© Provided by The LA TimesTensions between agencies and management firms are rising amid a protracted labor dispute with the WGA. (Renaud Vigourt / For The Times)
Talitha Watkins wasn't looking to leave one of Hollywood's biggest talent agencies, Creative Artists Agency - her home for the last four years.
But when Issa Rae, the star and co-creator of HBO series "Insecure," approached Watkins about leading a talent management firm focused on supporting women and people of color, it was an opportunity she couldn't refuse.
"George Floyd, Amy Cooper, and COVID - all put a lot of things in question for me," Watkins said. "There's that infamous saying, 'If not now, when?'"
It's a choice more talent agents are making. As Hollywood grappled with the delay in productions, talent agencies also suffered when their clients were not getting paid. That resulted in significant cutbacks, including layoffs and salary reductions, at major agencies including CAA and WME.
Compounding matters, those agencies continue to be in a long-running dispute with the Writers Guild of America that has barred CAA and WME agents from representing WGA writers for nearly two years. That turmoil, along with the social justice movement sparked by the police killing of Floyd - has caused agents to reevaluate their career choices.
© (Dania Maxwell/Los Angeles Times)Talitha Watkins, who recently left CAA to lead ColorCreative Management, a division of ColorCreative, a company associated with Issa Rae, stands in Exposition Park in Los Angeles. (Dania Maxwell/Los Angeles Times)
"They have to deal with the agenda of the company, they have to deal with conflicts with other agents that they work with, they have to deal with outside problems that the agency has like with the union - they have all these barriers to doing what they want to do," said David Chidekel, a partner at law firm Early Sullivan Wright Gizer & McRae. "As a manager, they don't have any bureaucracy.... They're pretty small companies."
Sensing an opportunity, several new management firms have opened in the last year, including Watkins' ColorCreative Management in L.A., Newmation in New York and the Framework Collective in L.A. - all led by talent agents who left such agencies as CAA, WME and United Talent Agency.
Managers guide the careers of their clients and, in some cases, serve as producing partners on projects. An agent's primary role is to match clients with open jobs and secure the highest pay for them, typically collecting a 10% commission fee.
By law, managers cannot procure work for their clients, but they can promote them to potential buyers, help them hone their creative ideas and fix problems that arise on projects. In some cases, they may help clients collect payments and may even lend them money.
"Being a manager is like being a parent, day to day," said David Neumann, a former agent who recently launched New York management firm Newmation. "Being an agent is like being an uncle you go to when you need help."
© (David Neumann)David Neumann, founder of New York management firm Newmation, is a former agent. (David Neumann)
But the roles of managers and agents blurred last year after thousands of writers fired their agents to protest the prevalence of costly packaging fees and so-called affiliated productions. The action opened the door for managers to pass work to writers.
It also raised concern, especially among agents, that managers aren't regulated, allowing them to engage in the kinds of practices viewed as problematic for writers.
"It is hypocritical," WME partner Rick Rosen said in an interview. "The WGA says to us, 'Representatives should not be producers,' but somehow that is not extended to managers."
Although most WGA members have supported the union's campaign against agencies, some share the concern that managers operate without enough oversight.
"The potential for abuse is pretty high," said writer and producer Marc Guggenheim, who recently ran unsuccessfully for a seat on the union's board. "When we're talking about younger writers who don't feel comfortable standing up to their representatives, you run into some real potential conflicts."
The WGA declined to comment for this article. But in a recent court declaration, WGA West Executive Director David Young said that although the union is aware that managers may have potential conflicts with their writer clients, it has not found such practices to be "pervasive and widespread."
"Nonetheless, on multiple occasions I have told groups of guild members that the WGAW will not hesitate to protect writers if it perceives abuses by managers or any other writer representatives," Young said.
What is clear is that the agency fight with the WGA has created fertile ground for new management firms to sprout.
"The wings have definitely been clipped of agencies in terms of their sort of unlimited entrepreneurial expansion," said Tom Nunan, a former network and studio executive who teaches at the UCLA School of Theater, Film and Television. "As a result, there's more of a ceiling on how much agents can really expect to make financially."
At least one new management firm, Range Media Partners, has seen the turmoil in the agency world as a business opportunity.
The L.A. firm, which launched in September, is led by former CAA agent Peter Micelli and backed by Steven Cohen's venture fund, Point72 Ventures.
"The agency's equity value is in free fall, there has never been a better time to recruit high-end representatives away from their current incumbent," according an early presentation of the company to investors obtained by The Times. "We have never seen more high-end representatives ready to leave these institutions."
Range, for example, has recruited a dozen top agents and represents high-profile talent, including "Watchmen" creator Damon Lindelof. The co-creator of the ABC science fiction series "Lost" fired CAA last year and is now using Range Media instead of CAA, the agency argued in recent court filings tied to its lawsuit against the WGA.
"Micelli asserts, despite the prohibitions set forth in the Talent Agencies Act, that he is free to 'make deals' for Mr. Lindelof's employment," Bryan Lourd, a CAA managing partner, said in a court declaration filed last month. "This is another example of the harms that are presently occurring as a result of the guilds' boycott of CAA and their encouragement of managers to poach CAA clients while the guilds refuse to franchise CAA."
