What you need to know about the fight between Hollywood writers and their agents

You’re fired! That’s what Hollywood scribes recently told the people who are supposed to find them work. Tensions between writers and their agents have been building for years and have finally boiled over. The conflict has pitted the Writers Guild of America, which has about 13,000 members, against the Assn. of Talent Agents, a trade group that represents the talent agencies. Here are some answers on what’s behind Hollywood’s strange and ugly family feud:

Aren’t writers and agents supposed be on the same side?

Yes, they are. Agents help writers find work, providing the vital link that connects a writer’s script with potential buyers, usually studios and producers. For their services, agents typically charge the writer a commission of 10%. This is a system that is almost as old as Hollywood itself.

So why are they at war?

Like most break-ups, it’s complicated. Writers feel that their agents have been unfairly enriching themselves from their hard work. They feel agents are no longer looking out for their best interests and instead are seeking new sources of income that aren’t connected to traditional client representation. Specifically, the WGA is enforcing a new agency code of conduct to replace a 43-year-old agreement, and agencies say it threatens their business.

What’s all this stuff about packaging fees?

Packaging fees are one of the main reasons the two sides are fighting. Essentially, this is money that talent agencies earn for putting together a deal, instead of collecting the usual 10% commission. The fees have been around for decades, but have grown bigger as agencies have become more heavily involved in production of films and TV shows. Writers maintain that these fees — which can be as much as $75,000 per episode on a single TV series — mean there is less money on the table for them and incentivize agents to put their own financial interests before their clients.

Things got so heated, the WGA sued the four main talent agencies, alleging that they are violating state and federal laws, including the anti-kickback provision of the Taft-Hartley Act. Agencies have countered that writers benefit when shows are successfully packaged, in part because they get better jobs and don’t have to pay the 10% commission. The Assn. of Talent Agents has said the guild has “agreed to the legitimacy of packaging for more than 43 years” and accused the union of misleading its members.

Writers Guild vs. talent agencies »

What happens now that agents are being fired?

The WGA has told its members to can their agents and instead hire attorneys and managers to represent them. The guild has said more than 90% of writers who signed their names to a statement of support for ending packaging fees have sent form letters terminating their agents. That may sound straightforward, but it isn’t. That’s because the California Talent Agencies Act bars anyone who isn’t a licensed agent from procuring or negotiating employment for writers and other entertainment industry workers.

What’s the fallout?

That too is a matter of some disagreement. Agencies have said the mass firing will lead to “chaos.” That may be an exaggeration, but they have a point. Agents do indeed help to grease the wheels of Hollywood production. If writers have to find others to represent them, that could could cause delays in the pipeline of future TV shows and movies. Some analysts think newer writers could have a tougher time finding work and that agencies may eventually be forced to layoff workers.

How will this all end?

Since this has never happened before, no one really knows. Both sides have an incentive to end the fight, but they remain far apart. Agencies have made some concessions but aren’t about to abandon packaging fees that have been lucrative for them, especially when the industry is facing such upheaval. And writers, who’ve seen their incomes erode in recent years, seem largely unified and don’t appear to be ready to walk back their demands. Powerful filmmakers and writers such as J.J. Abrams, Tina Fey, Damon Lindelof and Oscar-nominated playwright Tony Kushner have backed the union.

Your honor...

Like most fights, this one is headed to court. The WGA is seeking an injunction from the court to prevent agencies from collecting packaging fees, as well as damages and repayments from fees that the union contends were illegally obtained. Meanwhile, attorneys for the ATA have threatened to file a lawsuit of their own against the WGA, saying the union’s plan to have managers and attorneys assume some of the responsibilities of agents would violate both California and New York law.

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@DavidNgLAT