CAA In Deal With WGA To End Screenwriter Stalemate: Read The Internal Email

by Mike Fleming Jr., Nellie Andreeva
Deadline
September 14, 2020

EXCLUSIVE: Deadline is hearing that CAA has reached agreement with the WGA that will end its stalemate and allow writers to return to the fold. They are down to a few final signatures, but sources said an internal announcement made it sound imminent, while acknowledging that the agency send WGA some terms on the affiliated production company clause it hopes passes muster with WGA.

This would end a protracted stalemate over packaging and affiliated production company ownership that prompted the WGA to demand that its membership fire their agents. Such a development was expected to happen sometime this fall, and it leaves WME the lone holdout at this point, though there have been plenty of rumors that agency will also be signing on the dotted line.

Half of the members of The Big Four — UTA and ICM Partners — already signed with the WGA and all of the agencies sign on to favored nations terms. The main points are similar, and CAA said it essentially agreed to the terms that ICM Partners did, and those are the same as the ones UTA agreed to before that. And others agencies, from Verve to Paradigm, Gersh and others, will be essentially the same. For most in the industry who are beleaguered by the pandemic and every other woe, this and the prospect of a WME deal to soon follow, which bring relief to an industry that badly needs it.

CAA will have some things to work out, as it has the affiliated production company wiip. CAA addressed this in an internal memo, and it made it sound like there was a point or two that still need ironing out. And there is that countersuit that CAA and WME were waging against the WGA, which was pushed till next summer. It seems likely that litigation will go away once the remaining big agencies reach final agreement with WGA.

Per the memo, “there is one change we have provided that we think the WGA will be able to agree to. With regard to our investment in the affiliated production company, wiip, we are providing for a commercially practical time to come into compliance with the 20% ownership limitation contained in the agreement. We are unequivocally committed to achieving compliance.On the issue of agency involvement in film financing, we would like to understand the concerns the WGA has around our and others’ work in this vital area for all our clients, our business, and the industry, and what the WGA’s process is in respect to the raising of financing for movies with budgets over $50 million. In the past five years, CAA has secured financing and built critical partnerships for over 300 filmed projects, ensuring they would be made, distributed and marketed.”

In the ongoing talks with WME, that agency will face the same challenge with Endeavor Content. WME years ago incubated Media Rights Capital and spun that company off while keeping a minority stake. Presumably, something similar will happen with both Endeavor Content and CAA’s wiip.

Here is the internal announcement today from CAA:

Today, we signed the same deal the WGA made with ICM several weeks ago. We delivered the signed agreement to the WGA, and we assume that it will be circulated to the appropriate members of the negotiating committee, as well as the membership, shortly.

There is one change we have provided that we think the WGA will be able to agree to. With regard to our investment in the affiliated production company, wiip, we are providing for a commercially practical time to come into compliance with the 20% ownership limitation contained in the agreement. We are unequivocally committed to achieving compliance. On the issue of agency involvement in film financing, we would like to understand the concerns the WGA has around our and others’ work in this vital area for all our clients, our business, and the industry, and what the WGA’s process is in respect to the raising of financing for movies with budgets over $50 million. In the past five years, CAA has secured financing and built critical partnerships for over 300 filmed projects, ensuring they would be made, distributed and marketed.

As a result, countless writers’ work has been produced and thousands of jobs have been created. We want to ensure that any future process does not cause lost opportunities for the WGA’s own members and the entire industry. But to be clear, in order to expedite this agreement, we accept its current wording regarding film financing and will work with the Guild to figure out what’s best for continuing to get such films made.The fact that CAA and the WGA couldn’t resolve the broader dispute in a better way caused personal and professional damage to many relationships and cost millions of dollars to the Guild and the agencies. Countless opportunities were lost for so many people. While litigation is never our desired business strategy, we hoped in this case that it would provide a court’s relatively prompt direction as to the disagreements with the WGA.

Unfortunately, a pandemic eliminated the possibility of a prompt day in court. We respect and recognize the great need for guilds and unions in our industry to look after the best interests of their members. We have worked side-by-side with the WGA throughout our company’s 45 years of existence. The affiliated companies that agencies have sponsored have complied with any applicable requirements of the WGA. The guilds acknowledged the validity of packaging for decades. Writers always had the choice to participate in packages or not.Our company works with writers, actors, directors, and producers in the television/streaming and motion picture mediums.

Many of these artists do multiple jobs in each respective field. The majority of our clients are members of the WGA, SAG/AFTRA, the DGA and many other associations and guilds. We have an ethical and fiduciary duty to all of these clients. We restate our commitment to that responsibility and to collaborating successfully with the guilds in which our clients are members. There is obviously a lot of good that can come from simply committing to talk to each other regularly and with a common purpose. We want that.We are asking the WGA, even outside the terms of the franchise agreement, to formalize communication with our company on a quarterly basis going forward. The leaders of CAA will commit to organizing and participating in regular meetings with this guild and all guilds interested in doing so. We suggest these meetings begin as soon as the Guild is available to do so.The meetings can bring to light specific and real-time problems between the agencies and the Guild. We suggest sharing information on a regular basis with each other about current deal trends, as new information emerges constantly in this new dynamic.

We offer help in preparing for future negotiations with the AMPTP and other emerging companies that will employ writers in the U.S. and around the world. As media platforms expand globally, the importance of all local content is obvious. How this guild and all guilds interact with those creators and those markets will determine the amount of leverage they maintain with the global media companiesas we move forward. On February 21, 2020, the federal judge ruling over our case appointed a very well-respected federal mediator that the Guild approved, named Gail Title. Some six months ago, she reached out to the Guild and CAA to commence the mediation. While CAA immediately agreed to participate, the Guild did not, and the mediation never occurred.Time will tell if the deal the agency community has agreed to with the WGA will be good for the Guild, writers, other artists, our companies, and the community. What was never in dispute was that solid reforms the Guild sought were worthy of consideration. However, good and solid reform in any relationship requires dialogue and factual information with agreed-upon assumptions from the parties involved. Unfortunately, that dialogue has not occurred to date between our agency and the WGA.

With a new commitment to engagement, we are hopeful that we will be able to avoid this destructive dynamic in the future.If there are any outstanding issues going forward, Ron Olson and Anjan Choudhury of Munger, Tolles & Olson will join our litigation counsel, Richard Kendall of Kendall, Brill & Kelly, as our representatives. Finally, throughout this disagreement, agents and agencies, large and small, have been demonized and vilified. It’s too bad that some representatives of the WGA felt that was necessary. We do not accept those generalizations. There are many great agents across the industry who have chosen careers as writers’ representatives. They love writers and take their jobs seriously.Thank you to the many Guild members who attempted to help resolve this issue while maintaining professional relationships and friendships throughout. Thank you to Karen Stuart and the Association of Talent Agents for the great service it provides agencies of all sizes. We are very proud of our company, the clients we work for, and the lives we have chosen. We love the work and trying to make good things happen for our clients and the community. We are going to continue to do that and will always try to do it better. By signing this agreement, we hope to begin immediately a new relationship with the Guild and its leadership. We want to resume representing the writers who choose to be our clients.

We are attempting to get feedback from the WGA on the deal.

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