Hollywood writers fire agents over financial disputes


LIZ: TO HOLLYWOOD. WE WARNED YOU LAST FRIDAY THIS COULD HAPPEN, AND IT DID. ONE MINUTE AFTER MIDNIGHT ON SATURDAY, HOLLYWOOD WRITERS BEGAN FIRING THEIR AGENTS BY THE HUNDREDS. THIS AFTER A NEW CODE OF CONDUCT DEAL COULD NOT BE REACHED BETWEEN THE WRITERS GUILD OF AMERICA AND THE ASSOCIATION OF TALENT AGENTS WHICH REPRESENTS SOME 1,000 AGENCIES, INCLUDING THE BIG FOUR, CAA, ICM, WME. AT ISSUE, PACKAGING FEES. WRITERS SAY THEIR AGENTS ARE FAVORING MORE LUCRATIVE PACKAGING DEALS WITH STUDIOS AND IN TURN, COLLECTING HUGE SUMS OF MONEY FROM STUDIOS FOR THEIR CLIENTS’ PROJECTS INSTEAD OF SHARING THE PROCEEDS WITH THE CLIENTS. TWITTER WAS SET ABLAZE OVER THE WEEKEND WITH A FLURRY OF WRITERS WHO WERE FIRING THEIR AGENTS. PATTON OSWALT TWEETING I HAVE AN AMAZE AMAING AGENCIES WHICH REPS ME BEE AN EVEN BETTER GUILD THAT STANDS FOR ME. ANDY RICHTER QUOTING I’M ONE OF THOSE WEIRDOS THAT REALLY LIKES HIS AGENT BUT I WENT AHEAD AND DID THIS ANYWAY BECAUSE FAIR IS FAIR. THIS WHOLE BATTLE WAS TELEGRAPHED FOUR YEARS AGO IN ONE ARTICLE THAT’S GONE VIRAL IN HOLLYWOOD, WRITTEN BY AGENT TURNED PRODUCER GAVIN POLONE ENTITLED GAVIN POLONE ON TV’S DIRTY SECRET, YOUR AGENT GETS MONEY FOR NOTHING. THE EXECUTIVE PRODUCER OF “CURB YOUR ENTHUSIASM” AND “GILMORE GIRLS” ONCE A PARTNER AT WTA WHICH REPPED ALL THE SEINFELD WRITERS, QUOTE, IN MANY CASES THE TOTAL PAYMENTS TO THE AGENCY, GAVIN WRITES, ARE MORE THAN WHAT THE AGENCY’S CLIENTS, WHOSE BACK IT WAS LEVERAGED UPON, MAKES ON THE SHOW. LET HIM SAY THAT AGAIN. THE AGENCY MAKES MORE THAN ITS CLIENT. THE HOLLYWOOD WHISTLEBLOWER, GAVIN PALONE, JOINING US NOW IN A FOX BUSINESS EXCLUSIVE. GOOD TO SEE YOU. FIRST TO THE IMMEDIATE SITUATION. THE AGENTS LAST FRIDAY WARNED OF TOTAL CHAOS IF WRITERS WENT THROUGH WITH IT. ARE WE SEEING CHAOS, DOGS AND CATS LIVING TOGETHER? WHAT’S GOING ON THERE?>>THERE’S NO CHAOS. THERE’S NOT GOING TO BE ANY CHAOS. THIS IS ALL JUST A MARKETING PLOY ON BEHALF OF THE AGENCIES BY THEIR ASSOCIATION TO FRIGHTEN THE WRITERS INTO ACQUIESCING TO THEIR DEMANDS OR AT LEAST BACKING OFF THE DEMANDS OF THE WGA. LIZ: HOW SERIOUS ARE THE WRITERS HERE? WHAT WE’RE LOOKING AT IS THIS VIRAL TERMINATION OF PRESENTATION LETTER THAT WRITERS GOT AND THEY COULD SIMPLY PUT THEIR AGENCY IN THE DEAR COLUMN, THEN SAY EFFECTIVE APRIL 13th, YOU’RE DONE. WE KNOW HUGE NAMES LIKE SHONDA RIMES FIRED THEIR AGENTS THIS WEEKEND BUT IN A NUTSHELL, WHY ARE THEY THROWING DOWN THE GAUNTLET?