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ALEXI HOROWITZ-GHAZI, HOST:
A couple of weeks ago, I went to visit the TV writer David Simon at a little black box theater in New York.
David, hey - Alexi. How are you?
DAVID SIMON: Are you ready?
HOROWITZ-GHAZI: Yeah. I think we're just going to use this room. I don't know if you got...
David is the writer of big-time TV shows like "The Wire," "Treme," "The Deuce."
So I'm wondering, you know, you're a screenwriter (laughter). You've written a lot of episodic television. Where do you think this story begins? What's the establishing shot?
SIMON: The establishing shot is probably me on the rewrite desk at The Baltimore Sun.
HOROWITZ-GHAZI: It's the late 1980s. The young David Simon still has some hair on his head. Right now he's just a humble newsman on the police beat.
SIMON: I thought I was going to be a newspaper reporter, and I thought I'd probably stay in Baltimore if the paper stayed good. And I'd write books every few years. And, you know, I just wanted to be a journalist.
TED ROBBINS, BYLINE: But in the early '90s, David Simon gets around to writing his first book - "Homicide: Life On The Killing Streets" (ph). He gets an agent, who tells him there's a good shot this could sell in Hollywood. So his agent teams up with another agent at one of the biggest outfits in the entertainment business - this place called Creative Artists Agency or CAA.
HOROWITZ-GHAZI: And eventually, David hears that a big A-list director wants the rights to his book - a guy named Barry Levinson. He makes an offer to turn David's book into a new NBC TV series.
SIMON: And because I'm from Baltimore and, you know, trust no one (laughter), you know, I sent it to a couple of other authors who had sold stuff.
ROBBINS: He finds out it's kind of a lowball deal. But after some complicated wrangling back and forth, he gets a little more money.
HOROWITZ-GHAZI: And "Homicide: Life On The Street" goes into production, runs for seven seasons and David learns how to write for TV.
SIMON: Cut to years later - I'm now getting ready to run my own show.
HOROWITZ-GHAZI: David has an idea for a new crime drama.
SIMON: I'm now poised to earn some real money. Not just the sale of one little book, but I'm poised to get an HBO show up and running.
HOROWITZ-GHAZI: A little show called "The Wire" - no big deal. But anyway, David's now got a new agent from the same agency to handle his TV career; a guy named Jeff Jacobs or Jake. As an agent, Jake negotiates David's fee in exchange for a commission, usually around 10%. So the agent's incentive is to be solidly in David's corner, negotiating as high a fee as possible. But one day, as "The Wire" is being negotiated, Jake and David are on the phone when Jake suggests trying this different financial model - not commission; something called packaging.
SIMON: And I remember saying to him, Jake, what's packaging? What are you talking about? And he said, well, you were packaged on "Homicide." And I said, Jake, I don't know what you're talking about. What is packaging?
HOROWITZ-GHAZI: Jake explains packaging is when an agency combines a group of clients on a project. A writer, maybe an actor or director, takes that whole bundle to a studio and pitches them together. Just add water, and you have a show.
ROBBINS: And Jake says with packaging, David won't have to pay the usual 10% commission.
HOROWITZ-GHAZI: Because this whole packaging thing changes the way agents make their money. Instead of getting that commission from individual clients, the agency gets a fee from the studio and a cut of any profits just for putting together the package.
ROBBINS: But here's the catch. The agency gets the same fee, no matter how much the writer makes. And when he hears that, David realizes, wait a minute. That means his agent has no reason to get him any more money. He's just a little part of this big package.
HOROWITZ-GHAZI: So David's mad that he was already packaged without being told. But then to add insult to injury, Jake tells him that on "Homicide," his previous agent had packaged him with another one of their clients - Barry Levinson, the big director who bought the rights to his book, which means that the agency had represented both sides in the negotiation over his pay.
