The Indicator from Planet Money - The Pen Is Mightier Than The Suit

The Hollywood Writers Guild just declared victory in their fight with talent agencies. Who do they have to thank for their historic win? Among other factors, possibly ... the pandemic?

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Content Keywords: Writers Guild of America agents
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the indicator from Planet Money. I'm Stacey Vanek Smith, Lexi Horwitz. Gotta see this terrible pandemic year has been a good year for anything. It's been pretty good for binging television watch more television in the last year than I have in the entire rest of my life combined. We have a story about how that insatiable appetite for new content paired with a production stopping Global pandemic may have helped tip the scale on a Hollywood power struggle that's been going on for nearly two years. We are not talking about Godzilla versus King Kong, although that is a compelling battle. This is actually a labor fight between the big Hollywood talent agencies and The Writers Guild of America, which is the union that represents film and television screenwriters around the country built. Tell the story of the Titanic class. We called up John August. Who's the co-host of Beast

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Notes podcast a better and screenwriter of films like big fish and Charlie's Angels and most importantly for our purpose.

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Member of The Writers Guild of America's negotiating Team Green play style. Like what's the world before this conflict look like Zoe normally would open on how the world is a for the hero shows up and it's a world in which you know, there are Studios that are hiring writers and their agents or helping writers get those jobs Asians acted as the middleman of the entertainment industry connecting all the creative types like the directors the actors in The screenwriters to the movie studio TV network Executives. And the way that agents have traditionally gotten paid is by charging a 10% Commission of whatever salary they're able to negotiate for their clients, which means that the agents Financial Fates have been aligned with those of their clients, but John explains that model has also represented a kind of frustrating business limitation for the agency's ability to grow.

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Roast in an industry where we have Netflix going to know to understand Lisa subscribers since the 1980s agencies have relied more and more on a different and often more lucrative kind of financial Arrangement something called packaging instead of teaching one of their brighter clients to a studio in hopes of getting a 10% commission agencies would now offer that writer is part of a package of people they represented along with a director and Ben actor basically offering all the ingredients for a show in exchange. The agency would get a feed directly from the network and a cut of any profits but as more and more writers began to point out in recent years this packaging fee model also met the agencies were no longer incentivize to fight for the highest possible pay for their individual clients instead. The agency's main interest was in selling a whole package of talent irrespective of what the individual people inside. It got paid. This was a big change.

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But John says there has been an even bigger shift over the last decade as Wall Street private Equity firms decided that it was time for them to get into the entertainment business and they invested hundreds of millions of dollars to supercharge some of these talent agencies and that shift came with new debt and all this pressure that push the agencies to find ways to make even bigger money sort of what if we got shoes make shows ourselves and so they started for music production entities where they were actually making shows for rock house or specially for streamers who started becoming employers of their own clients. And so, you know, some of your agent is not just the person representing your side of the deal. They're also really a person of the other side of the deal and that's about as clear as you could imagine. Where is Green play. This is the moment where the oppressed writers decide to revolt against the agencies in about 3 years ago. They demand a renegotiation of this whole system.

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The agency's on surprisingly resistant, but finally in April 2019 The Writers Guild of America decides. It's going to use the nuclear option and some 7,000 writers across the country all fire their agents at once the relationship between writers and agents in Hollywood and scary for me and probably for all writers just because we're headed to touch Uncharted Territory what that Uncharted Territory look like after the break

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So let's meet at the same. The writers have fired their agents on mass the agencies. Sue the Union in retaliation The Writers Guild shoes back then everyone digs in for a protracted fight. Meanwhile, John August says the writers now have to navigate to Hollywood labor market without an agent which was pretty daunting. It was scary to think Valley trying to get new jobs without an agent who just had always had what it says is that alright as quickly developed this kind of informal Network to help writers and employers find each other and as the first major television season rolls around it seems like the labor market was working well enough without the agents that the informal networks in the new system put in place by the guild. We're keeping TV production humming, but they're not actually crucial to the whole process started to break Rank and make agreements with the Writers Guild because unlike their Titanic Brethren many of these smaller agencies.

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Taxi companies or rely on those packaging fees for their business model and for a while it seemed like this might just be the new way in Hollywood film and TV writers would rely on informal networks and smaller agencies to make the labor market work while the big agencies continue to make their money without the writers packaging their other clients and producing their own content.

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Else happened last year at Hollywood hard because immediately all Productions. It was impossible to shoot new things. But the one area that wasn't so greatly impact was writers because it's keep working on TV show's writers keep riding movies and so a bunch of stuff. It rings during that time and weather supposed to be paid during that time. There are four big agencies that dominate Hollywood for big acronyms CA a u t a i c M & W M E then these big fish have been expanding in some cases using private Equity funding to acquire properties like the Miss Universe Pageant and the Ultimate Fighting Championship and they actually ended up being more vulnerable to be pandemics impact on the economy and live entertainment and wrestling and they had all these things were shut down because of the pain down neck writing was the only thing I was still happening. So the agencies would have sent it to you were at a huge Advantage because

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They still had money coming in the door eventually help the crack what it seems like an intractable stalemate just a year earlier and help shift the power towards the writers and their negotiations readers writers were holding together really? Well, the agencies weren't holding together as well because the agencies are usually at each other's throats. And so we end up having individual conversations with each state agencies and figure out what their priorities were. And also they were able to sign UTI for the first the big four agencies to sign and not sure if set the timing is emotion the first big fish UTA United talent agency made a deal with the Writers Guild last July agreeing to gradually Fades away from the packaging fees model and to cap its ownership of production companies at 20% to mitigate conflicts of interest to the other big fish were hooked in August and December and finally last Friday the very last holdout of holly.

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Agencies WME announced that it had reached an agreement with the Writers Guild of America resolution on a tube a composite interest. This is the part of the screenplay where the hero of the story finally returns to a World War peace and Order have been restored but the hero has also of course been transformed by the trials and tribulations of the journey. And so I asked John August what had changed about the writers in the course of this fight Watauga character tag agency agency. It means a character can make choices for themselves and really take action on their own behalf and paradoxically I think writers themselves haven't felt a lot of agencies during this time. Why does Hatchet work with each other to figure out how to get stuff done for the writers kind of took back their agency along with their agent. Absolutely the writers discover. They had a to see all along

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This episode of the indicator was produced by Alexi Horowitz Ghazi and Mill Huxtable. It was fact-checked by Sams. I the indicator is edited by Patty Hirsch and is a production of NPR.
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