>>WELL, THEY HAVE A REAL CLAIM AGAINST THE AGENCIES. ULTIMATELY, ANYBODY WHO IS NEGOTIATING FOR ANYTHING WANTS UNCONFLICTED REPRESENTATION. YOU, LIZ, PROBABLY USE AN OUTSIDE LAWYER WHEN YOU ARE NEGOTIATING YOUR CONTRACT WITH FOX, NOT SOMEBODY WHO WORKS FOR YOUR BOSS. THE AGENCIES ARE GETTING DIRECT PAYMENTS FROM THE STUDIOS AND THAT CREATES A CONFLICT, AND FURTHER, AND MORE IMPORTANTLY, THE AGENCIES ARE TRYING TO SET UP THEIR OWN STUDIOS AND HAVE, AND THEY ARE STARTING TO PRODUCE ENTERTAINMENT AND HIRE THEIR OWN WRITERS. SO THEN THERE’S NOBODY IN BETWEEN THEIR REPRESENTATIVES AND THE STUDIO TO MAKE A FAIR DEAL, AND THIS IS PROBABLY PART OF THE REASON WHY WRITER SALARIES HAVE REMAINED STAGNANT FOR AT LEAST TEN YEARS WHILE THE DEMAND FOR WRITERS IS PROBABLY INCREASED BY FOUR TIMES. LIZ: YEAH, BECAUSE YOU NOW HAVE AMAZON AND NETFLIX AND THEY ARE DOING CONTENT. SO THE OBJECTIVE FOR THE WGA, THEY DON’T WANT THIS CONFLICT OF INTEREST ANYMORE, YET THE AGENTS DON’T WANT TO GIVE UP THAT TROUGH OF MONEY. SO AGENTS –>>THEY CAN’T, REALLY. LIZ: GO AHEAD.>>YOU GOT TO ALSO UNDERSTAND THAT THE BIG AGENCIES, THEY CONTROL ALMOST ALL OF THE PACKAGES, HAVE STARTED SELLING THEMSELVES TO PRIVATE EQUITY AND HAVE A GOAL OF EVENTUALLY PROBABLY GOING PUBLIC, AND THAT’S ALL BASED ON THE IDEA THAT THEY CONTROL REVENUE STREAMS AND THAT THESE REVENUE STREAMS ARE GOING TO INCREASE AND THE WAY IT’S GOING TO INCREASE IS THEY ARE GOING TO USE THEIR CLIENT RELATIONSHIPS TO OWN PRODUCT, TO PRODUCE, FINANCE AND ACTUALLY OWN THE PRODUCT AND THAT’S HOW THEY ARE GOING TO GET A BIGGER MULTIPLE, SO THEY CAN’T BACK DOWN ON THESE ISSUES. LIZ: THEY OFFER THE COUNTER PROFESSIONALS, LET ME SAY THIS TO BE FAIR AND BALANCED, THE WTA OFFERED A COUNTER PROPOSAL OFFERING THE WRITERS, DID I GET THIS RIGHT, 80% OF ONE PERCENTAGE POINT OF THEIR PROFITS FROM PACKAGING FEES FOR A TV SERIES AND SOMEBODY SAID THAT WORKED OUT TO LESS THAN A PENNY ON EVERY DOLLAR OF THE WRITERS’ BACK END THAT AGENTS ARE GETTING? IS THAT A NONSTARTER?