SIMON: Wait a minute. How do I get anybody fighting for me when the bigger client was Barry Levinson? The client you more need to appease is the A-list director, not the schmuck police reporter from Baltimore. If you were a realtor representing both sides of the deal and not telling either side, you'd lose your license in any state in the union. If you were an attorney attempting to represent both sides in a civil action without informing of the inherent conflict of interest, you'd be disbarred. How are you not in jail?
HOROWITZ-GHAZI: David was perturbed, if you can't tell, threatened to leave the agency. But Jake eventually convinces him to stay. He wasn't the agent who packaged "Homicide," and he says they'll never package David or his projects ever again.
SIMON: I was told it was a routine matter of fact and that packaging was something that was endemic and that I should just get over it.
HOROWITZ-GHAZI: David didn't really get over it. And as packaging got bigger and bigger over the next two decades, more and more screenwriters started feeling the way David did.
ROBBINS: Until finally, they decided to do something about it.
HOROWITZ-GHAZI: In April, 7,000 screenwriters across the country fired their agents.
ROBBINS: All on the same day.
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HOROWITZ-GHAZI: Hello and welcome to PLANET MONEY. I'm Alexi Horowitz Ghazi.
ROBBINS: And I'm Ted Robbins, NPR's TV editor. We are living in an era of peak television. But writers say the agents are in an era of peak greed, grabbing more than their fair share of the profits.
HOROWITZ-GHAZI: Today on the show - the battle between Hollywood screenwriters and the industry's biggest talent agencies over who gets paid for all that Netflix we're chilling to.
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SIMON: Well, in the beginning, I was a naif. I was just a "Candide"-like character, come to Paris.
HOROWITZ-GHAZI: For the less writerly among us, a naif is a naive person. "Candide" is a famously and foolishly optimistic Voltaire character. Anyway, when the young naif David Simon was first getting started in TV, he had a pretty standard idea of what agents were - well-connected middlemen who make a hundred calls a day to find out what projects are happening where; basically, connecting the creative types with the suits over at the movie studios and TV networks for a 10% cut of whatever salary they were able to negotiate.
ROBBINS: But what David discovered on that phone call was that things had changed.
HOROWITZ-GHAZI: The agencies would come to a studio with a dream team - a great writer, a veteran producer, maybe a hot movie star or award-winning director and say, why wouldn't you buy this? All you need to do is add money and make it happen. Everyone wins.
ROBBINS: By the time "The Wire" was sold, that model packaging was the new normal for Hollywood agencies, which were being led increasingly by a new kind of agent - something called a super agent, like Ari Emanuel. He was the model for Jeremy Piven's character Ari Gold on the HBO show "Entourage."
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JEREMY PIVEN: (As Ari Gold) This is now the biggest agency in the world. And I'm the head of it, which makes me the biggest agent in the world. Now, can anyone tell me why I chose to be the biggest agent in the world? It's so I can stop being a [expletive] agent.
HOROWITZ-GHAZI: Like Jeremy Piven's character, Ari Emanuel also managed to maneuver his way to the top of the agent game. He merged his company Endeavor with William Morris to become William Morris Endeavor, WME, the biggest agency in Hollywood and one of the four big agencies that dominate the industry. And then he went from being a super agent to an entertainment mogul.
ROBBINS: In part, because his rise has coincided with the infusion of hundreds of millions of dollars in private equity into the agency business over the last decade - huge funds buying stakes in the industry.
HOROWITZ-GHAZI: Ari Emanuel and his partners now own the Ultimate Fighting Championship, Professional Bull Riders, Inc. and IMG, one of the major sports and fashion agencies.
ROBBINS: In 2015, Endeavor bought the Miss Universe pageant from Donald Trump. And this year, it acquired the speaker's agency that represents Barack Obama and Bill Clinton.
HOROWITZ-GHAZI: And final twist and full-disclosure - NPR has an agreement with WME's content arm to option some NPR content for TV and film. If we were to option this very episode for a blockbuster feature-length movie, WME would have first dibs.
