Hollywood talent agency WME is set to reach a deal with the union that represents Hollywood’s top writers, sources told The Post.

The deal, which is expected to be reached as soon as Friday, stands to end Hollywood’s epic two-year standoff between the agencies and their writer clients — from Shonda Rimes to Tina Fey to Seth MacFarlane and Lena Waithe — who were instructed by their union in 2019 to fire their agents over deep-seated conflicts over compensation.

And it will force WME’s parent, Endeavor, to whittle down its stake in Endeavor Content, an affiliated production company behind the critically acclaimed “La La Land” as well as new release “Bill & Ted Face the Music,” sources said.

Endeavor-owned WME, which represents A-listers like Larry David, Christian Bale and Oprah Winfrey, is poised as soon as Friday to join Hollywood’s other top agencies in signing an updated deal to end “packaging,” a practice that allows production companies to pay talent agencies a flat fee to bundle their talent (writers, producers and actors) together for a film or TV series, sources said.

Prior to the writer’s strike, Hollywood’s biggest talent and management agencies were embracing “packaging” as a business model using their own in-house production companies.

But the practice has come under fire, including from the Writers Guild of America, which claimed it put agencies in the conflicting roles of boss and agent — therefore creating an incentive to pay their talent less

They also complained that the practice locked writers in to working only for production companies owned by their agents.

A source with knowledge of the deal said Endeavor has agreed to sell down its stake in Endeavor Content to 20 percent in order to comply with the WGA’s mandate. The source said Endeavor Content, also owned by private equity firm Silver Lake Partners, is “optimistically” worth north of $700 million if sold in its entirety.

One of the biggest hurdles in unwinding Endeavor Content from the rest of Endeavor has been the fact that the production-distribution unit has upwards of 300 projects in various stages of development, sources told The Post.

Endeavor Content also has existing contracts with dozens of WGA scribes, deals that had been allowed by the guild as Endeavor Content accelerated its development plans in the last four years

And that may be why WME was in no rush to come to a deal until mid-January, when the powerful Directors Guild of America penned an open letter to WME Chief Executive Ari Emanuel siding with the WGA, sources said.

The WME deal stands to end Hollywood's epic two-year standoff between the agencies and their writer clients.
The WME deal stands to end Hollywood’s epic two-year standoff between the agencies and their writer clients.
AaronP/Bauer-Griffin/GC Images

WME, which reps top directors like Martin Scorsese, didn’t want to risk upsetting the DGA, which represents Tinseltown’s directors and has a reputation in Hollywood as a highly-organized and efficient union.

“The issue of avoiding conflicts of interest is exceedingly important to the DGA and our members. Affiliated ownership carries with it inherent and obvious conflicts of interest,” wrote Russell Hollander, the union’s national executive director.

Top agencies like UTA and ICM agreed to the union’s condition over the summer. CAA inked the deal in December, making WME the last holdout.

Endeavor and WME declined to comment. The Guild did not return requests for comment.

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