WME Faces Obstacles in Reaching Deal With Writers Guild
UPDATED: William Morris Endeavor is getting pummeled in its battle with the Writers Guild of America, and it does not appear that a federal judge is going to stop the bleeding.
The uber agency asked Judge André Birotte Jr. last month to order an end to the 20-month writers’ boycott, which has caused agents and clients to flee to other firms. But at a hearing on Friday the judge seemed reluctant to do that, saying that the two sides should settle the dispute on their own.
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On Tuesday, WME offered an olive branch to the guild.
“WME has updated the terms of our proposal and submitted it to the WGA in a good-faith effort to jumpstart our discussions,” WME said in a statement. “We want to find a way forward with the Guild and return to representing our writer clients. We are willing and available to meet with the Guild as soon as possible, including over the holidays, in order to reach a resolution.”
Unless Birotte intervenes, settling the dispute likely means WME tapping out as quickly as possible. But that will not be easy, as it will require selling off 80% of Endeavor Content while doing as little damage as possible to dozens of TV shows and films in various stages of development. WME wants until the summer of 2022 to do that, and wants to grandfather in existing projects.
But the WGA has rejected that, and has enough leverage — assuming that Birotte stays out of it — to dictate terms.
How did things get to this point? It boils down to solidarity — the writers have it, and the agencies do not. At the outset of the dispute, the agencies were negotiating through the Association of Talent Agents. They were taking a hard line, saying that packaging fees were an essential part of the business and that affiliated production was here to stay.
But over time, the agencies’ solidarity collapsed. One by one they agreed to phase out packaging fees over the course of two years, and to forswear any ownership of a production company greater than 20%. That was easier for a lot of them to do, as they did not own any production companies.
Creative Artists Agency signed its agreement last week, pledging to give up all but 20% of Wiip, a company with just a handful of projects. That leaves WME as the last agency without a deal, and with an imperative to get one as soon as possible.
At the hearing, WME attorney Jeffrey Kessler argued that the guild’s boycott has been illegal all along, and said it should come to an end. If Birotte were to grant an injunction, it would create an odd situation where WME was the only agency allowed to represent writers while also owning a production company outright and being able to collect packaging fees indefinitely. It would also, seemingly, remove any urgency WME might feel about giving those things up.
“Members of the Writers Guild would be free to make a choice,” Kessler argued. “If they want to go to CAA or one of the franchised agents, they could do that. If they still wanted to go to WME, despite the fact that we have an affiliate we cannot get rid of in a blink of an eye, they could do that.”
Kessler said he hoped that the two sides would reach a settlement.
“If we didn’t settle, our business representing writers wouldn’t be destroyed in the interim, preventing us from getting our day in court,” he argued.
Without a settlement, the two sides would go to a trial — probably sometime in 2022 — to decide whether the guild’s boycott had been illegal. If WME were to win, then nothing would change. If the WGA were to win, it could then reimpose the boycott, putting the whole dispute back where it is now.
Birotte seemed wary of that whole scenario, which would involve endless proceedings and compounding legal fees. What he really wants is for the parties to come to an agreement sooner rather than later and get out of his court. He also seemed to take seriously the idea that he couldn’t order an injunction even if he wanted to, as federal law bars judges from intervening to break non-violent strikes.
Birotte has no power to decide what the terms of a deal should be, but he urged the WGA to be reasonable and not assume that Endeavor Content can be offloaded as quickly as Wiip can.
“Endeavor is a bigger fish, I get that,” Birotte said.
But unless he is willing to issue an injunction, all he can do is coax and cajole.
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