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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).
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. Packaging is frequently done by the major talent agencies Creative Artists Agency, ICM Partners, United Talent Agency, and William Morris Endeavor. Although packaging has existed since the Golden Age of Radio, in the late 1970s Michael Ovitz of CAA was the first to package movies. WGA West estimated that 87% of TV shows were packaged during the 2016-2017 season.
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. 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. Simon's letter eventually led to a breakdown between the WGA and the Association of Talent Agents (ATA), the group representing the major agencies, 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.
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.
The lawsuit was filed in Los Angeles Superior Court against the four dominant Hollywood talent agencies: William Morris Endeavor, Creative Artists Agency, United Talent Agency and ICM Partners. Approximately 95 percent of WGA members voted "in favor of a code of conduct that would cease packaging fees."
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