EXCLUSIVE: A stinging lawsuit filed today by the composer of La La Land may leave WME wishing they’d been slipped the wrong envelope.
However, unlike the Academy Awards’ Best Picture debacle of 2017, the breach of contract, negligence and fraud complaint from Oscar and Grammy winner Justin Hurwitz against the agency and now divested production arm Endeavor Content over a touring “live-to-film concert” of the Damien Chazelle directed movie seems much more than a mere sleight of hand
Illustrated with an invective filled (surprise, surprise) cameo by Ari Emanuel, the suit filed this morning in LA Superior Court by attorneys Bryan Freedman and Tamar Yeghiayan claims “WME had cynically concocted an illegal scheme, whereby its fixed profit from La La Land in Concert was completely out of line with industry standards for talent agencies.” Resurrecting the demons of packaging that WME and other Tinseltown studios hoped to be forgiven for in their court-fought capitulations to the WGA last year, the civil complaint alleges that Hurwitz was scammed by his own reps so WME could “secure the license for the tour of La La Land in Concert – only to self-deal by competing directly against Hurwitz for the profits from the tour.”
“Only in the wake of the Writers Guild’s pressure of revealing said talent agencies’ conflicts of interest, did WME rush to transfer its license for La La Land in Concert to Endeavor Content, its newly created subsidiary, to try to hide its clear breaches of its fiduciary duties,” the action says at one point. “Hurwitz never consented to the secret transfer to Endeavor Content, which at all relevant times was wholly owned by the same parent company.”
“Hurwitz found himself in the absurd position of being denied the opportunity to work by his own talent agent on a project in which his talent agent was supposedly representing him,” the suit states. “As a result, the talent-talent agency relationship had been turned upside down.”
Or put even more bluntly…
“This action stems from WME’s shocking conduct, whereby the talent agency sought to squeeze extra profit out of its client, the renowned composer Justin Hurwitz, behind his back in violation of its ethical and fiduciary duties to him,” the accounting heavy 22-page filing states.
“WME cynically and systemically entered into secret agreements concerning its client without its client’s knowledge or consent, after he had entrusted WME, his agency, to look out for his best interest and to help maximize his potential compensation, the Freedman + Taitelman lawyers continue. “Instead, Hurwitz discovered that WME had been deceiving him – not only pocketing what should have been his earnings but also lying to his face about it.”
“These claims are without merit and WME intends to vigorously defend itself,” the agency said in response Monday.
Now with CAA, the jury trial seeking Hurwitz is looking at a wide range of damages from the defendants over being seemingly repeatedly short-changed by WME and his then agent (and later Endeavor Content VP) Amos Newman over the international touring production that he essentially put together at his reps’ insistence — and the suit implies the First Man composer may not be the only one pickpocketed.
“To assist with this process WME even went so far as to create multiple ‘subsidiaries; to hide its blatant conflict of interest with its clients, and eventually landed with a ‘subsidiary; known as Endeavor Content, LLC,” the complaint says of the 2017 formed production entity by the publicly traded company.
“This ‘subsidiary’ was formed for the sole purpose of enabling WME to hide money from its clients and routinely misappropriate millions of dollars from them,” the filing declares. “In fact, so controversial was this sham “subsidiary” Endeavor Content for its ongoing cover-up of WME’s breaches of fiduciary duties, that, under extreme pressure by the Writers Guild of America and a well-publicized settlement, it has now been put up for sale,” it adds of Endeavor Content, which South Korean entertainment giant CJ ENM is looking to buy 80% of.
On the block under the divestment conditions of peace with the WGA and scribe clients, Endeavor Content changed hands for nearly $1 billion late last year, with the parent company retaining a small but not insignificant stake. Not that the retreat matter much in this case – at least not to the plaintiffs.
“But that cannot be the end of this matter: it is now time for WME to acknowledge the facts that are plain for all to see and to belatedly return its ill-gotten gains to its clients-turned victims,” today’s filing notes.
As for that Ari Emanuel appearance in the lawsuit, take a gander:
Disgusted by the knowledge of how much WME was profiting off his labor, without
having ever disclosed its profits to Hurwitz, despite numerous requests that WME do so, Hurwitz sought to renegotiate another deal with WME over the production of LLL in Concert. After ongoing negotiations, WME and Hurwitz could not come to an agreement.
Ultimately in February 2021, Hurwitz contacted Ariel “Ari” Emanuel, head of WME,
to voice his frustrations. Hurwitz informed Emanuel that he wanted to be able to conduct his own score, and remain a client at the agency, but that the conflict of interest was making it impossible to do both. In response to Hurwitz’s inquiry, Emmanuel began to make excuses, falsely claiming WME was not doing anything wrong. Emmanuel then claimed that Hurwitz would never get terms as favorable for LLL in Concert as Hurwitz was already receiving for other live-to-film productions.
A follow up call between Emmanuel and Hurwitz was then scheduled where Hurwitz
trusted and believed that his agency, WME, would do the right thing – both for their client and in accordance with their ethical and fiduciary duties. That was not the case. After it became clear that Hurwitz would no longer be willing to stay silent to enable a cover-up of WME’s misconduct, Emmanuel vengefully insisted that Hurwitz would no longer be able to work with “any of my companies” and cancelled his call with Hurwitz. Emmanuel’s actions coupled with the fact that Hurwitz’s agents were clearly not acting in their client’s best interests left Hurwitz with no other option but to seek the representation of another talent agency. Subsequently, even the paltry payments due to Hurwitz pursuant to the WME Residual Agreement have ceased, despite LLL in Concert continuing to be booked worldwide.
Hurwitz left WME for rival CAA soon after those conversations almost a year ago. WME inked its franchise deal with the WGA on February 5, 2021, basically killing off the pipeline of packaging revenue that all the major agencies had been feasting off for years.
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