ROBBINS: And they'd probably kill it.
HOROWITZ-GHAZI: You think we could maybe get Adam Driver to play me?
ROBBINS: Maybe Adam Sandler.
HOROWITZ-GHAZI: Many people in the entertainment industry say all this expansion has been terrible for writers.
ROBBINS: I mean, some of the agencies - they own TV production companies. That means in some cases, they could be in the position of hiring and setting pay for the same people they're meant to represent. They're both the employers and the representatives of the employees.
HOROWITZ-GHAZI: Yeah. And these agencies, with all that private equity cash, have to chase huge piles of money now to turn a profit. And one really good way to make big money is packaging. Those packaging fees can be way more valuable than any individual client's commission.
ROBBINS: In fact, packaging fees - they've become so important to the business that writers say that the fees alone can determine whether a television show gets made at all.
KEITH POWELL: Oh, we're rolling now. Great. We're rolling now.
HOROWITZ-GHAZI: All right.
ROBBINS: Do you need some water, Keith? No, no, no. I have water right here.
HOROWITZ-GHAZI: Let's all do a collective (clearing throat).
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POWELL: Thank you.
HOROWITZ-GHAZI: Here we go. We're all clear now.
HOROWITZ-GHAZI: Keith Powell always wanted to be a screenwriter, but he got his start as an actor. The thing most people probably know him for is playing the character Toofer on Tina Fey's "30 Rock."
POWELL: I was on "30 Rock" for seven seasons as an actor, ironically enough, playing a writer.
HOROWITZ-GHAZI: It seems like you kind of took the-dress-for-the-job-you-want (unintelligible), really inhabited it.
POWELL: (Laughter) That's true. That's true.
ROBBINS: While he was playing a writer, he was also paying attention to "30 Rock's" real writers.
POWELL: I learned what worked in a writers room and what didn't work. And I kept every draft of every script. And I studied them, even if I wasn't in the episode.
HOROWITZ-GHAZI: When the show ended, Keith decided it was finally time to chase down his screenwriterly (ph) dreams.
POWELL: I pitched a show about my life to a production company.
HOROWITZ-GHAZI: Would you mind giving us the elevator pitch?
POWELL: Sure. I was introduced to a concept called pronoia. And pronoia is the opposite of paranoia - so the belief that everything is out to help you. And I'm a very cynical man (laughter). And I moved to California, where everyone is bright and chipper and happy. And my paranoid nature butts up against the pronoia nature of Los Angeles.
HOROWITZ-GHAZI: And high jinks ensue.
POWELL: High jinks ensue.
ROBBINS: Keith and the production company teamed up to pitch his show to a network, and the network said it would buy the show if Keith and his team could find a suitable showrunner. That's a lead producer to run the show.
HOROWITZ-GHAZI: After a short search, Keith managed to find a showrunner. That person was represented by a different agency than the production company, but it seemed like, after some minor negotiations, the deal on his dream show would soon be closed. He was just a few steps from getting into production. And then...
POWELL: Those agencies, neither of which represented me, became embroiled in a battle over who has the right to have the packaging fee.
HOROWITZ-GHAZI: A battle, in part, over which agency would reap the profits from the show if it were to become a hit.
POWELL: And it ultimately became so contentious that the network said, it's not worth it for us to pursue this project. These agencies didn't care if my show got made or not. So, frankly, it felt, to me, like I was a pawn.
HOROWITZ-GHAZI: Keith's show never got made.
ROBBINS: We reached out to the big agencies, the Association of Talent agencies, even Jake, David Simon's agent, to talk about all this stuff - the packaging fees, the alleged conflicts of interest. They all said, not on the record, not now. But one former agent did talk to us - Marc Pariser. He was an agent at CAA for many years. Now he's a manager. He says this has all gotten way overblown. And if the writers are worried about agents selling a story to their own agency's production arm, they should relax. There's a firewall between divisions of the parent company.
