The Directors Guild has joined the Writers Guild in the ongoing litigation between the WGA and WME over the agency’s ownership interest in its affiliated production unit – Endeavor Content. In a letter received from Dateway (see below), DGA National Executive Director Russell Hollander told WME President Ari Greenburg that the DGA “has been following the negotiations and litigation closely and now is the right time to see our strong support for the WGA to communicate efforts to fix the problem of the affiliated production company. “
In his letter of December 31, Hollander also said to Greenburg: “This ongoing conflict of interest is not acceptable to the DGA. Without an immediate resolution, we intend to take all necessary and appropriate measures to protect our members. “
Despite the agreement, the CAA and WGA are still arguing over how they got there
The DGA declined to comment.
Here is the full text of Hollander’s letter:
The problem of talent agencies owning production units was and is of great concern to the DGA. While we have not publicly commented on these concerns, we have raised them several times with representatives from WME and Endeavor Content. Now that the discussions between WME and the Writers Guild of America have reached a critical point, it is time for us to make our position clear.
The problem of avoiding conflicts of interest is extremely important to the DGA and our members. Associated property has inherent and obvious conflicts of interest. Agents should be free and light-hearted to perform their duties to their director clients with only due regard to the interests of the directors and should provide work for directors without the incentive to do low-cost deals with manufacturing companies that are the same parent company as theirs Agency belong.
We recognize that the conflict of interest issue arising from related production ownership remains the last outstanding issue preventing a resolution between the WGA and the WME. We have been following the negotiations and litigation closely and believe that the time is right to communicate our strong support for the WGA’s efforts to address the affiliate manufacturing company’s issue. We share your concerns and urge WME to use the WGA to resolve this issue in such a way that talent agents can fulfill their customer loyalty obligations without a conflict of interest.
This persistent conflict of interest is not acceptable to DGA. Without an immediate resolution, we intend to take all necessary and appropriate measures to protect our members.
With best regards,
National Executive Director
WME is the only major talent agency that has yet to sign the WGA’s franchise agreement, and reducing WME’s stake in Endeavor Content to just 20% is one of the last remaining problems holding up a contract. The WGA also wants WME and its private equity owner Silver Lake Partners to agree to the same terms as CAA and its private equity owner did last month when they signed the guild’s franchise agreement.
The day before Hollander sent the letter, a federal judge denied WME’s request for an injunction that would have ended the agency’s boycott until the cartel case can be brought to justice. It was a huge legal win for the WGA, adding to the pressure on WME to resolve the 21-month dispute and sign the WGA’s franchise agreement, as did all of the other major talent agencies.
WME said it wants to reach an agreement with the WGA and made a proposal last month that it hopes the WGA would accept. They say: “We want to find a way forward with the guild and represent our author-customers again.” The WGA declined this offer, however, on the grounds that “WME does not yet have to seriously deal with its own conflicts of interest”.
The WGA’s battle to transform its talent agency business began in April 2018 when it notified the Association of Talent Agents of its intention to renegotiate its Basic Artist Manager Agreement, and a year later the writers overwhelmingly voted in favor of the AMBA and terminate all unlicensed agencies. Since then, the WGA has negotiated 10 consecutive versions of its franchise agreement to accommodate sensible agency proposals – beginning in May 2019 when it signed Verve; again last summer when it signed UTA and ICM and last month when it signed CAA.
The DGA last dealt with the dispute between the WGA and talent agencies in April 2019 – just days after the WGA urged its members to fire their agents who refused to sign their new agency code of conduct, modified versions of it Now the packaging fees are phasing out by 2022 and severely restricting their affiliations to related manufacturing companies.
At that time, the DGA hyphenated its members that they would not have to fire their agents for DGA-covered work even if they were also writers who were told by the WGA to fire their agents who refuse to to sign their code of conduct. “There are important issues that we are investigating as part of the agreement with the DGA agency,” the DGA said at the time. “As our franchise agreement is currently in effect, we are not currently instructing hyphenated members to terminate their agents with respect to DGA Covered Services.”