Hollywood is subject to the same destructive capitalist pressures that have impacted the rest of the country, whether it be the liquidation of brick and mortar stores for parts at the expense of workers or the price gouging that has spread through the healthcare industry like a disease.
Private equity is destroying America. And Hollywood is no exception.
The Writers Guild of America is currently in a feud with their agents regarding packaging. This is yet another round in the familiar struggle of workers being unfairly compensated for their labor thanks to corporate behemoths.
“Packaging” means that agents are paid a fee if a film or television production uses multiple clients from their agency. When an agency packages a production, they receive a “packaging fee” which can involve payment throughout the life of a production for simply using their rolodex. A packaging fee can be as much as a 3% licensing fee up front, a 3% deferred licensing fee, and 10% of gross profits in television, and 5% gross profits for feature films.
The agencies are being paid as producers without doing the actual producing. In some cases, they make more money than the creators of a show.
Agents are chasing packaging fees at the expense of their clients. Some are even establishing their own production companies to increase their potential packaging profits. This is a clear conflict of interest.
Many writers, especially the younger and lesser-known, have seen their income fall dramatically as packaging profits have soared. Wages for young writers and assistants have been stagnant. Aspiring writers, directors, and actors who are not represented by the big four agencies are presented with yet another barrier to entry thanks to packaging practices.
The big four agencies, CAA, WME, UTA, and ICM, have spread the scope of their business far beyond their job as agents, effectively creating a cartel that is often in negotiations with itself. These agencies have recently received billions in venture capital funding to help support and expand this process of self-dealing at the expense of workers.
The WGA has had enough. Writers are condsidering leaving their agents en masse in April if they will not end their packaging practices and return to acting as their representatives in good faith. They will be asking the Association of Talent Agents (ATA) to sign a code of conduct to this effect.
The Democratic Socialists of America, Los Angeles Hollywood Labor Project stands with the WGA, a guild that represents all screenwriters who work on union shows. We recognize an injury to one in the entertainment industry is an injury to us all, and that if the powerful unions like WGA don’t stand up to greed, then the crafts with less leverage have little hope for a fair deal in this era of private equity and corporate consolidation.
As socialists we also understand the importance of exposing the excesses of capitalism and the persistent income inequality that places capital in the hands of a small, idle managerial class.
We applaud the efforts of the WGA to be fairly compensated for their labor and we extend solidarity to the writers who may be asked to make sacrifices to improve the well-being of the entertainment industry as a whole.
Democratic Socialists of America - Los Angeles, Hollywood Labor Project