MARC PARISER: There's not only a firewall, but people are ignoring the fact that agents actually care about doing good work for their clients (laughter).
ROBBINS: He says an agent has one job - to get a writer or an actor or director the most money, period.
HOROWITZ-GHAZI: No matter what some writers may think.
PARISER: They just always assume - they have this kind of Dickensian attitude about agents, that we're all ogres that are all about something other than our clients. It's just not true.
HOROWITZ-GHAZI: But for decades, the writers had been hearing a lot of these stories - stories like Keith's and David's. And writers talk to each other. They have a union - the Writers Guild of America. David Simon is on the board of the guild. And one day last year, he went to an East Coast meeting and found out that packaging was up for debate.
SIMON: I was surprised to see it on the agenda. I said, really? We're taking on packaging after all these years of tolerating this?
ROBBINS: The union had an agreement with the talent agencies going back 40 years, saying packaging was OK. But at that meeting, they started talking about how to change that and pushed for a new agreement with new rules.
SIMON: People had finally gotten wise to the fact that this thing was, effectively, reducing the salaries of every single writer in Hollywood and that it had to be fought.
HOROWITZ-GHAZI: Negotiations over a new agreement started early this year. At that point, David says, not all of the union members were on board.
SIMON: A lot of writers didn't understand it, and the ones that were in a position to understand it were often those who were reaching the top of the great ziggurat, the Great Pyramid of leverage.
HOROWITZ-GHAZI: So David decided it was time to write a blog post...
HOROWITZ-GHAZI: ...A fiery, profanity-laden blog post chronicling his early brush with packaging and laying out an argument to rally writers to the anti-packaging cause.
SIMON: Even in this time of peak TV, where the hunger for content is the highest it's ever been, writers are not making any more money. In fact, in some categories, they're making less. Why? Because the agents aren't fighting for them because why would you bother? Why would I care about getting an extra 10% on getting you an extra $80,000 - oh, boy, I make $8,000 - when what I really can do is package a show or maybe even become a producer on a show, and I can be a player and I can play for millions?
HOROWITZ-GHAZI: Over the next two months, the Writers Guild proposed ways to end the agent's conflict of interest. The agencies countered, but they couldn't agree. Finally, last April, the guild presented an ultimatum. Do away with packaging fees and talent agencies owning production companies or lose us as clients.
ROBBINS: Still no agreement - so 95% of the guild's membership voted to authorize the nuclear option; to fire their agents all at once if they didn't comply.
HOROWITZ-GHAZI: Like many screenwriters, for David Simon, threatening to fire his agent was complicated. He had a personal relationship.
SIMON: In my experience, he is an honest broker. He's been very astute at how to thread projects through studios about what's happening in the industry. He's got his ear to the ground. He's a smart guy.
HOROWITZ-GHAZI: Would you describe yourself as friends?
SIMON: Yeah, as friends - we've been - I've known him for 20 years. It's not personal, and I'm not mad at him for being on the other side of it. It's systemic. It's not about whether I'm friends with my agent. It's about the future of my industry and the status of writers within that industry.
ROBBINS: The deadline came to sign the new code of conduct in April. And when it came, the agencies asked to delay signing. They got a week-long extension.
HOROWITZ-GHAZI: And even on the real last day, April 12 of this year, Keith Powell thought maybe, just maybe, the agencies would agree to the terms in the final hours.
POWELL: So we waited, I believe, until midnight to see if there was any word.
ROBBINS: And finally, via email, a word from the guild.
POWELL: And the word came back that the agencies did not take us seriously and that as of midnight tonight, we will ask all of our members to fire anybody who has not signed the code of conduct.
HOROWITZ-GHAZI: And sure enough, that week, the Writers Guild began collecting the signatures of 7,000 screenwriters - signatures on letters of termination. One week later, they hand-delivered those letters in bulk to the agencies.