Lindelof and Range Media Partners declined to comment. Range has 69 clients, including "Game of Thrones" actress Emilia Clarke and "A Star is Born" actor Bradley Cooper, according to industry information site IMDbPro.
CAA and WME became the only two major talent agencies to not make a deal with the WGA this summer, after UTA reached a landmark agreement with the union. UTA's July deal allowed for agencies to own up to 20% in affiliated content and end packaging by June 30, 2022, opening up the door for ICM Partners to make a similar pact in August.
CAA has sued WGA, accusing the union of starting an illegal boycott when writers fired their agents. The agency, along with WME, have requested a preliminary injunction that would allow writers to work with the agencies during the lawsuit. WGA says its action is protected by national labor law.
As the fight with the WGA continues, some agents have become managers instead.
"A lot of the agents, including myself, liked working with several writers that we couldn't represent anymore, and we couldn't really be in contact with them," said Neumann, who launched Newmation last month. "It was sort of frustrating because we wanted to work for them and they wanted to work with us."
Neumann said he saw an opportunity to specialize in managing talent related to animation, which has grown more popular on streaming platforms.
Other agents, like Watkins, saw a need for management firms that support diverse talent.
Her firm is a division of ColorCreative, a company founded by Rae and Deniese Davis. They created ColorCreative Management after noticing that some of the diverse talent they wanted to help were ignored by other managers. The WGA dispute did not help writers of color, Rae said.
"Without a doubt, managers have to step up where agents fell off," Rae said. "Unfortunately now to many agents' detriment ... writers are realizing, 'Do I really need this? Do I really need both?'"
Although talent managers have been around since the early days of Hollywood, the current delineation between the roles dates from the 1978 Talent Agencies Act, or TAA. The landmark law defined a talent agency as a person or corporation who procures employment for artists. It also said "talent agencies may, in addition, counsel or direct artists in the development of their professional careers."
The law requires talent agents to post a bond of $50,000, as well as provide affidavits from people attesting to their reputation or character.
In contrast, personal talent managers are not regulated by the state labor commissioner, unless they act as unlicensed agents and attempt to procure work on behalf of their clients.
Managers who violate the law could face serious financial consequences. In a 2008 landmark case that went to the California Supreme Court, Marathon Entertainment Inc. vs. actress Rosa Blasi, the management firm lost commissions on work that was negotiated without an agent involved.
The California labor commissioner's office has not seen an increase in complaints about managers and attorneys violating the TAA since the WGA action in April, 2019, said Dave Gurley, staff counsel for the state agency.
Larry Thompson is a veteran talent manager who served on the California Entertainment Commission in 1980s, which advised the state Legislature on licensing agents and artist representatives. Then, agencies were not involved in production.
Over time, he said, agencies have become bigger and more powerful, owning production companies and buying up other businesses to be a one-stop shop for clients. Some of that expansion encroached on manager territory.
"The agents have undercut managers and increased the competition," Thompson said.
Now the pendulum may be swinging back a bit.
Former WME agent David Stone and former UTA agent Ben Jacobson met in the UTA mailroom 15 years ago and had talked about starting a business together, and decided 2020 was the year.
Their L.A. firm, the Framework Collective, has more than 40 clients. including co-creator of "Mixed-ish" Peter Saji, "13 Reasons Why" creator Brian Yorkey and veteran TV executive Warren Littlefield, an executive producer on "The Handmaid's Tale."
"We wanted to get closer to our clients in a moment in time where there was more uncertainty than there has been in a long time," Jacobson said. "In this new capacity we can be real thought partners with our clients, helping to build out their businesses and think strategically on their behalf."
Some large agencies aren't worried about the competition from management firms.
"It's a complex world out there, and management companies can be helpful and supportive in that process, but ultimately it takes a multifaceted agency with history, legacy, breadth and power to be able to fully maximize creative and financial opportunities for artists," Kevin Crotty, co-president of ICM Partners said in a statement.
Pressure from the WGA and other factors are forcing agencies to change how they operate. Since April 2019, the union has reached agreements with more than 80 agencies to end packaging by the end of June 2022.
Packaging has been a lucrative source of revenue for agencies that receive fees from studios for pulling together talent for projects, in lieu of the standard 10% commission. The WGA contends that packaging causes agencies to look out for their bottom lines instead of what's best for their writer clients.
Like many other guild members, Matt Greenberg sees the shift as victory. In April 2019, the writer-producer fired his agent at Verve, and they were reunited three weeks later when the agency reached an agreement with WGA.
"The guild and the guild leaders showed a lot of courage in this," Greenberg said. "Writers for the most part came together. We tried to really present as unified a front as possible."
The loss of packaging came at a crucial time for agencies, forcing them to look for new ways to make money. Several large firms increased their representation in sports, music and live events. But that hit a major snag during the pandemic, when productions and concerts were canceled or postponed. Meanwhile, demand for streaming video has skyrocketed, reducing the back-end revenue agencies could once count on.
"Ultimately it's going to force us to figure out how do we bring the streamers to the table in a more transparent way about the value of our client's content, because that's going to be one of the biggest challenges moving forward," said UTA Chief Executive Jeremy Zimmer.
This story originally appeared in Los Angeles Times.