WGA Outlines Next Step In Separate Negotiations With CAA & WME Over Franchise Agreement

The WGA said Wednesday that it is in talks with WME and CAA for an agreement that would end their nearly 18-month standoff over packaging fees and the agencies’ affiliations with corporately related production entities. “In short: our conversations continue,” the guild said in a communique to members.

The chief holdup is CAA’s ownership interest in affiliate wiip and WME’s ownership stake in affiliate Endeavor Content. The guild has already agreed that agencies that sign its franchise agreement can hold a 20% ownership stake in production entities, but getting CAA’s and WME’s stakes down to 20% has been the hang-up.

CAA put out a statement earlier this month saying it had accepted the guild’s terms – except for a couple of points having to do with wiip – but the guild said that there was no deal because “CAA has proposed changes to the agreement that the WGA has not – and cannot – agree to.”

In its message to members today, the guild said: “As you would expect, reaching agreement with the two agencies most conflicted in these ways requires the utmost care. We are, therefore, consulting experienced corporate merger and acquisition counsel. For there to be an agreement with CAA and WME, we must negotiate divestment terms that absolutely protect writers’ interests.”

The guild said that “The next step for the two agencies, with which we are negotiating separately, is for them to disclose information we’ve requested on these topics:

• The agencies’ and their investors’ current ownership of affiliated production entities;
• The current direct or indirect ownership of the agencies, and the agreements that govern their relationship with entities such as Silverlake and TPG;
• Copies of existing agreements between any affiliate production entity and its direct or indirect owners;
• Copies of any certificates of incorporation or corporate bylaws or similar documents of the affiliated production entities.

“This information will enable the Guild to evaluate any proposals WME or CAA may make regarding the changes necessary to bring them into compliance with the terms of the franchise agreement.”

Read the information request the guild has sent to WME and CAA here.

In April 2018, the guild notified the agencies of its intent to renegotiate its Artists’ Manager Basic Agreement, and a year later, writers voted overwhelmingly to terminate the AMBA and all unfranchised agencies. “Since then,” the WGA said, “we have negotiated nine successive versions of the franchise agreement to accommodate reasonable agency proposals between May 2019, when we signed Verve, and this past summer, when we signed UTA and ICM. Of their own choice, WME and CAA are the last agencies to come to the table. While we are currently engaged with both of them, it is imperative that we preserve our new franchise agreement’s guarantee of properly un-conflicted representation for all writers.”

In the meantime, the guild said its Working Rule 23 – which prohibits members from being represented by non-franchised agents – “remains in effect with respect to both CAA and WME.”

Any deal the guild reaches with CAA and WME – if and when it comes to that – would also have to resolve their ongoing federal antitrust lawsuits.

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