WGA Sues Talent Agencies in Battle Against Packaging Fees - Variety

The Writers Guild of America has filed a lawsuit against WME, CAA, UTA and ICM as the guild steps up its fight against Hollywood’s largest talent agencies over conflict of interest concerns.

“We are here today to announce the filing of a lawsuit to establish that packaging fees are illegal under the law of California,” WGA general counsel Tony Segall said on Wednesday at the Writers Guild’s Los Angeles headquarters.

The suit has been filed on behalf of the WGA West and East. Packaging fees are at the center of the suit, in the form of two claims that say the agency practice violates state and federal law.

Two writers — Meredith Stiehm and Barbara Hall — spoke about what they said were harmful experiences with packaging fees. Stiehm was a creator on the CBS series “Cold Case.” In the show’s seventh season, Stiehm was asked to gut her budget, leave location shooting in Philadelphia, forgo music licensing and make other concessions she said “adversely affected the quality of the show.”

Meanwhile, she noted, CAA made $75,000 per episode as a part of their packaging fee on the series. The production studio, Warner Bros., refused to reduce the fee. Stiehm estimated CAA made $0.94 cents on every dollar she earned on the show, on top of their commission as her agent.

Segall encouraged members of the WGA who have yet to disclose the firing of their agents — or openly decry the Code of Conduct at the heart of the war — to “think about the well-being of their guild and their members.”

The WGA’s lawsuit had been expected amid the mushrooming battle between the guild and ATA. The sides had been trying to negotiate a new agency franchise agreement during the past two months, but talks broke down last week as tensions flared and the WGA and ATA were far apart on key issues.

On April 12, the WGA issued a directive to members to terminate their business relationships with any agents that have not signed on to the WGA’s new Agency Code of Conduct. It’s believed that more than 1,000 such termination letters have been sent in the past few days, a development that has left the industry in a state of uncertainty about how to move forward with dealmaking that involves WGA members.

The WGA is taking aim at the decades-old industry practice of talent agencies receiving packaging fees on TV series from production entities. The guild maintains this is an inherent conflict of interest, and it has broadly accused agents of failing to fight for higher salaries for writers in favor of protecting their own financial interests through packaging fees. The guild has asserted that this is a violation of talent agents’ fiduciary responsibilities to writer clients.

More to come.

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