CAA, WME and UTA Back Bill to Force Studios to Fund Indies

Three rival Hollywood agencies rarely agree on lunch. Now CAA, UTA and WME, plus producers Ron Howard, Brian Grazer, Jason Blum, Mark Burnett and Peter Chernin, have formed the American Entertainment Alliance (AEA) to push federal legislation that would require major studios to spend half their annual content budgets on independent US productions.

The targets are named: Netflix, Disney, Amazon and Skydance. The proposal, announced via the New York Times, would stop those companies from funneling most content through in-house studios for their own networks and streamers. At least half would have to come from outside production companies. In return, creators would own what they make.

What does the AEA actually want?

The wishlist has three parts:

• Half of major studios' annual content budgets devoted to independent productions in the United States
• Production companies retaining ownership of their shows
• Licensing rights that let producers resell a series to another streamer years later, or find a new home for a cancelled one

The AEA argues the change would jolt the marketplace, creating more jobs and more opportunity. It points to 41 percent fewer scripted submissions from independent producers and thousands of jobs lost since the last era of deregulation.

"There are fewer people deciding what gets made and what we all see, what the consumer sees," Bryan Lourd, chief executive of CAA, told the New York Times. "This change that we're putting forth would foster an environment where more things could get financed and therefore there'd be more storytellers, more jobs created. Distribution is not the issue of the future. Who finances content is the issue."

Why does this sound familiar?

Because Hollywood did it before. The model is Fin-Syn, the Financial Interest and Syndication Rules of 1970, which barred the three major broadcasters — CBS, NBC and ABC — from owning the shows they aired or controlling their syndication. Independent, creator-led studios thrived under it: Castle Rock, Mary Tyler Moore's MTM Enterprises, Lorimar, the company behind "Dallas."

Congress repealed the rules in the '90s after cable's rise, on the theory that competition was now plentiful. The AEA says that's precisely when media consolidation began, culminating in the current moment: a post-Covid, post-strikes contraction in annual output, followed by the largest consolidation in media history — Paramount's merger with Warner Bros. Discovery, putting two major streaming services under one roof.

One wrinkle: Fin-Syn was enforced by the FCC (the Federal Communications Commission), which has little oversight of streaming. So the AEA is going the legislative route instead.

Can it pass?

The odds are honest work. The AEA stakeholders are meeting with the drafters of the recently introduced bill creating a federal tax credit for US-produced films — itself landmark legislation whose fate after the midterms remains open. A content-quota mandate faces a polarized Congress and studios that will fight it, arguing they need to own their content and already buy plenty from outside.

That's partly true. Imagine, Blumhouse and MRC — all represented within the AEA's ranks — have thrived in the current ecosystem. The studios will say so, loudly.

Still, a coalition of this weight fighting for outside producers is rare, and the underlying diagnosis is hard to argue with: fewer gatekeepers, fewer shows, fewer owners. Whether Congress agrees is the whole game now.