November 17, 2020
On Wednesday, November 11th, three weeks after our last proposal to them, CAA informed the WGA that they have placed their production entity (wiip) into a blind trust for an eventual sale. They determined, unilaterally, that this action discharged the remainder of CAA’s obligations under the UTA/ICM franchise agreement and that the Guild was, therefore, obligated to sign CAA to that agreement. They concluded by threatening to sue the Guild if we didn’t accede to their position by the end of the day yesterday, Monday, November 16th.
For the second time in the past few months, CAA has chosen to negotiate this deal from both sides of the table, as if it were possible to reach a settlement with the WGA without ever consulting us on the terms. That is not how negotiations work. Nor will the Guild be held to arbitrary deadlines. Nor is it helpful to take additional legal action—such as the request for an injunction CAA filed this afternoon–in the middle of a complex conversation about untangling CAA’s conflicted corporate structure.
CAA’s latest proposal is a step forward. But it does not, in and of itself, fully protect writers’ interests. In some ways, it may even complicate the path forward to a deal. CAA has signed itself to an irrevocable trust without any input from the Guild. That is an act of substantial hubris. In return, we intend to act responsibly and to analyze their proposal in consultation with our lawyers. Until then, we will not share the full list of our concerns. But, even now, certain issues rise to the fore:
- The trust, as drafted, provides no timeline to complete the sale of wiip. But even with wiip in a blind trust, CAA remains conflicted until the asset is sold.
- CAA still fails to address our request for a system to verify long term compliance with the 20% cap.
- The trust does not provide adequate protection against TPG, which has a majority ownership stake in CAA, from also having a greater than 20% interest in an affiliated production entity. That is a conflict of interest pure and simple. It is clearly prohibited by the franchise agreement, and we will not permit CAA to exercise an end-run around the protections of that agreement by exempting their equity owners.
Together, the Guild and its members have spent the last nineteen months in an ongoing struggle to end the conflicts of interest that have become embedded in the agency system. For much of that time, and even as we made steady progress toward our goal, CAA was the one agency that refused to speak to us and would not negotiate. As we have made clear from the moment they finally returned to the table, we will not now make a deal with them that undermines what we have already achieved. That is not changed by the fact that CAA is more conflicted than other agencies, nor by threats of specious lawsuits and arbitrary deadlines. To the contrary, that CAA’s business structure creates deep and fundamental conflicts of interest that do not exist at any talent agency we have already franchised makes it all the more important that we exercise due diligence, take seriously our fiduciary obligations to our members, and respond in proper time to this latest offer.
As an additional update, the WGA sent a proposal to WME on October 16th, but we have not as yet received a counter from them. To reiterate, until further notice, WR23 remains in effect with regard to both CAA and WME.
We will let you know when there are significant developments. In the meantime, please stay safe.
WGA Agency Negotiating Committee
Chris Keyser, Co-Chair
David Shore, Co-Chair
Meredith Stiehm, Co-Chair
Deric A. Hughes
Tracey Scott Wilson
Patric M. Verrone
Beau Willimon, President WGAE, ex-officio
Kathy McGee, Vice President WGAE, ex-officio
Bob Schneider, Secretary-Treasurer WGAE, ex-officio
David A. Goodman, President WGAW, ex-officio
Marjorie David, Vice President WGAW, ex-officio
Michele Mulroney, Secretary-Treasurer WGAW, ex-officio