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WGA sues ATA over packaging fees

The Writers Guild of America (WGA) has launched an anti-packaging lawsuit against the four biggest US agencies, prompting an angry response from the Association of Talent Agencies (ATA).

The ATA has accused the WGA of misleading its members after the union took its dispute against US agents to court.

The WGA’s action, filed in the LA Superior Court, argues that the fees charged by UTA, WME, CAA and ICM Partners for bundling talent and bringing projects together, known as packaging, violate state law and federal competition laws, referring to the ‘anti-kickback’ rules outlined in the Taft-Hartley Act.

The WGA wants an injunction to stop the practice and has demanded repayment of monies gained from the practice since the initial agreement was signed in 1976. US reports suggest that, should the suit be successful, the figure could run into hundreds of millions of dollars.

Karen Stuart, exec director at the ATA, blasted the action and described the development as “ironic given that the guild itself has agreed to the legitimacy of packaging for more than 43 years.”

She added: “Even more ironic is the fact that the statute the WGA is suing under prevents abuses of power and authority by labour union leaders, even as the guild has intimidated its own members and repeatedly misled them about their lack of good faith in the negotiating room.

“Today’s move confirms that the WGA’s leadership is on a predetermined path to chaos that never included any intention to negotiate.”

Stuart said the litigation could take months or years to be resolved and accused WGA leaders of “unnecessarily forcing their members and our industry into long-term uncertainty.

“While the legal process runs its course, we strongly believe that, in the interim, it remains in the best interests of writers to be represented by licensed talent agencies.

The WGA hit back at the ATA, arguing that the association’s “repeated use of anti-union rhetoric illustrates how much in denial the big agencies are.”

In a statement, the WGA added: “This matter is very simple. If the major agencies would abide by existing law – antitrust and racketeering law – this deal would have been done 11 months ago.”

The dispute, which is occurring at a key period ahead of the US’s pilot season, relates to the renegotiation of the Artists’ Manager Basic Agreement (AMBA) between the WGA and ATA, which has been in place since 1976.

The WGA produced a new code of conduct earlier this year that its members have overwhelmingly approved. It requires ATA members to eliminate the TV packaging fees they currently charge for bundling talent and bringing projects together, arguing that the model has resulted in stagnating salaries for low- and mid-level writers.

The ATA countered that the packaging fee model is better because it allows writers to forgo paying the 10% commission they would otherwise have to pay their agents.

The WGA also wants agencies to relinquish their interests in production companies and return to being simply talent agencies. Several of the biggest US agencies have in recent years been making their own moves into production and content ownership, effectively putting them in competition with their clients – something the WGA said is a clear conflict of interest.

The two sides have been unable to resolve the dispute despite extended talks, with the latest deadline for a resolution passing on Friday night.

That led to the WGA implementing its new Agency Code of Conduct on Saturday, ordering its members to fire all agents who refuse to sign it.

Some of the biggest names in Hollywood have since followed through and dismissed their agents, including Grey’s Anatomy creator Shonda Rhimes, Breaking Bad scribe Thomas Schnauz, Empire screenwriter Eric Haywood and Lucifer showrunner Joe Henderson.

Damon Lindelof (The Leftovers), Hart Hanson (Bones), Steven DeKnight (Spartacus), Alexi Hawley (The Rookie) and David Simon (The Wire) have all also dismissed their representatives, with many voicing support for the WGA under the Twitter hashtag #IstandwiththeWGA.

Members have since reportedly been forming their own networks to link writers and employers.

No further talks between the WGA and the ATA are planned at present, with the next meeting potentially in court.

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