“Over the past few months, according to the Guild, the WGA, the CAA and its private equity owner TPG have negotiated the steps the agency must take to obtain the franchise agreement (i.e. the sale of Wiip) and the safeguards to address the unique conflicts of interest that constitute TPG`s ownership of CAA. There are three layers of additional protection for writers that were negotiated in the letter (read the full here). The deal marks a hard-won victory for the guild, which two years ago wanted to end the practice of producers paying agencies to wrap writers in deals. The guild argued that the usual practice for decades has led agencies to crack down on their clients` salaries. If a similar agreement can be reached with WME, the victory is total. With respect to the issue of agency involvement in film financing, we want to understand the WGA`s concerns in this important area for all of our clients, our company and the industry in this important area, and what the WGA process is in terms of securing funding for films with a budget of more than $50 million. Over the past five years, CAA has secured funding and established critical partnerships for more than 300 filmed projects to ensure they are produced, distributed and marketed. As a result, countless authorship work has been produced and thousands of jobs have been created. We want to ensure that any future process does not lead to missed opportunities for WGA members and the industry as a whole. But to be clear, to speed up this agreement, we accept its current wording on film financing and we will work with the guild to find out what is best to continue making such films.
The franchise agreement and code of conduct also contain important provisions on how agencies should represent writers, provide timely information to the WGA on the application of the collective agreement and individual authors` agreements, and promote non-discrimination and inclusion. CAA`s ceasefire with the guild leaves WME as the only major agency not to have signed the guild agreement; The Guild and the United Talent Agency reached an agreement in July. The CAA`s relaxation with the union leaves WME as the latest talent agency at odds with the WGA on franchise rules introduced in April 2019. The Guild has prohibited agencies from obtaining packaging fees for TV series and from having interests of more than 20% in production and distribution assets. This action sparked a dispute last year between CAA, WME, UTA and the WGA. UTA closed the case and signed with WGA in July. The franchise agreement (published below) contains a subsidiary letter that addresses the thorniest issue in the CAA WGA negotiation: the fate of Wiip, CAA`s affiliated production company. CAA held a majority stake in the company, but in the hope of accelerating an agreed deal to transfer its ownership to a blind trust.
Under the ancillary letter agreement, the Trust must give up the share to meet the 20% ownership limit until a specified date. (The date must be kept secret to protect the marketing of the asset.) “We have submitted the signed agreement to the WGA and expect it to be distributed soon to the relevant members of the negotiating committee as well as to members,” the statement said. “There is a change that we have anticipated that we believe the WGA will be able to accept. Regarding our investment in the affiliated production company wiip, we offer a convenient commercial deadline to comply with the 20% ownership limitation contained in the agreement. We are unequivocally committed to compliance. The fact that CAA and the WGA could not better resolve the broader conflict caused personal and professional damage to many relationships and cost the guild and agencies millions of dollars.