Bringing an end to one of Hollywood’s largest legal battles in recent years, the Writers Guilds of America (WGA) and talent agency William Morris reached a settlement in William Morris Endeavor Entertainment, LLC v. Writers Guild of America, West, Inc. et al. The settlement marks the final step in a long-running series of disputes between the WGA and a number of agencies, also including Creative Artists and United Talent Agency, focused on the talent agency fee structure and agency incentives.
A Brattle team supported the WGA throughout the litigation process, most recently including testimony by Principals Coleman Bazelon and James Reitzes that focused on the relationship between showrunners and other writers in the execution of show writing responsibilities and the adverse incentives created by agency ownership of production studios. Brattle’s analyses contributed to a highly successful outcome for the WGA, as the court dismissed William Morris’s preliminary injunction motion and a favorable settlement was agreed upon.
For years, the Writers Guilds of America (East and West) have been involved in legal battles with parties it must work with on a daily basis: talent agencies. It started with a 2019 decision by the WGA to prohibit “packaging fees” in agreements between talent agencies and the Guilds. Over the years, the agencies had progressively switched from a model in which the talent they represent each paid a commission that increased with earnings to one where the agencies instead charge studios packaging fees for providing most or all of the talent needed for a television or film production. The packaging fees they collect are a series of charges taken out of the revenue or profits of a new project and eliminate the financial incentives for agents to fight for higher compensation for talent.
Once the WGA’s decision went into effect, writers who were in the Guilds ended their relationships with talent agencies that were not abiding by the new rules. Shortly thereafter, three of the largest talent agencies sued the WGA for allegedly enforcing a boycott that kept WGA members and others from working with them.
After the talent agencies sued the WGA and the Guilds countersued, the cases began settling out of court until only one agency, William Morris, had not settled. Instead, the agency filed a preliminary injunction, along with an economist declaration, aiming to stop the alleged boycott.
Retained by the law firm Constantine Cannon, Brattle provided economic analyses on behalf of the WGA (East and West) throughout the course of the litigation and in response to the preliminary injunction motion. Our team – including Dr. Reitzes and Dr. Bazelon as well as Principal Jeremy Verlinda and Senior Associate Josephine Duh – analyzed the substitutability among writing talents on a television or film project and the economic impacts of agencies’ use of packaging fees and bundled talent representation, including the effect on writer compensation. We also examined the adverse incentives for writer compensation and access to project opportunities created by agency ownership of production studios.
The court ruled in favor of WGA and dismissed William Morris’s preliminary injunction motion. On February 5, 2021, the WGA and William Morris reached a settlement, ending years of legal battles affecting the Guilds, agencies, and writers throughout the United States. The settled franchise agreement consists of stipulations similar to other agency settlements, including an end to packaging fees following a pre-determined sunset period and a percentage limit on an agency’s ownership of production companies.