John Wells Endorses Phyllis Nagy For WGA West President; Urges Return To Bargaining Table With Agencies

David Robb

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Calling on the WGA to return to the bargaining table with the Association of Talent Agents, former WGA West president John Wells announced today that he’s supporting Phyllis Nagy for president of the guild, as well as her entire slate of running mates. Nagy is seeking to unseat WGA West president David A. Goodman. Election ballots went out last Thursday and will be counted on Sept. 16.

“It’s time to return to the negotiating table with the ATA, pound out full disclosure and transparency for our members involved in packaging and demand the agencies fully divest themselves of their affiliated content companies,” he said in a message to the guild’s members today. “The candidates I’m supporting are committed to this approach. That’s why I’m supporting them. This isn’t caving, this is defining clear, and achievable goals in a negotiation.”

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Wells, who was president of the guild from 1991-2001 and from 2009-2011, is supporting Nick Jones Jr. for treasurer, and board candidates Nick Kazan, Sarah Treem, Courtney Kemp, Rasheed Newson, Jason Fuchs, Ashley Miller, Marc Guggenheim and Ayelet Waldman.

The WGA and the ATA showdown has been going on since April 13, when the guild ordered all of its members to fire their agents who refuse to sign its Code of Conduct, which bans packaging fees after one year and agency affiliations with related production entities.

Wells, whose many executive producing credits include The West Wing, ER and Shameless, said that the WGA’s current battle plan doesn’t take into account the industry’s rapidly changing business model.

This is the message he sent to the guild’s members:

“First, and most importantly, I want to ask you to please take the time to vote in this important Board and Officer election. Our Guild is a strong and vibrant democracy and it needs the participation of all of our members to remain successful. So set aside a few minutes to read the candidate statements and weigh the merits of the arguments and concerns presented by the members who have offered to volunteer their time in the service of us all.

I am supporting a group of writers I believe can lead the Guild into the future in this time of dramatic industry consolidation and titanic shifts in the way our audience is accessing our work.

Let me be clear, I am an admirer of our current Board and the Agency Negotiating Committee and count many of them as friends. But I disagree strongly with the institutional emphasis being placed on the current Code of Conduct battle with the agencies.

Make no mistake, packaging practices need reform. We require a mechanism for full disclosure so members know when they’re being asked to participate in a package and what being a part of that package will mean for them financially. But with the rapid changes that are occurring in the distribution of our work, packaging is disappearing, not accelerating.

Agencies who package are basically profit participants, they receive some upfront fees for delivering the package (3% of license fees in most cases — reduced by the commissions they are not receiving from their clients) and then 10% of the profits in success. But the industry we work in is changing, and fast. Very few shows now will ever reach “profits”. In a world where Netflix is buying out all rights as part of the initial compensation package (therefore eliminating any profits), where Disney/Fox is floating similar deal documents that would also eliminate profits as we have known them in the past, and with Amazon, Warner Media, and Apple all looking to exploit (use) the shows they make only within their own fully, vertically integrated silos — packaging profit is quickly disappearing. What’s the point of having packaging points in the “profit” when there won’t be any profits given the way the companies are now planning to use our work?

Profits come from ancillary rights: foreign sales, syndication reuse on cable and local airings, DVDs (gone), etc. But there are no foreign residuals on Netflix, no syndication residuals, no other uses — because Netflix buys out all of these rights up front and runs our work only on Netflix. And the other companies are rushing to follow suit to remain competitive. The old business models that led to “profits” are disappearing. 10% of nothing is nothing.

That’s why the agencies have rushed into content creation — the packaging fees they depended upon are drying up and they know it. They want to set up affiliated content creation companies to replace the disappearing packaging profit revenue with revenue as co-owners of our work. This clearly violates their fiduciary responsibilities to act as our agents. The affiliated content creation companies need to be fully severed from the agencies. This is where our energies in this negotiation must be focused. And why were the agency affiliated content companies ever allowed to sign on as WGA signatories in the first place? Was leadership unaware of the tectonic shifts happening in the business model that employs us all?

Even more disturbing to me is who will this packaging disagreement with the agencies benefit if we were able to outlaw all packaging? Our members who are profit participants in packaging deals are our most successful members. In my many years serving on the Board and in the leadership the first question we always asked ourselves was — how do we protect the majority of our members and further the interests of the majority of writers? What should we be doing every day to further the economic interests of our members, and particularly, our members that need the protection of the Guild the most?

The entire membership is being asked to support the allocation of considerable, invaluable, staff time, legal fees and the associated costs in support of litigation and member mobilization to benefit the most successful members of our Guild.

And I don’t accept the argument that the elimination of packaging fees will lead to more money being available for our members. There’s a term for this argument, it’s called Trickle Down Economics and it didn’t work when Reagan championed it decades ago and it won’t work for us now. The best resource for getting more money into writers’ hands is our own Executive Producer members who need to take greater responsibility for the writers they work with, advocating for their writers to insure writers are being appropriately paid.

The Guild has major challenges ahead, decades of negotiations and member actions have gone into creating our residual system, a system created for a very different business model than the one we’re now confronting with the explosion of streaming. Over our next few negotiations our residuals will be under extraordinary strain as the multiple revenue streams that have supported our residuals are reduced by our work being increasingly funneled into exclusive streaming platform use (and multiple uses within the vertically integrated companies without triggering additional residuals – a practice I believe the companies will vigorously pursue).

Our Guilds’ energies need to be focused on how we will protect and replace these essential residuals as the distribution model for our work changes drastically. Our residuals are the lifeline that allows writers to continue to pursue their careers between jobs and especially during the lean years at the beginning and at the end of our careers. This agency negotiation, however appropriate and well-considered at it’s inception, now threatens our unity at a time of great peril for the Guild. The companies’ business models are changing, they will be looking to us to change our residuals with them and we have to be fully unified to meet these challenges.

It’s time to return to the negotiating table with the ATA, pound out full disclosure and transparency for our members involved in packaging and demand the agencies fully divest themselves of their affiliated content companies. The candidates I’m supporting are committed to this approach. That’s why I’m supporting them. This isn’t caving, this is defining clear, and achievable goals in a negotiation.

We have an excellent Executive Director in David Young who has assembled an extraordinary professional staff. We need to turn their attentions to the larger issues at hand as we rapidly approach the 2020 MBA Negotiations. I have great respect for the courage exhibited by our members who stepped forward to bring past packaging abuses to light. They were right to do so and deserve our thanks and appreciation. But it’s time to get back to the negotiating table.”

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