“The Writers Guild of America sued the entertainment industry’s four biggest talent agencies Wednesday in the latest and boldest move in an increasingly bitter and protracted fight between the two sides over the way Hollywood does business,” the AP reports. “The lawsuit filed in Los Angeles Superior Court claims that agents’ use of so-called packaging fees is illegal under California law because they pose ‘numerous conflicts of interest between writers and the agencies serving as their agents.’”
The report notes: “Packaging fees mean agents combine elements of a television series, including writers, scripts or actors, and sell them directly to studios as a unit rather than taking commission from each. It can mean massive payouts for agents from successful shows, sometimes more than those who directly work on them receive.”
The practice has long been common in Hollywood, but writers are now refusing to put up with it, and the issue has brought negotiations between agents and writers to a half.
The AP quotes the lawsuit stating: “The packaging fees paid by production companies to the agencies are unrelated to their own clients’ compensation and generate hundreds of millions of dollars in revenue for the agencies each year. Rather than seeking to maximize how much writers are paid for their work, the agencies seek to maximize the packaging fee they will be paid for a particular project.”
The suit adds: “Indeed, agencies actually have a disincentive to advocate for greater pay for their clients, because the agencies’ share of profits would be at risk of being reduced.”
The agencies named as defendants in the suit are those known as the “Big Four”: William Morris Endeavor Entertainment, Creative Artists Agency, United Talent Agents and ICM Partners.