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Hollywood Writers Sue Their Agents Over Pay and Competition Issues

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  • The Writer’s Guild of America is suing four major talent agencies alleging unfair competition practices and pay issues.
  • The WGA claims that the packaging fees that agents take as part of representing writers are illegal under California and federal law.
  • In some cases, the WGA says agents take 80 percent of packaging fees that are paid by the studios, rather than the standard 10 percent of a writers’ income.
  • The lawsuit was dropped after the agencies refused to sign the WGA’s code of conduct, which banned packaging fees.

Lawsuit Filed

The Writers Guild of America filed a lawsuit on Wednesday against four major talent agencies in a fight over writers’ wages and unfair competition practices.

The Guild and eight other writers, including The Wire creator David Simon, filed the complaint in a California superior court against William Morris Endeavor, Creative Artists Agency, United Talent Agency, and ICM Partners.

The main issue at hand focuses on “packing fees.” These are deals that allow agents to be paid directly by studios for bringing clients together on a project, instead of having agents receive a standard 10 percent of a writers’ income.

According to the WGA, the Big Four agencies currently receive about 80 percent of the packaging fees that are paid by studios.

One plaintiff, Meredith Stiehm, who created the CBS police drama Cold Case, said that after about six years with CAA, she learned that the agency made 94 cents for each dollar she made from the show.

That is indefensible,” she during a press conference. “An agency should make 10% of what their client makes—not 20, not 50, not like in my case, 94%. 10% is enough.”

The Claims

Along with issues about pay, the writers are also concerned about other ways the industry operates. For instance, they take issue with the trend of agents becoming producers themselves, which creates conflicts of interests.

In the lawsuit, WGA makes two legal claims: that packaging fees violate state fiduciary duty laws, and that those fees violate federal unfair competition laws.

First, under California state law, talent agents are considered fiduciaries. This means they are bound to represent writers, without conflicts of interest. Second, the Guild says that packaging fees constitute illegal “kickbacks” to agents, which would be a violation of both state and federal law.

The lawsuit cites the Taft-Hartley Act, a federal law passed in 1947. The anti-kickback section of the act prohibits “any employer or association of employers to pay, lend, or deliver, or agree to pay, lend, or deliver, any money or other thing of value … to any representative of any of his employees who are employed in an industry affecting commerce.”

Lawyers for the WGA argue that agency packaging fees fall under this ban.

“The plaintiffs will seek a judicial declaration that packaging fees are unlawful and an injunction prohibiting talent agencies from entering into future packaging deals,” Tony Segall, general counsel for the Writers Guild of America West, said in a statement announcing the lawsuit.

“The suit will also seek damages and repayment of illegal profits on behalf of writers who have been harmed by these unlawful practices in the past,” he added.

How We Got Here

The WGA has been trying to address this issue in recent days. The writers and agents have been without an agreement to govern their relationship with each other since one expired last weekend.

In fact, the WGA had even drafted a code of conduct for agencies that calls for the banning of packaging fees. Around 95 percent of the Guild’s members voted in favor of implementing it and the Guild then asked agencies to sign it. The Big Four agencies refused.

At one point during negotiations, Talent Agencies offered writers a 1 percent cut of their production fee money, but the Guild says that proposal was unacceptable.

On Saturday, the WGA told writers to fire agents who refuse to sign the union’s code of conduct. Some writers complied and have posted images of the letters they had sent to their agents. The letters say that under union rules, they can’t be represented by the agency until a negotiation is reached.

WGA West President David Goodman said the lawsuit shouldn’t come as a surprise to anyone. “We always had this as part of our strategy,” he said.

“The lawsuit is really at attempt to try and address the situation and make agencies realize this has to be fixed. It wasn’t a matter of the negotiations falling apart and then there was a lawsuit. It’s all part of the same thing.”

Defense

The Association of Talent Agents stands by the packaging fees. In its FAQ sections, the ATA writes, “Packaging agencies help assemble a show’s creative elements before the show is pitched to potential buyers and continue to service the show during its lifecycle.”

If packaging fees were to be eliminated, the ATA says “those packaging fees likely would not be redistributed in any way to talent.

The ATA also noted that United Talent Agency’s analysis found that its writers earn more money on shows that the agency packed and less on shows that it didn’t.

