The Writers Guild of America has filed a lawsuit against the Association of Talent Agents 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.
The suit has been filed on behalf of the WGA West and East against WME, CAA, UTA, and ICM.
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.