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WGA Ratchets Up Legal Fight, Claims Agencies Use Mob Tactics

It's been used to put mob bosses from Junior Soprano to John Gotti on trial. Increasingly, the RICO Act is being used as a basis for civil suits.

The Writers Guild of America

The Writers Guild of America

WG

The Writers Guild of America ratcheted up its fight against three major talent agencies Monday when it countersued WME, CAA, and UTA under a law that’s used to throw mob bosses in jail.

This consolidates the WGA-agency fight into one venue: US District Court. The union filed its initial lawsuit in state court in April, but withdrew that complaint Monday.

The WGA alleges that the practice of packaging constitutes racketeering and violates antitrust laws. Packaging is when agencies bundle a project/script with talent from its ranks to sell a movie or TV show. Production companies pay a fee to the agency for that service.

It’s at the heart of the dispute that reached a head in April when 7,000 Hollywood writers fired their agents after the big agencies refused to budge on the practice — which the union wants to see abolished.

“What began as a service to writers and other artists in their negotiations with the production companies has become an unlawful price-fixing cartel dominated by a few powerful talent agencies that use their control of talent first and foremost to enrich themselves,” the filing reads.

The countersuits are being brought under the RICO Act — the charge the FBI used to put Junior Soprano on trial in “The Sopranos” and, in real life, used to convict mob boss John Gotti. In recent years the statute has been increasingly used in civil suits against large corporations.

The WGA’s Monday action was its countersuit in response to CAA’s July 1 lawsuit. Countersuits against the two other agencies are similar and the three separate cases could likely be consolidated by a judge.

On the agencies’ side, CAA alleged that the guild has orchestrated an unlawful boycott of the agencies, unreasonably restricting competition for the representation of writers — after firing their big-agency representation, many writers signed on at smaller agencies that have agreed to abandon packaging.

Underlining all of this is the over $3 billion in private equity investment that WME, CAA, and UTA have absorbed in the last 10 years. The WGA argues that Wall Street influence — and dreams of an IPO — have shifted the agencies’ mission of serving clients.

As the guild doubled down on its commitment to fight the agencies in court, a contingent of influential writers continues to push back against the strategy. They’ve formed a slate that seeks to topple the current WGA leadership in an upcoming board election.

It’s led by “Carol” scribe and presidential candidate Phyllis Nagy, who says the strategy of negotiating with smaller agencies individually will not lead to long-term results. She wants the guild to be open to negotiating on packaging.

“As long as we refuse to acknowledge that packaging continues to exist in our absence, with stars, directors, producers and IP at the center, we will find ourselves on the other end of this action as writers-for-hire in a system that will permanently destroy the primacy writers have enjoyed in television,” Nagy wrote on a Monday post on the slate’s website.

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