Judge To Writers Guild: No, Agents Aren't Like The Mob
In what sounds like a punchline to a Hollywood joke, talent agents are not, in fact, running an organized mafia-esque criminal enterprise.
That's according to yesterday's ruling by a federal judge in a closely watched case between the Writers Guild of America and three of the industry's biggest talent representatives — CAA, WME and UTA. Last year, the screenwriting guild sued the agencies over so-called packaging fees — the money agencies collect as a percentage of a show's profits.
Agents typically collect a percentage of a client's income as commission. The WGA maintains that packaging fees represent an illegal conflict of interest, because an agency would be motivated to minimize production costs (including their own clients' wages) to boost their packaging fee proceeds.
But U.S. District Court Judge André Birotte on Monday dismissed eight of the WGA's 14 claims, including the guild's charge that talent agents were engaged in kickbacks and racketeering as defined by a federal law, known as RICO, that was created to prosecute organized crime operations.
The agents claimed victory in a statement, but the WGA said it will move forward with the remaining aspects of the lawsuit and request documents backing its assertion of wage suppression.
While the case preceded the global pandemic, the litigation is unfolding at a critical time for agencies, which have been cutting staff and slashing compensation in recent weeks.
Thousands of WGA members fired their representatives last year as part of the dispute, cutting off the commissions agents would normally make from screenwriters, many of whom are still working while the rest of the business remains shut down.
A financial services company on Monday downgraded the credit rating of WME, in part because the agency made huge investments in live events like beauty pageants, bull riding and mixed martial arts.
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