WME Blasts WGA for Lack of Negotiations in Franchise Agreement Battle

Cynthia Littleton
·4 min read

WME fired back at the WGA on Wednesday, faulting the union for failing to engage in negotiations to settle the fight that has kept WME from representing writers for nearly two years.

WME issued a lengthy statement in response to a letter sent Tuesday evening to WGA members by the guild’s negotiating committee in which the union rejected the latest proposal from WME, sent on Dec. 23.

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WME asserted that the guild has so far refused to engage in negotiations on specific issues that WME is facing as its parent company Endeavor sets a plan for selling most of its stake in Endeavor Content. That divestment is necessary for WME to comply with the guild’s tightened rules regarding ownership of production or distribution assets as a condition of representing film and TV writers and showrunners.

“WME presented an updated proposal that made a series of concessions just four days following our hearing on December 18. We made clear our willingness to engage in further dialogue with the WGA at any point during the holidays,” WME said in a statement. “We know this is how every other agency finally reached a deal—they had the opportunity to have a discussion with the Guild to address their specific needs, and that is what we have continuously tried to do in an effort to get a deal done. However, instead of responding directly to us, once again we learned indirectly through media reports that our proposal was rejected by way of a leaked letter the WGA Negotiating Committee sent to Guild members. There was no counter to our proposal, nor any offer to meet and engage.”

Litigation on the issue is pending between the agency and the union. WME did not close the door to continued efforts to reach a deal although the WGA made it clear in its letter to members that the terms for a deal are clear.

“While we find this tactic unhelpful in reaching a resolution, we will persist in our efforts toward reaching a new franchise agreement,” WME said.

WME and WGA are awaiting a ruling from U.S. District Judge Andre Birotte on the agency’s request that they be allowed to resume representing writers while the lawsuit plays out. The agency maintains that the guild has overstepped its authority with clients in what amounts to an illegal boycott of the agency. The WGA asserts that WME is being afforded the same chance to come into compliance with the guild’s toughened agency franchise rules that were implemented in April 2019.

WME insists that the guild gave CAA, which had been a party to WME’s lawsuit until it settling with the WGA earlier this month, and other large talent agencies the chance to tailor the settlement terms to their needs. WME argues that it needs more time than the one-year timetable spelled out in the other agency agreements because the unwinding of Endeavor Content from Endeavor is a more complicated process than CAA had to navigate with its production entity, Wiip. Endeavor by far has made the biggest investment in traditional content production and distribution as part of its diversification bid over the past seven years. The judge acknowledged that in the Dec. 18 hearing on WME’s request for a preliminary injunction.

The WGA has mandated that talent agencies and their parent entities have no more than 20% ownership interest in a production or distribution entity. WME and its parent company Endeavor have said they will agree to that stipulation but they need more time to get there with Endeavor Content, which has about 250 employees. A big hurdle has been settling the fate of existing Endeavor Content projects in various stages of development and production — projects that will be hard to offload on short notice in the pandemic-disrupted marketplace.

Another sticking point has been the WGA’s demand that the ownership restrictions apply not only to WME’s parent company but also investors in Endeavor, namely private equity giant Silver Lake, which owns a majority stake in Endeavor. It’s understood that WME’s latest offer included the concession that Silver Lake would abide by those restrictions and make disclosures to WME clients if Silver Lake invests in any other such entities.

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