Agency Campaign Update (Text Only)

May 1, 2019

Fellow members of the WGA, East and West—what you are watching now is the first in a series of videos that the Guild will produce throughout the agency campaign to speak directly to you about issues, questions that arise over the course of the struggle.

Today, because we’ve entered a new phase of this campaign after implementing the Code and terminating agencies that have refused to sign, I want to talk to you about where we are, how we got here and where I think we’re going. I apologize if some of this you already know. What we’re doing, though it’s a practical battle over the structure and economics of the system—a fight, in the end, for better writer pay—it is also an emotional thing. In some ways, even more than our MBA battles, dealing with our agents is an emotional thing. And we need to acknowledge that. We need to remind ourselves, periodically—it’s okay to need to be re-reminded—why we are doing this.

You and I—you and your Guild—started this fight a long time ago—long before the agency campaign began. Nearly a decade ago, as the business started to boom in a way that we had never seen before. It became clear that though we were making some steady progress in negotiations with companies—increasing minimums, protecting health and pension—something was going very wrong for writers. Overscale pay was going down in both TV and features and conditions for writers overall were deteriorating.

What we began to understand was that things that were the province of our agents to protect were going unprotected.

We got our first hint of that in the early years of this decade when we tried to enlist agencies to become our partners in combating free work and late pay for screenwriters. You may know this story. We asked them—and they agreed—to send us every invoice so that the Guild could enforce timely pay. And then, one by one, every single agency reneged on that agreement.

And so the Guild began to address in our MBA– where we could—those protections of writers that were, traditionally, the agencies’ job.

In 2014, we negotiated limitations on egregious options and exclusivity clauses in writers’ contracts that the agencies had permitted to grow increasingly onerous.

In 2017, we negotiated limitation on writer span that, left alone—as the agencies were doing—would have driven nearly every TV writer working on short orders to Guild minimum.

Even still, writer pay was going down. It was in steep decline—despite a booming industry. Because the agencies were failing to defend our overscale quotes.

I don’t know how many of you read what Krista Vernoff wrote about Grey’s Anatomy—perhaps the most successful drama of this era—where Supervising Producers today make less than Supervising Producers did fifteen years ago. Not on a short-order show. But on a hugely profitable network show in which every item of the budget is going up, except the line item our agents negotiate.

And so—after the 2017 MBA– we turned our attention to agencies’ conflicts of interest—those practices that allowed the agencies to become increasingly, overwhelmingly profitable by entirely divorcing their economic success from the success of the clients they were legally, contractually, ethically obligated to defend.

You know that story.

And the question we asked ourselves was—why were the studios permitting this? Why were the studios—who will not give one penny away without being forced to do so—agreeing to pay our commissions for us? And more than that—a piece of their profits? What were they getting in return?

Two answers. Both true at the same time.

They were paying for access to us, which the agencies were withholding, unless they were paid for it. That’s what CBS found out, some years ago, when they tried to buck the system.

And second, they were paying for the agencies to become passive participants in the steady downward pressure on labor costs.

Yes, some agents with powerful clients can do better. And even some agents of rank and file members push back around the edges to get an extra thousand, here and there. But the numbers don’t lie.

The studios pay the agencies for access to cheaper talent. And we don’t even know how much they are paying, because the agencies refuse to this day to share that information with us. They would rather have this war with us than tell us the truth about what we’re worth to them.

And so we had no choice but to fight back—against packaging fees and against the looming threat of affiliated studios, where our representatives are also our bosses.

This is the truth about the big four agencies: they do not, by-and-large, function the way we think of agencies functioning. They are not in the individual client service business—not for most of us. They are, instead, like mega-pods. At this point, they are non-writing executive producers on every television show that is made. They don’t announce themselves as that. But that’s what they are. They attach themselves to every show through the access point of their package-able element, usually us. Then they take a fee on every episode and a large piece of the backend. Their client lists are just a cost of doing business—a list of people who are—or who may someday—create a show on which they can be a producer.

The affiliated studios are, if anything, more pernicious. Though some of us make good deals with them, that is not the point. They could instead make those good deals with us as independent studios. The agencies have created studios because they believe they will be more profitable than the traditional agency business itself. It is profits that drive priorities. And so between studios, whose imperative it is to lower costs—and agencies, whose imperative it is supposed to be to increase the cost of labor—who do you think wins out in the end? And when the agencies are beholden to private equity or to shareholders—all of whom demand return on investment and care not a bit about how much employees are paid—and we would be employees of the studios—who do you think wins out in the end? Investors or writers?

