Los Angeles – Today, the Writers Guild of America (WGA) sent an alert to potential investors in Endeavor Group Holdings (Endeavor or EDR), warning of conflicts of interest in Endeavor’s operations that have already caused a significant loss of its writer clients. Read the full alert here.
In its S-1 registration filed with the U.S. Securities and Exchange Commission, Endeavor concedes its reliance on clients and its exposure to disruption if it is unable to manage conflicts of interest: “Different parts of our business may have actual or potential conflicts of interests with each other, including our client representation, media production, events production, sponsorship, and content development businesses. Although we attempt to manage these conflicts appropriately, any failure to adequately address or manage internal conflicts of interest could adversely affect our reputation and the willingness of clients and third parties to work with us may be affected if we fail, or appear to fail, to deal appropriately with actual or perceived internal conflicts of interest, which could have an adverse effect on our business, financial condition and results of operations.”
Since mid-April, Endeavor has lost approximately 1,400 writer clients as a result of its refusal to cease conflicted practices affecting writer representation. In addition, Endeavor’s conduct suggests it is exposed to antitrust liability for price-fixing and other collusive behavior with competing talent agencies. See the WGA’s Cease and Desist letter to WME here.
The WGA is engaged in a historic campaign to end the conflicted business practices of talent agencies. These practices of the major agencies include demanding direct payments from the studios employing their clients known as “packaging fees” and leveraging their exclusive access to talent to become producers, making them, in effect, both their clients’ representatives and employers. More than 7,000 Hollywood writers represented by the WGA have left agencies that refuse to sign a new agreement with the union that realigns the economic interests of agents with those of their writer clients.
Click here for the latest information on the campaign or contact Gregg Mitchell (323) 782-4651 to arrange to speak with a WGA representative.