Hollywood talent agency WME is set to reach a deal with the union that represents Hollywood’s top writers as early as Friday, sources told The Post.
The deal, if reached, stands to end Hollywood’s epic two-year standoff between the agencies and their writer clients — from Shonda Rimes to Tina Fey to Seth MacFarlane and Lena Waithe — who were instructed by their union in 2019 to fire their agents over deep-seated conflicts over compensation.
And it will force WME’s parent, Endeavor, to sell stakes in Endeavor Content, an affiliated production company behind the critically acclaimed “La La Land,” and “The Young Pope,” as well as new release “Bill & Ted Face the Music.”
Endeavor-owned WME, which represents A-listers like Christian Bale, Matt Damon and Oprah Winfrey, is poised to join Hollywood’s other top agencies in signing an updated deal as soon as Friday to end “packaging,” a practice that allows production companies to pay talent agencies a flat fee to bundle their talent (writers, producers and actors) together for a film or TV series, sources said.
Prior to the writer’s strike, Hollywood’s biggest talent and management agencies were embracing “packaging” as a business model and using their own in-house production companies to do it.
But the practice has come under fire in recent years, including from the Writers Guild of America, which claimed it put agencies in the conflicting roles of boss and agent — and therefore gave them incentive to pay their talent less. They also complained that the practice locked writers in to working only for production companies owned by their agents.
A source with knowledge of the deal said Endeavor has agreed to sell down its stake in Endeavor Content to 20 percent in order to comply with the WGA’s mandate. The source said Endeavor Content, which is also owned by private equity firm Silver Lake Partners, is “optimistically” worth north of $700 million if sold in its entirety.
One of the biggest hurdles in unwinding Endeavor Content from the rest of Endeavor has been the fact that the production-distribution unit has upwards of 300 projects in various stages of development, sources told The Post.
Endeavor Content also has existing contracts with dozens of WGA scribes, deals that had been allowed by the guild as Endeavor Content accelerated its development plans in the last four years.
And that may be why WME was in no rush to come to a deal until mid-January when the powerful Directors Guild of America sided with the WGA over separating Endeavor Content last month.
The DGA, which represents Tinseltown’s directors, penned an open letter to WME chief executive Ari Emanuel in January, telling him ” to remedy the affiliated production company issue.”
And upsetting the DGA, which has a reputation in Hollywood as a highly-organized and efficient union, could be a disaster for WME, which reps top directors like Martin Scorsese.
Endeavor and WME declined to comment. The Guild did not return requests for comment.