Ask a Screenwriter #3
The Writers’ Guild of America demanded that the Talent Agencies sign a Code of Conduct. The Agencies refused. So, all WGA writers fired their agents and agencies. Writers will remain “unrepresented” by agents until an agreement is reached.
The Code of Conduct is a document intended to eliminate Packaging Fees and curb the practice of Agents receiving money as de facto producers.
Agencies, in particular, the “Big Five” (CAA, WME, UTA, and ICM) who thrive on packaging fees and who feel they can’t survive without them, refused to give them up.
To explain in detail:
A Talent Agent negotiates fees with Producers and studios on behalf of Writers.
A Talent Agent makes money by taking 10% of the fee negotiated.
For there not to be a conflict of interest, the Talent Agent negotiating with a Producer should not also be a Producer on the project.
Since the 60s it has been illegal for an Agent to also be a Producer.
However, the most powerful agencies (like CAA and WME) often behave like producers. Whenever a writer sets up a TV pilot, the agency charges the studio a “packaging fee.” This fee amounts to 6% of licensing and 10% of the gross, which is precisely something that a producer or a writer-producer might get.
“Packaging Fees” are ostensibly paid so that a powerful agency will bring other talented writers, actors, and directors it represents to the project. However, attaching additional talent is a producer’s job. And it’s not clear that the people who are “packaged” are having their best interests served. Most problematically, the agency could end up making far, far more than 10% of the deal:
Said Meredith Stiehm, the creator of Cold Case, “When the show was sold, CAA negotiated a packaging fee for itself, without my knowledge…It wasn’t until six years and 134 episodes later that I learned about it. It turned out that on the show I created, I worked on exclusively for years, CAA ended up making 94 cents for every dollar I earned. That is indefensible. An agency should make 10% of what a client makes — not 20, not 50, not like in my case, 94%. 10% is enough.”
Furthermore, companies like the newly formed, WME affiliated Endeavor Content are both producers and agent-like representatives. Although the heads of Endeavor Content call themselves “matchmakers,” writers feel that they are behaving precisely like agent-producers.
Writers say there is a conflict of interest. Agencies say that if the money is good, what’s the harm?
Writers, who often get their own work based on their own relationships, are asking themselves, “If I have a lawyer and a manager, what do I need an agency for?”
Agencies, who are struggling to find ways to make money in a rapidly changing industry, say “everybody benefits from agency packaging and participation. The writers are creating chaos, and the result will be that everybody loses.”
See these articles:
Why Are Agents Producing Shows? Writers Guild Would Like to Know
Endeavor Content Takes Big Swings to Expand Options for Producers
WGA Sues Big Four Agencies Over Packaging Fees
I answered this question on Quora in the space Ask A Screenwriter. Here are my recent articles On Screenwriting.