They issued a response to the lawsuit late Wednesday saying, “This development is ironic given that the guild itself has agreed to the legitimacy of packaging for more than 43 years. Even more ironic is the fact that the statute the WGA is suing under prevents abuses of power and authority by labor union leaders, even as the guild has intimidated its own members and repeatedly misled them about their lack of good faith in the negotiating room.”

What now?

Neither side appears to be willing to budge on the issue. The WGA says negotiations can continue as the lawsuit moves forward, with Goodman saying the WGA is waiting for the ATA to make contact with his team.

Without a deal soon, Hollywood productions could be stuck in limbo, leaving thousands of writers without work and hundreds of studio projects on hold.

“The agencies are the ones who’ve made it clear that they’re not taking it seriously. If they’re ready to do that, we’re here,” Goodman said.

The WGA has released a list of agencies that have agreed to their code of conduct and can represent its members. However, the Big Four agencies dominate much of the industry.

The tension unfolding between both parties is unprecedented and a meaningful agreement could change the industry practices for years to come.

See what others are saying: (Deadline) (The Hollywood Reporter) (The Washington Post)

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Joe Rogan Says Grimes Did Not Give Dave Chappelle COVID-19

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  • Comedian Dave Chappelle is under quarantine after testing positive for COVID-19. He is asymptomatic and his remaining shows in Austin, Texas have been canceled.
  • The news comes just days after Chappelle was photographed with Joe Rogan, Elon Musk, Grimes, and several others backstage at one of his Austin performances.
  • “Because people are asking, I was not exposed to the person who had covid and I have tested negative every day this week,” Rogan wrote on Instagram Friday. “Also, the person that gave covid to Dave was NOT Elon’s partner @grimes.”

Chappelle Tests Positive

Comedian Dave Chappelle has tested positive for coronavirus and is currently under quarantine, according to one of his representatives.

In a statement to The Hollywood Reporter, that rep also confirmed that he is currently asymptomatic and has canceled all of his remaining shows at Stubbs Waller Creek Amphitheater in Austin, Texas.

“Chappelle has safely conducted socially-distanced shows in Ohio since June 2020 and he moved those shows to Austin during the winter,” the statement read.

“Chappelle implemented COVID-19 protocols which included rapid testing for the audience and daily testing for himself and his team. His diligent testing enabled him to immediately respond by quarantining, thus mitigating the spread of the virus,” it continued.

Joe Rogan Speaks Out After He Was Photographed With Chappelle

Two of the remaining Austin shows were supposed to include fellow comedian Joe Rogan. Rogan took to Instagram Friday morning to announce that they will be rescheduled as soon as possible.

Still, many fans had questions about Rogan’s current state of health. The news of Chappelle’s positive test comes just days after he was photographed maskless with Rogan, Tesla CEO Elon Musk, musician Grimes, and several others backstage at one of his Austin performances.

Since Grimes, who is also in a relationship with Musk, recently had COVID, many were concerned that she may have exposed the group. Others wondered if Chappelle may have spread it.

Rogan eventually updates his Instagram caption to dismiss the ideas.

“Because people are asking, I was not exposed to the person who had covid and I have tested negative every day this week,” he wrote.“Also, the person that gave covid to Dave was NOT Elon’s partner @grimes.”

See what others are saying: (The Hollywood Reporter) (CNN) (AP News)

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Netflix Passes 200M Subscribers as Other Streamers Struggle With Retention

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  • In a letter to shareholders, Netflix said it has hit over 200 million subscribers following a successful year of growth.
  • The pandemic gave Netflix a significant subscriber boost in March and April. The company continued to perform well even in its final quarter, gaining 8.5 million subscribers when it was only projected to add 6 million.
  • The data also highlights how relatively unaffected Netflix has been by new streaming services entering the market. While companies like Disney+, HBO Max, and Peacock continue to grow, they also struggle to retain the subscribers that sign up.

Netflix Passes 200 Million Subscribers

Netflix has topped 200 million subscribers following a year of strong growth in 2020.

In its Tuesday letter to shareholders, Netflix announced that it added 8.5 million subscribers in its fourth quarter. This exceeds projections, which estimated the streaming giant would only add around 6 million. In total, Netflix gained 37 million new memberships throughout 2020, bringing the company to 203.6 million subscribers.

Pandemic lockdowns gave Netflix a substantial boost in March in April. In the company’s first two quarters, it added a combined 25.7 million subscribers. According to data from the letter, Netflix had added over 10 million more subscribers by May of 2020 than it had by May of 2019.

