The writer-agency feud that could dramatically change the entertainment we watch, explained

If you keep up with the world of Hollywood gossip and industry reporting, you’ve probably encountered the unfolding battle between the film and TV industry’s slew of writers and the agents who represent them. The drama has been major news in the trades for many months now, but it’s not captured the public’s attention in the same way the writer’s strike did back in 2007. Even to industry experts, the entire story feels super insider-baseball in a tangled and legally complex way that can be difficult to parse out in layman’s terms. How do you even begin to understand something this labyrinthine and how does it affect the casual viewer who has no interest in the matters of entertainment business unions? Well, we’re going to give it a go.

First, some basic details. The Writers Guild of America (also known as the WGA) is a labor union that represents writers of film, television, radio and emerging new media (like internet-based entertainment). It was founded in 1954 when five various organizations representing writers came together. This happened at a time when writers unions were targeted heavily by Hollywood and the government as part of the extensive blacklisting efforts to snuff out alleged communist plotting. As with all guilds and unions, the basic objective of the WGA is the ensure its members are fairly represented in matters of labor rights, fair pay, registration of work, and so on. On the other side of the conflict is the Association of Talent Agents (also known as ATA). This group has been around since 1937, representing the work of talent agencies in the entertainment business. They represent over a hundred agencies, but the biggest grievances are being directed at “The Big Four” agencies who, according to the WGA, account for almost 70% of their members’ earnings: Those agencies are William Morris Endeavor (WME), Creative Artists Agency (CAA), ICM Partners, and United Talent Agency (UTA).

Agents are the people who get jobs for their clients. It's up to them to get their writers, actors, and so on in meetings with the studios and producers with the big gigs. If they get the job then it's the agent's duty to negotiate for the best contract possible. Once the deal is closed, the agent takes their commission, which is usually 10%. So, if Chris Pine gets $5m for a new film, his agent immediately claims $500,000 of that for themselves. But this isn’t the part of the deal that the WGA have a problem with. What they are currently fighting against is a process known as packaging.

Packaging is a business practice wherein agencies bundle up talent represented on their roster for a specific project. To give an example, imagine if you were a writer and had an awesome fail-safe idea for a TV show. It's perfect for HBO, your agent tells you, but you need to sweeten the deal for them and make sure they can't refuse you. So they'll bring on board an actor to star and a big-name director for the pilot, both of whom are also clients of the same agency you're represented by. If the deal goes through and you get your show, your agent can claim packaging rights because they represent all the people on your team, entitling them to a hefty fee. That fee, according to the WGA, can be as much as $30,000 to $100,000 per episode, which comes from the production's budget. Gavin Polone, an agent turned producer, described the financial realities of this practice to The Hollywood Reporter in 2015:

"In exchange for supposedly "packaging" a TV show — sometimes that means putting together a writer with an actor or director or property the agency represents, and sometimes it just means negotiating a client's deal (and maybe not even that, as lawyers often do the negotiating) — the production company pays the agency a fixed percentage (usually 3 percent) of the network base license fee after each episode is produced, an equal amount deferred out of profits (if any) and a percentage of the profits (usually 10 percent). So, on a typical network hour drama, we could be talking about $30,000 per episode going to a talent agency for every episode produced plus, in success, another $30,000 per episode that had been deferred. These figures escalate in subsequent years in step with the prenegotiated bumps in the base license fee that the network pays the studio or production company."

This has proven to be a lucrative business for agencies, and according to the WGA, a staggering 87% of all shows that aired during the 2016-2017 TV season were packaged. Two agencies were responsible for 79% of those deals. For the writers, however, the benefits of packaging have not trickled down to them. Many writers have expressed fears that their needs and desires as clients are not being prioritized in these deals because agencies are too focused on making money from the packaging. They also want to eliminate the fees that studios pay agencies for delivering those packaged bundles.

The WGA released a statement in favor of opposing these packaging fees and requiring "agencies to work with the Guild to protect writers’ interests by providing writer contracts, invoices and other information", signed by big names such as Tina Fey, Shonda Rhimes, Linda Woolverton, and Rachel Bloom. The ATA have widely opposed the WGA’s demand for a code of conduct regarding packaging, saying it’s the only way they can make money in an industry with rising overhead costs, and that said packages are truly more beneficial to writers than non-packaged deals. Last week, the ATA and WGA came to a deal that delayed the implementation of these tighter rules for seven days, but after that, things could get messy. The WGA have already talked about an en masse firing of their agents if the packaging issue is not sorted out. The WGA have been accused by the ATA of refusing to compromise, while the WGA have accused the ATA of not standing up for their clients’ rights. Suffice to say, this isn’t an issue that will be solved overnight.

Being a writer is a tough job in general, but historically speaking, it’s been especially tricky in the world of film and television. Wages aren’t rising as promised, unions have faced decades of smears and outright hostility, and competition is steep. The landscape of television has dramatically changed over the past decade, and nowadays things are getting even tougher. There are more shows than ever but their typical season runs are shorter than they used to be, leaving some writers jumping from show to show just to pay the bills. There’s also a lot less opportunity for reaching syndication deals, which used to be how writers made the bulk of their cash. In a streaming age, there’s less money in terms of residuals because your Netflix exclusive won’t be syndicated for other networks.

This practice has undoubtedly impacted your viewing choices without you even noticing it, especially when the vast majority of shows being made over the past couple of years are the result of packaging. The people who make the series you love are probably being influenced by packaging and have to work within a system many of them find stifling and actively harmful. Of course, if you’re just someone who watches a lot of TV and doesn’t think about this stuff (and that constitutes the vast majority of viewers), then this may not directly affect you. It probably won’t have the same industry-changing impact the writers’ strike did, the effects of which still loom over us. For many, as long as they get to see their fave shows then all the behind-the-scenes stuff doesn’t matter. But it’s important as fans to understand the industry that produces the vast majority of the entertainment we consume, and how the people creating that art struggle with the realities of such labor. The people who make art should matter more than the art itself, and their union rights are at the forefront of this. If the writers feel they are not being fairly represented by the people making money to do so then nobody wins.

The clock is ticking for change in this battle. If the writers collectively walk out on their agents then it could completely rewrite the business of Hollywood. But will they do it? Well, we may find out soon enough.