WME makes new proposal to WGA to end 20-month boycott
The WGA rejected WME’s latest proposal that would end their long-standing legal battle, saying “WME has yet to seriously resolve its conflicts of interest.” WME sent the guild a new proposal on December 22 which, had it been accepted by the guild, would have ended the WGA’s 20-month boycott of the agency. WME said last week that it had “updated the terms of our proposal and submitted it to the WGA in a good faith effort to revive our discussions.” We want to find a way forward with the Guild and get back to representing our writer-clients. We are willing and available to meet with the guild as soon as possible, including during the holidays, to reach a resolution. “
WME makes new proposal to WGA to end 20-month boycott
The guild’s agency negotiating committee, however, says the agency’s proposal is unacceptable because it has more favorable terms than the deal reached with CAA on December 16, leaving WME as the last big agency. not having signed the WGA franchise agreement, which costs the packaging and limits the ownership of an affiliated production company to 20%.
Here is the full text of the bargaining committee’s message to members of the Writers Guild:
“We are writing to update you on the most recent development with WME.
“As a reminder, on September 1, we announced that the UTA / ICM franchise agreement would not be amended for CAA and WME, but that provisions would have to be negotiated to mitigate additional conflicts of interest for these agencies. On December 16, CAA signed the UTA / ICM franchise agreement, along with a cover letter that spelled out essential additional terms and protections regarding CAA’s production company, wiip, and private equity owners. of the agency. Less than an hour after the CAA deal was announced, WME publicly stated that the deal “… suggests a way forward for WME to come to an agreement as well.”
“On December 23, WME sent out franchise agreement and cover letter proposals to the WGA which they billed to the writers and the city as providing this route. In fact, what WME has proposed substantially changes both the CAA cover letter and the franchise agreement, repeatedly undermining the basic protections these agreements offer to authors.
So that you can judge for yourself, here are some examples:
• CAA and TPG (the owner of CAA’s private equity) relinquished all operational control of wiip and placed it in a blind trust administered by a third party trustee, with an agreement to sell 20% or less within agreed with the WGA. These protections mean that as writers return to their agents, the Guild can be confident that CAA and TPG will comply with their end of the bargain. WME and its private equity owners, Silver Lake Partners, have not offered to place their stakes in Endeavor Content in a blind trust. WME proposed that they be allowed to immediately sign the franchise agreement and revert to representing the writers, even though they and Silver Lake retain control over Endeavor Content.
• CAA agreed to penalties for failing to meet the 20% ownership limit by the agreed date, such as the escrow of all wiip commissions and package fees and the potential suspension of the franchise agreement. by CAA.
WME’s proposal rejects all penalties for failing to meet their obligation to divest from Endeavor Content.
• CAA and TPG have agreed that they will not own, individually or together, more than 20% of wiip.
WME insists that they and an entity owned by Silver Lake may together own more than 20% of the Endeavor content.
• The UTA / ICM / CAA franchise agreement binds all shareholders of the agency to the terms of the agreement, regardless of their ownership interest in the agency.
WME wants to exempt shareholders who own less than 20% of the agency from conflict of interest regulations, meaning that a shareholder with 19% of WME could also own 100% of a studio. This would considerably weaken the protections of the existing franchise contract.
• The UTA / ICM / CAA franchise agreement does not allow any exemption of pre-existing projects from the 20% ownership limit.
WME insists on retaining unlimited ownership of Endeavor Content projects currently in production or already in production, including subsequent seasons, sequels and spinoffs. They cited the packaging by analogy. But the Guild was very clear from the start that pre-existing packages were allowed to stay only because it would be impossible to recover past orders from the writers. Affiliate production does not offer such a parallel.
This is not an exhaustive list of the differences between WME’s proposal and the franchise agreement signed by all of the company’s other agencies and the cover letter signed by CAA. However, it suffices to illustrate the fact that WME has yet to seriously tackle its own conflicts of interest.
However, WME was right: the CAA deal represents a way forward – the way forward. WME waited until all the other agencies in town found a way to partner with the Guild and revert to representing writers. After being mostly on the sidelines over the past 20 months, there will be no ‘last’ bonus for WME – no compromise for being the most conflicted of all the agencies – no modification of our existing agreements which relax the protections which writers fought for almost two years to achieve.
If WME wishes to represent the writers again, they and Silver Lake can agree to the terms in the franchise agreement and cover letter linked here.
WGA Negotiating Committee