We are not immune from the basic laws of economics. And no promise of good care by our agents changes that. They work for themselves and their investors first—and for us second.

And so after meetings with thousands of writers, we said, enough, and gave the agencies a year’s notice.

And they expressed shock. We have always been your best allies, they said. The studios are your enemies.

But when you are locked in a battle for your economic lives—as writers are—with the studios. And when it turns out that the people that supply you with your sword and your shield are paid for by the other side—then you have a real problem—with both your adversaries and your friends.

They said, but you’ve been okay with packaging for over forty years, you agreed to it—you can’t object to it now.

And we say, no. We never agreed. We tried to end it in 1976. We didn’t have the power. And so we “agreed to disagree.” That’s the language in the AMBA. SAG tried to hold the line against producing in 2001, and failed. None of this is evidence of agreement. It is evidence of duress. And anyway—there is no statute of limitations here. The duration of a conflicted practice does not make it more right, it makes it more wrong.

They said, but packaging is good for you. You want access to other talent that we can give you.

And we say, we will pay you 10% of everything we make including back end to introduce us to each other. That is your job as agents—your basic job. And what’s more—we have a right to work with each other. The fact that agencies put up obstacles to us working with each other, with directors and actors is one of the most egregious aspects of packaging fees.

There are no borders here. We are not citizens of our respective agencies. The agencies build walls between us and then tell us it is for our benefit. What is it with walls?

They spread rumors that this battle is for the benefit of wealthy writers at the expense of the rank and file.

And that is not true. What we have done has been, principally, for our rank and file members. Our victories on options and exclusivity and on span all came with salary caps. And the income that is most at risk in this system—the 23% decline—is not the income of our top earners. It is the salaries of our middle class. If we feature our prominent members in this battle, it is because those are the writers the agencies care about and care about losing. That may be distressing. But we have to deal with their appetites, with their priorities. And they know it. The agencies won’t succeed in dividing us by talking about class. We are one Guild.

They say there will be chaos.

And we say, not if we can help it. Though we know they will try to sow chaos and fear.

And I say, though I am afraid of chaos—I am also afraid of quiet, peaceful, orderly acceptance of a stable system that quietly, peacefully siphons money from writers’ pockets.

Here is the fundamental truth:

A fiduciary obligation is not a maybe thing. You can’t take it or leave it. If you are legally obligated to defend my interest first and foremost, you cannot, with any explanation, defend the fact that you make side deals with those people you are charged with defending me against.

That seems so obvious on its face. And the fact that this twisted relationship sometimes works out for some writers does not matter. You can’t do a wrong thing and then defend it by saying, sometimes it’s not so bad in the end.

Of course, none of this is denies the very important, sometimes career-changing work that our individual agents have done for many of us—or the deep, personal, sometimes lifelong relationships we have developed with some of them. But why should that come with a surcharge? With an asterisk?

Why should even the very best of our agents be able to hide behind our friendships—our mutual successes—and refuse to account for the responsibility they have to treat us ethically?

So… this is where we are. And so we had no choice.

We discussed, debated, met, planned, and voted by 95.3% to impose a code of conduct, if there was no deal by deadline. The margin of the vote was not predictable a year ago, or even two months ago. It was aided by the agencies themselves as they tried-and failed-to justify packaging and producing.

Let me say a word about our 95.3% vote.

It was overwhelming. But it was not unanimous. Unanimity was never possible. There are thousands upon thousands of us. It was always okay—it was inevitable—for people to vote no.

So long as everyone who is part of this union abides by Guild rules, which is our obligation, the exercise of our right to disagree during internal debate about tactics and strategy is completely okay.

So, let’s disagree with each other, but respect each other. Our battle- even for those who would prefer there not be one- is with the agencies—not with ourselves.

And then—a little over a week ago—we gave our agents notice. And that was tough. Suspending long, personal relationships, even if it is the right thing to do, is also an emotional thing. Like signing divorce papers even after you’ve agreed to be separated. And because we are writers, we tended to take the full burden of this on ourselves. The truth is—our agents walked away from us, when they refused to sign the Code. Now, that is semantics, but it also is not.

Why should the question be—agent to writer—how could you leave me? The question is writer to agent—how could you make your conflict a precondition of my staying?

