July 30, 2021

DCTRS

Damascus Center for Theoretical and Civil Rights Studies

Creative Artists Agency reaches deal with WGA

CAA signed an agreement with the Writers Guild of America, bringing the industry closer to settling a long-standing dispute over practices deemed harmful to writers.

The Century City firm is one of the biggest Hollywood agencies, and an agreement with the WGA marks a significant achievement for the union, which has waged a 20-month battle sparked by the rise of packaging fees and the growing involvement of agencies in the world of production.

“CAA and the WGA have concluded and signed a franchise agreement confirming CAA can resume representing writers and continue the important work of helping them realize their ambitions,” CAA said in a statement Wednesday. “We end this year of unprecedented global challenges with the optimism and energy that today’s news brings, starting now and for the years ahead.”

WGA confirmed the deal. CAA previously announced an agreement with the WGA in September only to have the union contradict its claim as premature.

Under the pact, CAA has agreed to end packaging by the end of June 2022 and to reduce its stake in its affiliated production company, Wiip, to no more than 20%.

A deal with the WGA is a welcome boost for CAA and its clients. Like other talent agencies, the firm has been hard-hit by the pandemic, which has delayed many Hollywood productions and live events. The Century City agency has reduced salaries, furloughed employees and laid off staff to cut costs. The WGA dispute added further financial stress on CAA because it was unable to represent writers without an agreement sanctioned by the union.

Thousands of writers fired their agents in April 2019 after the WGA failed to reach an agreement with agencies on ending or curtailing packaging and other practices that the union contended created conflicts of interest between agents and the writers they are supposed to represent.

Some CAA agents have left to form their own management agencies, raising concerns over whether former writer clients were using managers to book jobs instead of CAA. In California, only licensed agents are allowed to procure work for writers under the Talent Agencies Act.

CAA sued WGA, alleging the union’s boycott was illegal, and requested a preliminary injunction to allow writers to return to CAA during the lawsuit. WGA also sued CAA. The parties have agreed to drop their respective lawsuits.

CAA and its investor TPG will reduce their ownership stake in Wiip to 20% or less, with their stake placed in a blind trust.

If the trustee does not sell the stake by an undisclosed deadline, WGA says the union can suspend CAA’s ability to represent writers, and any fees or commissions from Wiip will be put into escrow until a sale is done.

TPG has also agreed to disclose when other TPG entities that are not CAA investors have 20% or more interest in a production company, WGA said.

“This transparency will allow the Guild to make sure that CAA is negotiating appropriate deals for writers in these circumstances, and that TPG’s ownership interest is not suppressing the value of writers’ services,” wrote the WGA Agency Negotiating Committee in a letter to WGA members.

The only other major agency that has yet to reach a deal with the WGA is WME. UTA and ICM Partners signed agreements this summer.

“We have reached out to the Guild to learn more about the specific terms of their agreement with CAA, but we think today’s news is a positive development and suggests a path forward for WME to reach an agreement as well,” WME said in a statement.