Talent Agencies Face Conflicts of Interest as Parent Companies Storm Into Production Arena

Variety | 2/13/2018 | Cynthia Littleton
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Steve Harvey was not happy.

The comedian and talk-show host was coming to the end of his five-season deal in 2016 on “The Steve Harvey Show,” the syndicated daytime TV series launched by NBCUniversal and Endemol Shine North America four years earlier.

Renewal - Options - Harvey - Endemol - Shine

In reviewing his renewal options, Harvey was annoyed to learn that Endemol Shine was taking an estimated 25%-30% of his show’s earnings, even though NBCUniversal Domestic TV was the lead producer. Then he got a compelling proposal from his representatives at WME/IMG, the powerhouse talent agency that has been rapidly diversifying into content ownership and distribution.

He was offered the chance to partner with the growing IMG Original Content production unit and part ways with NBCUniversal and Endemol Shine as producers of his show. IMG guaranteed Harvey a larger ownership stake, lower overhead costs, more creative control and a big salary boost. It was an easy call for the host.

NBC - Bordering - Outrage - Nobody - IMG

Inside NBC, there was disbelief bordering on outrage. Nobody foresaw IMG entering the picture, even as executives realized Harvey’s desire for change. There was shock that an affiliate of a talent agency would make such a play against NBCUniversal, a huge source of employment for WME clients. There was talk of lawsuits and questions about the legality of an agency producing a client’s series.

The notion that Hollywood’s two largest agencies — WME and CAA — are aggressively moving into production is fraught with the potential for conflicts of interest that arise when the same company represents the creative talent on one side of the table and is the employer on the other. The practice, known in industry jargon as double-dipping, was expressly banned by the Screen Actors Guild for nearly 60 years.

Level - Conflicts - Questions - Compensation - Commission

The level of conflicts can range from questions about how compensation and commission terms are set to how inevitable creative troubles...
(Excerpt) Read more at: Variety
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