We love Gavin Palone because he’s so, so…right. For example:
by Gavin Palone
I’m all for increased efficiency when it comes to producing filmed entertainment. I embrace moving a production to where it can be made more cheaply, cutting a schedule to the minimum necessary to realize the project’s vision and doing away with decadent perks. I even understand why my fees and profit participations have been reduced, in line with other producers, over the years; and I accept that it was necessary for some of my friends to lose their jobs during the recent rounds of layoffs at major studios and networks. Pruning dead branches allows the tree to keep growing. But what I can’t abide is how those same companies, which ask us to make do with less and find it expedient to de-job those who have served them loyally for years, continue to tolerate the most deplorable cost associated with creating their product: the television package fee.
If you are unfamiliar with what packaging fees are, I’ll give you more details in a bit, but in short, it is a large upfront payment and an even larger back-end participation that talent agencies receive for doing exactly what they are supposed to do for the regular 10 percent commission they charge their clients.
I’m not writing this to bash the agencies. It isn’t any more their fault than it would be mine if I were to put my house up for sale at five times what it’s worth and someone acceded to my demand. Understandably, nobody is willing to overpay for my house, but close to 100 percent of broadcast network scripted TV shows generate package fees for talent agencies. And I promise you, the only reason those fees are paid is out of fear that the agency will kill a deal if its agents don’t get to wet their beaks, rather than because they did any extra work or “packaging.”
A good example of this dynamic was evident on a project I recently sold. I had breakfast with a couple of network executives and pitched them an idea, which they liked. I told them I wanted to work with a specific writer (with whom I did not discuss this idea before meeting with the executives). They didn’t know him, so I sent them his writing sample, which they enjoyed. The writer and I then pitched out a complete story. The executives officially bought the show. The writer then told his agents of the sale after it was sold. His agents then negotiated with the studio, which was a sister company of the network, and got him a deal with which he was happy. Then they asked for a package fee.
I told the network I would not go along with them getting a fee because they had nothing to do with the show. The writer also told his agents that it didn’t make sense for them to receive a package fee. His agent told him she would not close the deal — despite his direction to do so — without the agency getting its fee. He then asked his lawyer to close the deal and the lawyer also refused, probably not wanting to take on the agents.
I called the network and told the executives to just say it was “take it or leave it” and they’d have to close because the client wanted it closed. One of the executives told me that I’d have to work it out with the agency myself. I said that they weren’t my agents (I am not represented by an agency), so I had no way of influencing them. He said the network/studio would rather pay the fee, which could total millions of dollars in success, instead of jeopardizing its relationship with a major agency. In the end, the agency got its fee.