to reaching a franchise agreement deal with Creative Artists Agency or William Morris Endeavor, who remain the two holdouts in the guild’s attempts to phase out packaging fees.
“We’ve had cordial discussions with both WME and CAA,” read the memo from the guild’s negotiating committee. “We wish we could say we’re close to a deal, but we’re not.”
In the past few months, the WGA’s efforts to limit agency ownership in affiliate production studios and to terminate packaging fees have taken a sudden turn in their favor. While a federal judge dismissed several key claims in the guild’s lawsuit against Hollywood’s top agencies last spring, it has since signed landmark deals with United Talent Agency and ICM Partners, who have agreed to phase out packaging fees within the next two years in exchange for some concessions, particularly a larger allowable percentage of ownership in affiliate studios and agreements to maintain client-agent confidentiality.
But while those two agencies were able to negotiate better terms for themselves, the WGA says that it is drawing a hard line against raising affiliate studio ownership any further.
“To be blunt, we’re not going to give them a different and better deal because they waited,” the memo says. “We’re not going to keep pushing back the sunset period on packaging. We’re not going to allow more than 20% ownership of a production studio.”
“”WME and CAA chose to sit out the negotiation for well over a year, hoping members would give up, and relying on a lawsuit that won’t even go to trial, if at all, until summer 2021,” they continued. “Because of their corporate structures and private equity investors, WME and CAA have to make decisions about the future of their affiliate production companies. We’re happy to hear their plans and proposals, but ultimately it is their responsibility to find a way out of their dilemma.”
Last month, during a keynote Q&A for the UCLA Entertainment Symposium, CAA managing partner and co-chair Bryan Lourd lamented how his agency had been unable to come to terms with the Writers Guild, but said that the two sides “a very different way of looking at where the industry is going” and gave the same declaration the WGA is giving now that it would be up to the other side to find a way out of the impasse.
“With zero sort of apology, I hate how this has gone; I don’t like anything about it,” said Lourd. “We never wanted to be in conflict with them, I don’t want to be in conflict with them now. We’re not holding out, I hope we do make a deal. We want to make a deal. We want to have a conversation about about what we know from the street about what is actually going on in their members lives and what the opportunities are.”
“We have not had the opportunity to do that, which is something I think most people don’t know. I think we will, and I expect in the near future that we won’t be suing each other. But that’s up to them.”