WME Reaches Deal With WGA on Packaging and Endeavor Content Divestment

WME and the WGA have finally come to terms on a settlement that will allow WME to resume representing writers after a nearly two-year standoff with the guild. WME was the last agency holdout in the WGA’s campaign to reform the rules governing how talent agents represent union writers.

The WGA is expected to announce the pact later today. Reps for WME and the guild did not immediately respond to requests for comment.

The guild’s hard-fought campaign promises to end the decades-old industry practice of agents receiving packaging fees from producers, and it establishes strict new rules that prevent agencies and their parent companies from owning more than 20% of production or distribution entities. WME fought hard and had the most complicated negotiation with the guild because parent company Endeavor had heavily invested in production and distribution activities through its Endeavor Content unit.

The plan for divesting Endeavor Content is still unclear. One of the biggest hurdles in separating Endeavor Content from the rest of Endeavor is the fact that the production-distribution unit has upwards of 300 projects in various stages of development. Endeavor Content also has existing contracts with dozens of WGA members, agreements that had been allowed by the guild as Endeavor Content accelerated its development activity in 2017.

Led by WGA West president David Goodman and WGA West executive director David Young, the guild set its sights on reforming its agency franchise rules in 2018. Concerns about inherent conflict-of-interest issues in packaging had long simmered among some guild members and leaders. The more recent expansion of large talent agencies into production and distribution through Endeavor Content, CAA’s Wiip and investments by UTA had also raised conflict-of-interest alarm bells.

At the outset, the WGA seemed to be a facing an uphill battle in trying to bring about major changes to longstanding industry practices. The largest agencies — notably CAA, WME, UTA and ICM Partners — sought to negotiate a new agreement through the Association of Talent Agents bargaining organization. But those talks were fitful and unproductive and by April 2019 the guild directed its members to fire agents who would not agree to the guild’s new rules.

That mass separation of scribes from representatives led to strain and confusion across the industry as suddenly agents weren’t fulfilling their traditional matchmaking function of facilitating film and TV deals for clients. It also sparked a flurry of litigation between the guild and the agencies. Last month, federal judge Andre Birotte Jr. in Los Angeles told lawyers for both sides to work harder at reaching a settlement in the case originally filed by WME, CAA and UTA accusing the guild of mounting an illegal boycott against the agencies.

More to come

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