Brow Beat

Why Are Hollywood’s Writers Fighting With Their Agents?

Let Li’l Abner explain.

A picture of the Hollywood sign, with a schism down the middle.
Hollywood, divided. Photo illustration by Slate. Photo by ROBYN BECK/AFP/Getty Images.

What’s with all the fussin’ and a-feudin’ between writers and their agents?

Well, it comes down to a dispute between the Writers Guild of America and the Association of Talent Agents over packaging fees. What’s with phrasing a question about Hollywood business practices like you’re auditioning for Li’l Abner?

I was led to believe that affectin’ a conversational style would help keep readers interested. What in tarnation is the Writers Guild of America ?

It’s incredibly annoying and you should stop it forever. The WGA is the labor union that represents screenwriters in their dealings with film studios and television networks.

Is there anything you’d like to disclose to readers at this time?

I have been a member of the Writers Guild of America East, one of the two affiliated unions under the WGA umbrella, since earlier this year. I have no personal or financial stake in the outcome of this battle over packaging fees besides the basic human need for excellent television programming. Is there anything you would like to disclose at this time?

Once … upon … a time … there was a popular format for news stories that required journalists to pretend to be two people, one of whom writes only in boldface, which means that I, too, am a member of the WGAe. Or we’re both half a member, depending on how you interpret Us.

I hate you. I hate us both. So what’s the Association of Talent Agents?

The ATA is a trade association that represents talent agencies. Their agents negotiate deals between writers, directors, actors, and other talent with studios and production companies, theoretically in exchange for a percentage (capped by law at 10 percent) of each client’s pay.

Wow, you seem to know more about this than you originally let on! But you left out an important detail: The WGA also has an agreement with the ATA that governs what agents are and are not allowed to do while representing union members. The division of labor and pay structure is supposed to put the ATA and the writers its agents represent on the same side in most disputes, since agents make money when their clients do and make more money by earning more money for their clients. But that’s not the only way an agency can make money. There are also packaging fees, which are a particularly big deal in television.

OK, brain genius, what are packaging fees?

Well, if you really want to get into it, “television packaging” once referred to literal packages. In the days before nationwide broadcasting, when TV shows were usually performed live, “television packaging agencies” like New York’s Video Associates would sell local stations TV-shows-in-a-box: scripts, plans for building the sets, notes on camera placement, and even props and costumes. So a local station could purchase a marble, a plastic horse, a firehose, and a season’s supply of oatmeal just by writing a single check.

Right, but I asked about packaging fees as they relate to the current dispute, not ancient trivia that was obviously just an excuse to embed that clip from UHF where the kid drinks from the firehose.

In point of fact, you didn’t specify. But fine: A packaging fee is a fee paid to a talent agency for assembling a “package” of talent. The platonic ideal is a situation where an agency puts together a complete roster for a film or TV show, allowing a studio or production company to make one deal that gets them the script or show idea, writers, directors, actors, and so on, all at once. In exchange for (hypothetically) gathering and attaching the talent, the studio pays the agency a separately negotiated fee, and the agency no longer takes the 10 percent of its clients’ fees that it would otherwise be entitled to. For example, the agency that represents cartoonist Al Capp might pair him with screenwriters whom it also represents in order to develop his comic strip into a movie, then take that finished script to a studio with its own clients already attached to direct and star. The studio gets a ready-to-go project, the agency gets to negotiate its own fee, and the world gets this:

Well, what’s wrong with giving the world a Li’l Abner movie?

Plenty! But what’s wrong with packaging a Li’l Abner movie is that the link between the client and his or her agents’ compensation has been severed, which can create conflicts of interest. For starters, since packaging fees can be split between agencies, agents have an incentive to encourage their clients to work with the agency’s other clients, and an even bigger incentive to keep other agencies’ talent away lest it cut into their packaging fees, regardless of what their clients want or what’s best for the project. If the director of a Li’l Abner movie thinks Julie Newmar was born to play Stupefyin’ Jones, but Newmar is represented by a different agency, the director’s agency would stand to make more money if it could convince the director not to hire her, or convince Newmar not to take the part. And then the world would miss out on this:

Is there a quote from a “top TV writer-producer who spoke on condition of anonymity” in a 1989 Chicago Tribune article about packaging that describes how that system works?

There is, and here’s how it goes: “It’s Al Capone saying, ‘Fellas, you wanna open a bar in South Chicago? This is the deal: My beer. My laundry. My glasses. My bartender. My union. My trucks.’ ”

Well, that sounds hilariously corrupt. Is the situation worse in television?

Have you seen television? The situation is always worse in television! In TV, a package deal cuts the link between agency and client compensation and gives the agency incentives to work against its client’s best interests just as it does in film, but then it lets that relationship play out over years instead of a single production. Typically, an agency’s packaging fee is a percentage of the money the network spends for each episode of the TV show, then another percentage of the show’s budget once it becomes profitable, then another percentage if the show goes into syndication. That creates so many incentives for an agency to work against its clients’ interests, it’s hard to count them all. Say a show gets renewed for a second season: The agency is responsible for negotiating the salaries of the clients it attached, but since it’s no longer entitled to the 10 percent it would ordinarily make from those salaries, it won’t make any more money by getting its clients raises. In fact, if those raises cut into the show’s profitability, the agency has an incentive not to negotiate the best possible deal for its clients.

