Inside UTA’s Writers Guild Deal: No Packaging Fees – But With a Catch
After a two-year battle to block Hollywood talent agencies to collect packaging fees from film and TV projects in addition to client commissions, the Writers Guild of America on Wednesday scored a major victory in settling with UTA, one of the four major agencies in the standoff.
But there’s a big catch in the settlement, which follows the union’s deals with more than 80 talent agencies for whom packaging is less of a factor. UTA agreed to eliminate packaging fees two years from now — but only if the guild can reach an agreement with one of the two other top major agency holdouts: CAA or WME. (A third top agency, ICM Partners, is not a factor in the settlement and remains a holdout in the standoff with the WGA.)
UTA and the WGA were under no pressure to sign the deal now, but amid the coronavirus concerns, an individual with knowledge of the deal told TheWrap, but there was an added desire to unite the writers and unify the industry that has been severely impacted by the pandemic.
*Also Read:* UTA Agrees to Deal With WGA, Resume Representation of Writers
In a memo sent to staff on Wednesday by UTA Co-President Jay Sures, he said that “UTA reached out to the WGA leadership, as we have done numerous times throughout this dispute,” seeking to come to an agreement.
According to the insider, the UTA did not agree to sign WGA’s revised Code of Conduct, which was adopted last year to block agencies from packaging and affiliate production the guild sees as conflicts of interest, but instead reached an individual agreement that would allow UTA to resume representing guild writers.
In addition, UTA pledged to not start an agency-owned production studio, a project that CAA and WME have developed in recent years and which the guild views as a conflict of interest. UTA will be allowed to keep its minority stake in Civic Center Media, a production outlet developed with MRC, and will continue to take part in independent film sales with a capped interest.
Additionally, UTA, as well as the other agencies, from the start said that there will be no deal if the WGA will continue to ask for confidential financial information. The two parties agreed that “if the client says no, that’s it.”
*Also Read:* WGA Leadership Unanimously Endorses Tentative Deal With Studios
Lastly, UTA agreed to drop its respective legal actions. Last year, the WGA sued CAA, UTA and WME over packaging fees, which the suit called illegal. In April, a judge dismissed most of the union’s claims of unlawful racketeering.
The standoff flared up last spring when the WGA implemented a new Code of Conduct for agents designed to end practices it has described as conflicts of interest: packaging, where agencies bundle talent and projects together and bring them to studio as a package, for which the agency collects a fee on top of the commission for their clients’ work; and affiliate production, in which a studio partly owned by the agency is involved in a packaged project. Thousands of writers terminated their representation shortly after the code went into effect.
Read the deal points from the memo below.
• This agreement continues to protect your confidential contract and financial information, which was critical to us. This is information the Guild had insisted we hand over to them whether you consented or not, and it was a core sticking point. We expressed willingness to provide contract information but only if you do not object. Our agreement is that if you tell us not to provide your contract information to the Guild, we will not do so. Without this, UTA would not have made this agreement.
• We have agreed to eliminate the practice of packaging starting two years from now. We did so despite the long history of packaging that has provided immense benefits to writers, actors, directors and other artists. We made this agreement on the condition that this provision takes effect only if the Guild reaches a similar arrangement with one of the other major talent agencies.
• UTA will maintain its involvement in our existing production entities, protecting our ability to provide financial terms for you that are stronger and more beneficial than legacy production entities can offer. We have agreed to cap our minority profit participation and not launch any majority-owned production studio, which are steps we did not ever intend to take.
• We also mutually agreed to dismiss our respective legal actions. This includes the litigation launched by the WGA leadership against the major agencies in the moments when this dispute began and the defensive lawsuit we filed against the Guild in response.
*Related stories from TheWrap:*
UTA Agrees to Deal With WGA, Resume Representation of Writers
WGA Leadership Unanimously Endorses Tentative Deal With Studios
WGA West Committee of Black Writers Call on Studios to Prioritize Diverse Hiring
