Movie packaging

In film industry terminology, movie packaging or film packaging is a type of product bundling where a top level talent agency starts up a film or television project using writers, directors and/or actors it represents, before giving other agencies a chance to submit their clients for the project. For this service the talent agency negotiates a packaging fee. Instead of collecting the usual 10% fee from individual clients, the agency receives the equivalent of 5% of what the studio or network pays the production company; 5% of half of any profit the production company earns; and 15% of adjusted gross (syndication revenue minus costs the network does not pay).[1][2][3]

Packaging can be much more lucrative for agencies than the usual 10% fee; in 1989 The New York Times reported that a major agency could earn $21,000 to $100,000 for each episode of a network show.[1] Packaging is frequently done by the major talent agencies Creative Artists Agency, ICM Partners, United Talent Agency, and William Morris Endeavor.[2] Although packaging has existed since the Golden Age of Radio, in the late 1970s Michael Ovitz of CAA was the first to package movies.[1] WGA West estimated that 87% of TV shows were packaged during the 2016-2017 season.[4]

Packaging as a practice has been criticized by several writers, directors, and actors as inherently causing a major conflict of interest between the agency and its clients.[5] In 2019, David Simon published a letter detailing how packaging incentivized his agents to work against his best interests on the deal for Homicide: Life on the Street.[6] Simon's letter eventually led to a breakdown between the WGA and the ATA when the sides were unable to negotiate a "Code Of Conduct" agreement that addressed the concerns of packaging, resulting in the mass firing of talent agents by all WGA members on April 15, 2019.[7]

On April 17, 2019, the two Writers Guild of America groups, WGA East and WGA West, sued the "big four" packaging agencies, claiming that packaging fees are an “egregious conflict of interest” that “constitute unlawful kickbacks” from the studios to the agencies.[8]

The lawsuit was filed in Los Angeles Superior Court against the four dominant Hollywood talent agencies: William Morris Agency, Creative Artists Agency, United Talent Agency and ICM Partners.[9] Approximately 95 percent of WGA members voted "in favor of a code of conduct that would cease packaging fees."[10]

References
  1. Davis, L. J. (1989-07-09). "Hollywood's Most Secret Agent". The New York Times. ISSN 0362-4331. Retrieved 2019-04-13.
  2. Koblin, John (2019-04-12). "Hollywood Upended as Unions Tell Writers to Fire Agents". The New York Times. p. B1. ISSN 0362-4331. Retrieved 2019-04-13.
  3. "'But I'm not a lawyer. I'm an agent.'". The Audacity of Despair. Mar 18, 2019. Retrieved Jan 4, 2020.
  4. Ng, David (2019-03-13). "Hollywood writers consider firing their agents en masse". Los Angeles Times. Retrieved 2019-04-14.
  5. "Explaining Conflict of Interest". JohnAugust.com.
  6. "'The Wire' Creator David Simon Rips "Greedhead" Agencies Over Packaging, Urges Lawsuit Against ATA". The Hollywood Reporter.
  7. "Inside the Final WGA-ATA Meeting Before Breakdown As Balance Of Power Shifts To Rank-And-File Writers". Deadline.
  8. "WGA: More Than 7,000 Writers Have Fired Their Agents". Deadline.
  9. Littleton, Cynthia; Donnelly, Matt (2019-04-17). "GA Sues Talent Agencies in Battle Against Packaging Fees". Variety. Retrieved 2019-06-29.
  10. Donnelly, Matt (2019-04-22). "Writers Guild Says Over 7,000 Members Have Fired Agents". Variety. Retrieved 2019-06-29.
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