When it comes to the success of their fourth quarter, Netflix pointed to shows like “Bridgerton” and “The Crown.” The fourth season of “The Crown” hit the platform in November, prompting many to return to older seasons of the show. Netflix claims the series has been viewed by 100 million households since it first aired in 2016.

Success Amid Growth of Competition

The year 2020 could have been a difficult one for Netflix as new streaming services entered the market. Disney+, Apple TV+, HBO Max, Peacock and more have all made waves with their original programming or by taking some of their brand’s content from Netflix to host on their own site. User-based content on YouTube and TikTok also became increasingly popular throughout the pandemic, further posing as a threat to Netflix. 

Still, it reached a massive milestone. 

“Our strategy is simple: if we can continue to improve Netflix every day to better delight our members, we can be their first choice for streaming entertainment,” Netflix said in the letter. “This past year is a testament to this approach.”

Netflix potentially sees Disney+ as the biggest competitor among new platforms. In its letter, the company noted that the streamer added 87 million subscribers in its first year. In a Q&A, Netflix CEO Reed Hastings seemed enthusiastic about this competition.

“It’s super impressive what Disney’s done,” he said. “It’s going to be great for the world that Disney and Netflix are competing show-by-show, movie-by-movie. We’re very fired up about catching them in family animation, maybe eventually passing them, we’ll see. It’s a long way to go just to catch them, and maintaining our lead in general entertainment that’s so stimulating like ‘Bridgerton,’ which I don’t think you’re going to see on Disney anytime soon.”

Streamers Struggle with Retaining Subscribers

Even as new streamers have had impressive years, there is one hurdle that many are still struggling to jump over: retaining the subscribers who sign up. The Los Angeles Times named Disney+, HBO Max, Peacock, and Apple TV+ in particular, writing that people create accounts with these services, watch the TV shows or movies they are interested in, and cancel once they are done.

An October survey from Deloitte said that 46% of respondents canceled at least one streaming service in the last 6 months, which is up 20% from January of last year. Most who had canceled said they did so because they had finished watching whatever programming it was that brought them to that service. 

Places like Disney+ and HBO Max are really vulnerable to this because they have banked on drawing people in with exclusive marquis titles like “Hamilton” or “Wonder Woman 1984.” However, since they are newer, they are still building their original programming catalog, meaning that people can quickly burn through highlight titles. 

See what others are saying: (Los Angeles Times) (Wall Street Journal) (The Hollywood Reporter)

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Paramount+ To Launch March 4

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  • ViacomCBS is launching Paramount+ in the United States and Latin America on March 4 before rolling out to other markets internationally later this year. 
  • The streaming service will be a relaunch and expansion of CBS All Access. It will include content from Nickelodeon, MTV, and more on top of the CBS-focused selection. 

Paramount+ Gets Launch Date

ViacomCBS will be launching its streaming service Paramount+ in the U.S. and Latin America on March 4 before rolling out in more countries throughout the year. 

It will be an expansion and rebrand of CBS All Access, the service the company currently offers that is used by nearly 8 million subscribers. Paramount+ will go beyond the CBS-centric content promoted there, including works from brands like Nickelodeon, MTV, BET, Comedy Central, and the Smithsonian Channel.

More details about their streaming strategy will be released during an investor event on February 24. Right now, ViacomCBS is boasting that the service will have over 30,000 episodes and movies in their catalog, which will also include live sports and breaking news. 

“The Paramount brand is known and loved all around the world, and is synonymous with great entertainment. It’s always brought people together, which makes it a perfect fit for a streaming service that’s uniquely positioned to do the same,” Josh Line the chief brand officer of ViacomCBS said during a brand announcement in September. “The Paramount+ streaming service will elevate ViacomCBS’ iconic family of brands.”

State of the Streaming Wars

Paramount+ has already announced a slew of original projects including a revival of “iCarly” and a series about the making of “The Godfather” titled “The Offer.”

The service is entering an already crowded battlefield as the streaming wars wages on. It will have plenty of uphill battles to fight since brand recognition for Paramount is not nearly as strong as it is for studios like Disney or NBCUniversal. It will also have to compete with Netflix, which leads the pack in subscribers and unveils new content regularly; HBO Max, which will be home to Warner Media’s new theatrical releases; and Hulu, which hosts original content as well as shows currently airing on cable and network television. 

ViacomCBS has not released information on pricing, but that will likely come during or before the February investor event.

See what others are saying: (Variety) (Deadline) (CNBC)

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