For the last month, Hollywood has percolated with anxiety over a brewing battle between two huge swaths of the entertainment industry: writers and agents. On April 6, the 43-year-old legal agreement that regulates business between TV and movie screenwriters and their talent agencies will terminate unless the two sides can forge a new agreement. The two sides plan to sit down on Tuesday to negotiate. Hundreds of millions of dollars and a chance to reshape the way the industry works are at stake, and nerves, it is fair to say, are a little frayed.
“This has the potential to be a really, really big bang,” as one veteran TV writer told me.
“The endgame may be to break up the agencies as they currently exist,” speculated a TV show-runner who attended some of the many recent meetings held by the Writers Guild for its members, as well as meetings with the agency that represents her. “No one is sure if we are doing the right thing here, but it’s clear there are conflicts of interest that were allowed to prosper and shape the industry.”
The complicated dispute revolves around the question of what role a talent agent should play in an era of huge change for the industry. Several of the major Hollywood agencies have mutated into full-fledged media conglomerates in recent years, with private-equity investors increasingly pushing them to diversify in search of new revenue sources. Where agents once focused on the percentage they got as job finders for their writer, actor, and director clients, those at big outfits like WME, UTA, and CAA—which represent much of the industry’s A-list—now frequently play a bigger part in the overall deal-making process. That sometimes includes producing projects and packaging, which happens when agents combine multiple clients, such as a writer, actor, and/or director, and sell them to a studio as a—you guessed it—package. In such deals, which are how most scripted TV shows come to market now, agents forego the traditional 10 percent commission on the writers’ fees, instead being paid directly by the studios. In return, they stand to reap more from the packaging fees they get from studios (parts of which are taken directly out of the project’s budget) than from commissions for getting a writer client work.
“These agencies now have a stranglehold on talent because packaging has become the only way you could get something made,” the show-runner said. The Writers Guild argues that not only does this packaging fee consume part of a project’s budget that could otherwise go toward more writer jobs, but it also alters the very basis of the client-agent relationship, leaving the agent little incentive to push for writers to get the highest possible fee.
“If your agency is also your employer, you don’t have an agency,” the guild has argued in its official literature on the subject. “Just as it would be a bad idea to have studio business affairs negotiate a deal with itself on your behalf, it is an equally bad idea to allow agencies to be producers, owners of content, and the employer of writers, yet still represent you.”
In its own talking points, the Association of Talent Agents has countered that these practices only help clients. In an industry increasingly loath to take risks, agencies have had to go to greater lengths to get clients’ projects made, which means they’ve taken on “a larger share of the responsibility for raising financing and seeking distribution, and have invested heavily in creating the infrastructure to provide such services. Over the last five years, more than 1,000 independent films have been released with support from agencies—creating great opportunity for writers and the broader industry.”
The guild and the agents association have been trading such salvos in recent weeks, as each side accuses the other of unwillingness to negotiate. The situation was summed up by one writer I spoke with who said, “Your representative should not also be taking money from the people that are supposed to be representing you with or against.” But, this person asked plaintively, “How do you put the genie back in the bottle?”
If the two sides fail to come to an accord before the existing agreement lapses, the W.G.A. has threatened to bring a lawsuit challenging the practice of packaging. On March 25, it will also ask its members to vote on a new “code of conduct” that would ban agents from entering into packaging and production deals. In other words, if a new agreement is not reached between the W.G.A. and the A.T.A., the code of conduct will force writers to walk away from agencies that won’t agree to the new rules. It would be akin to a Hollywood version of Brexit: a vote that changes the landscape of the industry, with no roadmap in sight.
Although this is an unprecedented situation, it will not bring TV and movie production to a halt the way a strike would, because it will only affect future projects. But it has brought to the fore simmering tensions and resentments from screenwriters. That’s particularly true in the case of TV writers, who helped spark the Peak TV explosion, and have in many ways benefited from it, but find their earning prospects diminishing thanks to changing industry practices. Streaming and cable shows tend to have much shorter episode orders, leading to less income and security for writing staff. And the rise of “mini-rooms” represents a huge shift in the way TV is created, increasing instability for writers and potentially allowing studios to circumvent the standard compensation structure.
“Aside from the huge deals that everybody hears about, like Shonda Rhimes and the 9 or 10-figure deals of the superstars, average writers’ pay rates are relatively stagnant in an explosively successful industry where agencies and studios are making money hand over fist,” a TV writer complained, suggesting that the future prognosis only looks worse. “So when you step back from that picture and look at the parties that are doing extremely well off of our ideas, then you kind of have to shake them up a little bit because it’s not right.”
One agent expressed frustration to me that this was being presented as an ultimatum: “We don’t have to blow the whole thing up!” An industry executive suggested that this push was a way to vent misplaced anxiety. “There are a lot of other things changing in the business, but this is the one they can get upset about . . . and let it out, that the business isn’t the same.”
The W.G.A.’s decision to confront the agencies came out of the guild’s surveys and outreach meetings, which surfaced widespread disgruntlement with current agenting practices. A common complaint I heard in talking to TV writers was that agents often push them toward developing their own shows (which could potentially yield a big packaging fee for the agent) rather than help them get staffed on existing series (which would offer more financial stability to a writer but less of a payoff for the agency).
“Agents are running the risk of rendering themselves obsolete,” according to one LA-based TV writer, who said that most of the staff-writing gigs she has gotten over the years came through her own connections or her manager. “Increasingly, a very small percentage of work comes through the agencies and it’s increasingly unusual for agents to really negotiate your deal. It’s usually my lawyer negotiating the actual nuts and bolts.”
On the other hand, that same writer acknowledged that the current standoff is emotionally distressing, because many writers have close, long-standing relationships with their agents and are wary of the outcome of the negotiations. “There are a lot of really wonderful agents who genuinely see themselves as our advocates, and I’m very wary of turning all those people into enemies,” she said. “So I just am not sure what success looks like.”
The W.G.A. has a history of strong moves and a unified membership, with six strikes under its belt since 1960. In 2007, writers went on strike for 100 days over digital distribution, bringing many TV and movie productions to a screeching, expensive halt; the W.G.A. came close to another strike in 2017.
Many writers I spoke to said that they felt tremendous support for the guild’s moves among fellow members, akin to the feeling before the 2017 strike vote, and described recent W.G.A. meetings about the situation in which attendees leapt to their feet cheering. Yet many expressed nervousness about what might happen next month.
“I think it has the potential to be a complete game changer,” said one writer, “and it also has the potential to be pretty messy.”