ROBBINS: The writers had chosen the nuclear option.
HOROWITZ-GHAZI: After the break - the postapocalypse.
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HOROWITZ-GHAZI: OK, so the first wave of fallout after the mass firing of the agents was - surprise, surprise - a string of lawsuits, none of which seemed likely to resolve anytime soon. In the short term, the big thing everyone in Hollywood was worried about was how show staffing would go without agents representing the writers for this TV season. Would America get its content? Would we all be subjected to endless reruns and last-minute reality TV shows?
ROBBINS: Well, as you may or may not have noticed, the television content pipeline did not run dry in the months since the Writers Guild delivered that avalanche of termination letters.
HOROWITZ-GHAZI: Instead, showrunners, writers and TV producers reached out to each other on Twitter and Facebook, leaned on referrals and word of mouth. The Writers Guild set up a Web portal for members to find open jobs and submit their writing samples - kind of like an OkCupid for screenwriters.
ROBBINS: In the meantime, roughly 90 smaller agencies have signed the agreement with the Writers Guild to not package writers - agencies like the Abrams Artists Agency, headed by a guy named Adam Bold.
ADAM BOLD: We're kind of in a sweet spot in the respect that we don't have outside investors, so we're not responsible to anybody except for the client.
HOROWITZ-GHAZI: Adam Bold says that signing the Writers Guild's new agreement eventually just made sense. They needed to get their clients back. And for smaller agencies like his, packaging fees hadn't been a major part of the business model in the first place. His whole pitch to clients is that their agency is old school.
Do you feel like, in a way, your agency actually comes out ahead from all of this?
BOLD: Quite honestly, yeah. I mean, look. This isn't the way I would have planned it. But as it as it's worked out, it's been really good for us.
ROBBINS: And Adam says maybe what's coming is a kind of musical chairs for the entertainment industry, with smaller agencies stepping in to represent writers while the bigger agencies basically turn into studios.
HOROWITZ-GHAZI: As for the writers themselves, this whole episode looks a bit different depending on where you are on that great ziggurat of leverage. Some have expressed dismay at cutting themselves off from agents just as their careers are getting going. But in September, members of the Writers Guild voted overwhelmingly to reelect the leaders who authorized the firing.
ROBBINS: And this whole thing seems to have helped some up-and-coming screenwriters, like Keith Powell, who watched his dream sitcom get scuttled. He says removing the big agencies has actually knocked down some barriers for him.
POWELL: I've gotten more work in the past seven months than I have in the past seven years because suddenly, the artist has a direct connection to the buyer. They don't have a middleman anymore. And the buyer has a direct connection to the artist.
HOROWITZ-GHAZI: And he says, for the time being, that's about as good a Hollywood ending as he could have hoped for.
POWELL: Right now I am the busiest I have ever been in my career as a writer. When I leave you here, I'm going to go and work on the movie that I've been hired to write that I got with a major network all on my own. And so the closing shot of the movie, for me, personally, would be walking out of the NPR studio, getting into my car and going to work because that's all I ever wanted.
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HOROWITZ-GHAZI: That's a wrap.
ROBBINS: Roll credits.
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ROBBINS: Are you involved in a knockdown, drag-out fight over the pay structure of your industry? Email us at email@example.com. You can also find us on Facebook and Instagram @PlanetMoney.
HOROWITZ-GHAZI: Today's episode was produced by the great Liza Yeager. Our editor is Bryant Urstadt, and our supervising producer is Alex Goldmark. Isaac Rodriguez (ph) mastered the show. And special thanks to Eden Dranger, Shiva Jain (ph), Gavin Polone and John August of the excellent Scriptnotes podcast.
ROBBINS: I'm Ted Robbins.
HOROWITZ-GHAZI: And I'm Alexi Horowitz-Ghazi. This is NPR. Thanks for listening.
ROBBINS: And fade to black.
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