Is that why there’s never been a Li’l Abner television series?

Maybe one of the reasons? There was a TV movie, I think, and a pilot that didn’t get off the ground. Didn’t you say you were affecting a Li’l Abner accent at the beginning as an attempt to keep readers interested in this WGA-ATA dispute? It kind of seems like what’s really going on is you’re obsessed with Li’l Abner.

I hate you too, you know. Did the WGA produce a video that graphically illustrates how the money gets divided up in a way that makes the issue clearer even if you disagree with its position on packaging fees?

It sure did, and here it is:

What about a page full of anecdotes about agents engaging in extraordinarily shady behavior to maximize packaging fees?

Yeah, and it’s a real horror show.

In a lot of these stories, the agents are lying or withholding crucial information from the people they are supposed to be representing. Does that really happen?

Huh. Well, I prefer to get my anecdotal evidence from long essays by David Simon describing in great detail the way CAA screwed him over on Homicide.

You’re in luck!

So how long has this dispute been going on?

For decades. Every few years, talent, studios, networks, or some combination of the three point out that packaging fees are ethically dubious, but nothing ever seems to come of it. In 1983, one dustup prompted producer James L. Brooks to comment, “I’ve never heard a justification for packaging in any way that any rational person could accept.” In 2002, SAG let its agreement with the ATA expire and never renewed it, partly over packaging fees, but it still let ATA agents represent its members. Now the WGA is taking another run at it, and the main difference between what it’s doing and what SAG did in 2002 is that it is forbidding members from being represented by agents who won’t agree to the guild’s code of conduct.

Did ATA members release a report that described the ethical issue here entirely in terms of money?

Well, they weren’t going to try arguing that packaging fees are fair! They say that getting rid of packaging fees would cost writers about $50 million every year, since they’d have to pay their agents a 10 percent commission instead of letting the studio pay the agency separately. That’s kind of apples to oranges, though, because in a world where agencies were making their money off that 10 percent instead of packaging fees, they might negotiate harder for their clients, and the studios might have more money to spend on talent, if they weren’t paying packaging fees.

Are the writers asking for anything else that the agencies don’t want to give them?

Yes: They also want the agencies to sever their ties to the affiliated production companies they’ve started or bought to produce their own content, since that’s an even more indefensible example of agencies abandoning their duties to their clients when doing so can be profitable.

So that’s the landscape. Were you ever planning on going into what’s actually happened, or were you just going to fool around for another thousand words about ethics?

Someday I will make you pay for this disrespect, but for now, here’s the timeline. The WGA sent proposals for changing its agreement with the ATA in April of 2018, suggesting an end to packaging fees. The two parties didn’t meet in person until February of this year. Negotiations continued in March, but went nowhere; on March 31, the WGA held a vote asking its members to authorize the new code of conduct even if the ATA wouldn’t agree to it. It passed with 95.3 percent support, which is some indication of how much writers hate packaging. Both the WGA and ATA agreed to a one-week extension on the original April 6 expiration of their agreement, but although the ATA offered writers some ability to participate in its back-end deals—1 percent—the proposal did nothing to realign its incentives, and the WGA turned it down. On Saturday, the WGA’s new code of conduct took effect, and the union asked its members to inform agents whose agencies hadn’t agreed to it that they could no longer represent them.

That sounds like chaos.

And right before Tax Day! Although some agencies have agreed to the WGA’s terms, the major agencies have not, which means WGA members have been asked to inform their agents that they can’t represent them until their agency signs on.

Have A-listers been posting screenshots of these letters? Did Patton Oswalt?

Funny you should ask!

Do you think Patton Oswalt would be interested in playing “Earthquake McGoon” in a Li’l Abner reboot?

Yes, now that you mention it, Stephen King has also posted his letter on Twitter.

Have any writers made a big deal about not firing their agents?

Absolutely! Jon Robin Baitz, creator of The Slap, sent a letter to the WGA and Deadline announcing that he was sticking with his agents and rejecting “the urge to tear down extant structures, simply in the name of ‘fairness.’ ” You can read it here.

Huh. So what happens now?

Nobody knows! The WGA is encouraging members to use their managers and lawyers to negotiate deals if their agency hasn’t signed the code of conduct; the ATA says this isn’t legal. If nobody blinks, some of the issues at play will probably end up being settled in courts.

Is this one of those situations where people are defending something that is obviously shady because it is making them money?

There’s a lot of that going around lately!

You know what movie had a lot to say about that kind of venality?

This had better not be about about Li’l Abner.

No, but in a weird way, it’s about insulin profiteering.

Fine. What movie had a lot to say about that kind of venality and also insulin profiteering?

Here you go:

I am going to track you down, put you in a cardboard box, dump you off the back of a cargo ship in the middle of the South Pacific, and charge your estate a packaging fee.

Correction, April 16: This article originally misstated that the dispute was between the Writers Guild of America, West and the Association of Talent Agents. In fact, both branches of the WGA, East and West, are involved in the dispute.