Transcription
Peak TV. 500 original shows and counting. Box office records shattered every year. The entertainment industry is enjoying unprecedented prosperity.
But TV writer weekly pay has fallen. The decline is in overscale income, the chunk the agencies negotiate. So what's going on here?
Part of the reason is that agencies, dominated by the Big Four, have shifted away from the traditional 10% model to one focused on packaging fees and now producing. These practices are conflicts of interest that hurt all writers, here's how.
When a writer creates a show, and a studio wants to produce it, this is how the traditional compensation process works. First, the agency negotiates the up-front pay for the creator. It takes a 10% commission for as long as its client remains with the show. If the show is successful, there are profits. It's typical for the creator to get somewhere around a 10% cut over the life of the show. And her agency earns the same commission on those payments. Under this traditional arrangement, the more the creator makes, the more the agency makes. This leads the agency to get the best deal possible for their client.
A packaging deal, by contrast, sounds like a good thing for the creator because she no longer has to pay a commission to her agency. But that's because the agency is cutting a side deal with the studio in exchange for bringing in the show idea, and in some but not all cases, an actor or producer. In return, they're taking 3% of the base license fee. This usually ranges from $30,000 to $75,000 an episode. Money that could be used to make the show better, hire additional writers, or pay them more.
If the show ends up earning a profit, the agency takes 10% off the top. If the writer's contract also entitles them to 10% of the profits, that's calculated against the money that's left after the agency has taken its entire share. Packaging puts the agency in direct conflict with their client. Not only can they potentially outearn the creator, they can expect to make more when she makes less.
But packaging doesn't just affect creators. It affects every writer on staff. Because the agencies are paid the same fee no matter what, their clients' salaries don't affect their bottom line at all. And without the incentive to protect them, those salaries have dropped. In fact, mid-level writers have shown the greatest drop in income, and many entry-level writers spend years working for the minimum weekly rate and not getting paid for scripts.
Meanwhile, with the agencies so focused on TV packaging fees, screenwriters get almost no protection from free writing, late pay, and other abuses in the movie business. But it gets worse. Packaging means the agencies get a cut from the studios. When they produce shows, they become the studios. WME, CAA, and UTA have already launched production arms. When your agency is also your employer, the conflict of interest is clear and flagrant. An agency is literally negotiating with itself. Every dollar their client gets is a dollar the agency can't keep.
According to Endeavor CEO Ari Emanuel, potential abuses could be checked by a client's attorney or accountant. In other words, his clients can pay someone else to keep him honest.
While Studios and Agencies post record profits, writers are making less money because conflicts of interest incentivize agencies to do what's best for them instead of what's best for their clients. This situation is bad, and it's getting worse. To find out what the Writers Guild of America is doing about it, click here.