If you’re following the kerfuffle between Hollywood writers and their agents, you may have a sense of déjà vu—well, if you’re old enough and have a good memory, or are steeped in the industry’s history.
Over the past month, film and television writers have fired their agents, instructed to do so by the Writers Guild of America to protest the fact that the agencies have branched out into “packaging” productions. Instead of simply representing writers (and directors and actors and producers), many agencies now prefer to assemble all the talent for a project and take a fee for it. In some cases, the agencies actually produce the movies and shows themselves, thereby employing the very writers they are pledged to represent.
As the WGA has pointed out, when an agency sits on both sides of the bargaining table, that doesn’t work to the writers’ advantage and could even violate some laws.
Whence that sense of déjà vu, because once upon a time—in 1962—such an arrangement prompted the U.S. government to sue a powerful Hollywood agency for violating antitrust statutes.
At the time, Hollywood’s largest and most successful agency was MCA, headed by super-agent Lew Wasserman. As the keenest business brain in the industry, however, Wasserman understood that there was much more money to be made in producing pictures than in representing the writers, directors, actors, and composers who made them. He thus arranged for MCA to purchase Universal Studios.
Whereupon Attorney General Robert F. Kennedy’s Department of Justice said: Whoa—we’re taking MCA to court for violating antitrust law, and you know damn well we’ll win. MCA’s lawyers concurred with Kennedy’s, and Wasserman agreed to a settlement: MCA would cease to be an agency and become just a three-letter company that owned Universal.
The settlement was anything but calamitous for MCA’s agents. Wasserman became Hollywood’s most successful and powerful studio head for the next four decades, while other MCA agents founded thriving agencies of their own.
Today, however, the four big talent agencies—ICM Partners, WME, Creative Artists Agency, and United Talent Agency—routinely package talent for productions (pocketing major fees for their efforts). WME and United Talent have moved into production as well. Moreover, a number of the agencies are now largely owned by private equity firms adept at extracting profits from the companies they own and/or reselling them at a hefty profit. Clearly, the way to boost the agencies’ profits is to have them do what Wasserman did – get into packaging and producing.
But here’s where the déjà vu no longer applies. Attorney General William Barr’s Justice Department isn’t suing the agencies alleging antitrust violations, as Kennedy’s once did. And truth be told, this sin of omission really isn’t peculiar to the Trump administration. In the half-century since Wasserman had to shutter his agency, antitrust law has been nearly totally defanged.
That’s not because Congress enacted laws scaling back antitrust’s scope or definition. Rather, beginning in the 1980s, a succession of conservative court decisions held that size didn’t matter unless concentration produced a rise in consumer prices. Monopolization of an industry, the suppression of competition, even the control of opposing interests within an industry, were no longer violations. As a result, the interests of mega-corporations were boosted at the expense of nearly everyone else.
That’s why monopolies and monopsonies like Facebook, Google, and Walmart now dominate the economy in industry after industry, suppressing not just competition but innovation and wages. That’s why the Writers Guild—bowing to the courts’ indifference to corporate sprawl—has sued the talent agencies not for violations of antitrust but for violating a state law on fiduciary responsibility.
It wasn’t ever thus. In the same year that Justice compelled Wasserman to give up his agency, the Supreme Court struck down a proposal from Vons to purchase another Los Angeles-based supermarket chain, because it would have given Vons 7 percent of the L.A. market.
Is there any chance that a revolt against corporate domination could allow antitrust laws to again do what their authors intended: Free America from the misrule of monopolies? Perhaps.
Proposals to break up and better regulate the platform monopolies now pop up with increasing frequency, including ones from Senator Elizabeth Warren and disenchanted Facebook founder Chris Hughes. And a new generation of “neo-Brandeisian” attorneys (named after Louis Brandeis, the foremost judicial opponent of monopoly) has emerged in law schools, law firms, and think tanks like the Open Markets Institute.
If progressives can win enough elections to restore a sense of balance to our judiciary, one day the Justice Department may tell Hollywood’s agencies what it once told MCA: You can represent writers or employ them. You can’t do both.