>>WELL, IT SHOULD BE A NONSTARTER BECAUSE YOU HAVE TO LOOK AT THE ISSUE IN TOTAL. IT’S ABOUT A CONFLICT OF INTEREST. SO THEY ARE SAYING WE WILL GIVE YOU A LITTLE BIT OF KICKBACK ON THE PACKAGE FEES WHICH ARE ALREADY DIMINISHED BECAUSE OF THE NATURE OF THE BUSINESS WITH STREAMING SERVICES NOT PAYING PROFITS TO ANYBODY ANYMORE. SO THEREFORE, THEY ARE TRYING TO SAY WE ARE GOING TO GIVE YOU THIS AND LET’S MAKE THE WHOLE ISSUE GO AWAY, AND NOT GIVING IN ANYTHING ON THE IDEA THAT THESE TALENT AGENCIES CAN BECOME STUDIOS WHICH IS THE BIG CONFLICT OF INTEREST AND WHERE THE REAL MONEY IS GOING TO BE GOING FORWARD. LIZ: WELL, WE KNOW THIS. WME IS VERY INTERESTED IN LAUNCHING AN IPO VERY SOON. THEY PROBABLY ALL ARE. I KNOW ICM USED TO BE PUBLIC. ARI EMANUEL, THE FAMED AGENT, ARE THEY HURTING RIGHT NOW? DO WRITERS REALLY HOLD THE KEYS AND THE POWER RIGHT NOW? COULD THIS AFFECT THEIR ABILITY TO TAKE IT PUBLIC?>>IN THE SHORT RUN, IT PROBABLY WON’T. THE THING IS, IT’S NOT — THE WGI DO BELIEVE IT’S GOING ABOUT IT THE WRONG WAY. I THINK THEY ARE RIGHT IN THEIR CLAIMS, FOR SURE, 100%, BUT THERE ARE SMARTER WAYS OF GOING ABOUT IT BY NOT PUTTING IT ON THE INDIVIDUAL CLIENTS TO HAVE TO FIRE THEIR AGENTS AND ULTIMATELY, EVEN THOUGH THEY ARE SORT OF SEPARATING FROM THEIR AGENTS, THEY ARE NOT GOING AND TAKING NEW AGENTS WHICH WOULD MAKE WME UPTIGHT BECAUSE THEN THEY WOULD REALLY BE LOSING BUSINESS. AS THINGS GO ON, YOU KNOW, THAT MIGHT BECOME WORSE, BUT MOST PEOPLE MAKE DEALS FAR IN ADVANCE SO THE AGENTS CONTINUE COLLECTING ON THE DEALS THAT HAVE BEEN MADE IN THE PAST SO IF THIS DOESN’T LAST VERY LONG, THEY WILL PROBABLY BE OKAY. I THINK THAT THE SMARTER MOVE FOR THE WGA WOULD HAVE BEEN TO GO TO COURT ON BEHALF OF THEIR MEMBERS. GO TO COURT ON BEHALF OF THEIR MEMBERS BECAUSE THERE IS A FAIR BUSINESS STATUTE IN THE STATE OF CALIFORNIA AND THERE’S THE SHERMAN ANTITRUST ACT. IT WOULD SEEM TO ME AND MANY OTHER LAWYERS WHO HAVE COME FORWARD AND SAID THIS THAT THEY ARE IN VIOLATION OF THOSE STATUTES, AND IN A LAWSUIT, IF YOU STARTED TO OPEN UP IN DISCOVERY THE E-MAILS OF THE TALENT AGENCIES AND SEE HOW THEY REFER TO THE PACKAGE FEES AND WHAT THEIR STRATEGIES ARE, I THINK IT WOULD BE VERY UGLY FOR THEM AND THEY WOULD PROBABLY HAVE TO SETTLE BEFOREHAND. IT’S GOING TO TAKE A SMARTER STRATEGY AND BIGGER POWER MOVE THAN JUST SAYING OKAY, YOU’RE NOT MY AGENT RIGHT NOW ALTHOUGH I’M NOT GOING TO ANOTHER AGENCY, AND ALLOW THE AGENCIES TO CONTINUE TO COLLECT COMMISSIONS FOR THE SHORT RUN. I DON’T THINK THAT’S GOING TO GET IT DONE. LIZ: IT MIGHT COME TO THAT. MIGHT COME TO THAT. GAVIN POLONE, MY HIGH SCHOOL, AW I WENT TO HIGH SCHOOL AND COLLEGE WITH HIM.

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