Our agencies have shown that their loyalty is not to us, but to a system of compensation. Though the agency decision makers allowed our incomes to drop by 23% in two years alone without a fight and claimed, that’s just how it is, market forces out of our control, they will be guaranteed their income and their lifestyle or they will take their ball and go home.

They do not seem to get it. But then, as Upton Sinclair said, “It is difficult to make a man understand a thing, when his livelihood depends on him not understanding it.”

And so, they have not put any offer on the table that addresses our fundamental demand that they realign their financial interests with ours.

Their proposal, made right before the second deadline, of nothing on affiliated studios—and less than a penny on the dollar on packaging—is not an offer. Their refusal to provide basic contract information—so that the Guild can defend against the outrage of free work in features—is not an offer. It is a snub. It is an attempt to divide us—not to craft a solution to a real problem.

If you put your house on the market for a million dollars and a buyer offered you eight thousand dollars for it, you would not counter.

We will not counter. We will not be bullied—not by them—not by anyone who insists that we prove, again and again, that we are open to compromise—into negotiating with ourselves.

So what are we doing—to force agencies to realize that in order to represent writers again they need to align their interests with ours?

We have, all of us, at once, as an entire Guild, by suspending our relationship with the agencies, denied them the money they would make from our future deals. The running total of their lost income increases every day. It will take time for that to be felt. It will happen faster at smaller agencies. But even the Big Four agencies now have entire departments of agents with little to do.

We will proceed with our civil lawsuit. That too may take time. And it is not, as some have suggested, a strategy that replaces our offer to negotiate. It is a complementary strategy. By increasing the cost to the agencies of refusing to address their conflicts we also increase the pressure on them to sign the Code or return to the table.

We will continue to inform equity investors in WME, CAA and UTA—as well as the public pension plans invested in their funds –of the real risks to the income stream the agencies have promised—as well as civil, if not criminal, liability here. Because this we also know, with virtual certainty: somewhere in the conversation between our agencies and those venture capitalists was the promise—and the record of a promise—that they had unique access to our talent and that they could funnel us into projects on which they were either studios or producers. Now we are calling into question who works for whom and whether the agencies misrepresented their role in the system.

That is what the Guild is doing. What can you do?

First and foremost, every member must continue to abide by Working Rule 23 and refuse representation unless their agency is signed to the Code of Conduct. Second, join all the writers helping other writers and use the tools and resources the Guild is coordinating, links that can be found on the website.

Also we’ll need you to be patient. This is a new battle. We’ll continue to figure out how to work without agents during this period of time. It will require new strategies and the invention of new resources. That, too—as in any conflict—takes time. What the Guild needs from you is your help and guidance—and sometimes your forbearance. And a united front.

This is a kind of war. And we are in something akin to rationing. That can be frustrating. It is frustrating—and scary. I would ask you to make the best of it and not the worst—not to let your frustration and your fear be a weapon that can be used against us. If you have a problem—let the Guild know. Let the Guild help.

Be wary—of rumors and the spread of attacks that are meant to divide us. Rumors of chaos and fear are our greatest enemies. It is the agencies’ best tactic to make you believe that you cannot survive without them. It is our job to prove that we can—at least long enough to force them to decide whether they want to continue to represent writers. Ultimately they need us. Remember, the business stands still unless we write. That is our power. The studios and networks have billions of dollars—in television and film—riding on their ability to find us and us to find them. Agents—though they may threaten—are not the essential ingredient in entertainment. We—in collaboration with directors and actors and producers—are.

We know that all of you want this to end as soon as possible. We on the negotiating committee and the Board and Council—all of your captains—we would like this to end soon too.

But speed can’t be the objective. We have things we need to accomplish here –big things—changes in an entrenched and fundamentally broken system. And that does not happen without some time and without some pain. Change is not free. And so—to go along with the resolve this Guild’s membership has shown—the willingness to vote in support of the Code and the bravery to walk from our agencies—now must come the bravery to withstand our doubt and anxiety, to show that we have the stomach for this. We need to be tough in the face of uncertainty. Because although we know so clearly what our goals are, we cannot know—it is impossible to know—precisely when this will end, or exactly how.

Remember, they have anxiety and stress too. And all of this that we are doing—the firing, the lawsuit, the messaging, the getting along without them—it is also negotiating. We are negotiating today—away from the table—showing our power.

We have the power. We have the cause. If we have the will, then we will win the day.

Thank you for listening.

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