WGA’s Deal With Kaplan Stahler Could Entice Other Mid-Tier Agencies To Sign Its New Franchise Agreement
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The signing of the Kaplan Stahler Agency to the WGA’s newly modified franchise agreement has been hailed as a win for the guild, but could it open the floodgates to other mid-sized agencies following suit?
The new deal is far more flexible than anything the guild ever offered to the Association of Talent Agents, and though it still prohibits packaging fees and agency affiliations with corporately related production companies, a new provision allows individual agents to own less than 3% of the shares of any publicly traded entity engaged in the production or distribution of films and TV shows. That alone could be a deal-maker for some mid-tier agencies.
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To date, 75 mostly small agencies have signed up, but Kaplan Stahler and the small Pantheon agency are the only ATA members to sign what had been known as the WGA’s Code of Conduct but now is being called its Franchise Agreement. The Verve agency was the first mid-sized agency to sign back on May 16, but it is not an ATA member.
Rumors have been swirling around other mid-tier ATA members that might be considering signing, but Deadline has confirmed that at the moment, there is no change in the position of at least two of them – Abrams Artists Agency and Rothman Brecher Ehrich Livingston – not to sign.
The Big 4 agencies – CAA, WME, UTA and ICM Partners – which are locked in a protracted legal battle with the guild, almost certainly won’t agree to the guild’s new terms, but many other small and mid-sized agencies soon could join Kaplan Stahler and Verve in signing up.
Read the new agreement, which the guild is now offering to all agencies here.
Until now, many mid-sized agencies have been reluctant to sign – even those that don’t do much packaging and aren’t affiliated with production entities – because of various terms they considered onerous “power grabs” by the guild. Those include turning over clients’ contracts and confidential information to the guild and what many saw as one-sided arbitration provisions that were stacked in the guild’s favor.
The WGA’s new deal is expected to be more attractive to mid-tier agencies – especially those with significant literary divisions – because it addresses many of those concerns, which could open the spigot for more signings.
The Abrams Artists Agency, however, isn’t buying it. Its chairman, Adam Bold, had reached out to the guild several weeks ago with an offer to forego packaging fees and affiliation with related production entities, but couldn’t come to terms with the guild on these secondary conditions.
“I’m in the same place I was before,” Bold told Deadline. “My dad taught be that just because somebody else does something, it doesn’t mean that I should do it to. Am I going to jump off a bridge just because Kaplan Stahler did? At some point, there needs to be an industry-wide contract. I want to put the writers back to work. I want to go out and pitch content. I have to do what’s best for my company and my employees, and what’s best for our clients.”
Under its new confidentiality provisions, the WGA now says that it “commits to treat all information submitted by agent with heightened security protocols and to limit access to staff with a valid guild business need to access the information, who have received enhanced data security training.” And in the event that any writer submits a written objection to his or her agent concerning the agent’s disclosure of any relevant information to the guild, the following procedures shall apply:
• Agent shall explain to writer the nature of the disclosure requirement (including the confidentiality protections) under the agreement and shall discuss with the writer the advantages of withdrawing the objection.
• If writer does not withdraw the objection within five business days of submission to the agent, agent shall immediately provide the guild with a copy of the objection and an identification of the contract or other information being withheld on the basis of the objection. Agent shall also immediately provide to writer a copy of the contract or other information being withheld from the guild on the basis of the objection.
• Agent’s obligation to provide the guild with information subject to an objection shall be satisfied upon agent’s compliance with the requirements of subsections (i) and (ii) above, until such time as writer withdraws the objection.
The new deal also provides for a phasing-in of the one-year reprise the guild previously had offered to allow the agencies to continue taking packaging fees. “From the effective date until June 28, 2020, nothing in this agreement shall be deemed to prohibit agent’s negotiation of the right to receive a fee based on package representation in lieu of a percentage commission based on client compensation,” the new agreement states. “During that period, where writer is the sole initiating element of the package, writer shall have the right to choose if the project can be packaged by agent. In all other circumstances, agent shall disclose to writer its intent to seek a packaging fee and the financial terms thereof, and writer shall be given the choice of whether to be part of the package. Agent’s right to negotiate packaging fees shall terminate on June 28, 2020.”
The new agreement also will remain in effect two years longer than under the old Code – until April 12, 2024, “unless it is found to be unenforceable or is ordered terminated by an arbitrator or court of competent jurisdiction.” The longer five-year term is a promising development because the agencies were concerned that the original length was very short and the guild could change terms, including commission.
That was enough for Kaplan Stahler, but whether it will entice any other agencies to sign remains to be seen.
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