WGA's 3-year deal with studios, nets expires May 1

The leaders of the Writers Guild of America have signalled that upcoming negotiations with studios will have a strong focus on improved DVD residuals and healthcare.

WGA East prexy Herb Sargent, in his year-end message to 4,000 WGAE members, said the Guild is heading into negotiations amid “boom times” for the entertainment industry generally and the box office specifically.

“However, those figures pale in comparison with the industry’s take in home video, in particular, the sales of DVDs, which are providing studios with a new and astronomical revenue stream,” he said. “Yet last year, writers only received a negligible share of these billions of dollars. When those dollars move to video-on-demand, which they eventually will, we need to make sure that we get our fair share in that new revenue source as well.”

The WGAs three-year deal with studios and nets expires on May 1. No date has been set for launching negotiations.

In 2001, the WGA decided to forego an increase in the homevid residual payout, currently at 0.36% of sales, in order to achieve other gains, such as making Fox a full network in determining residuals. It was able to obtain a $5,000-per-movie payment to screenwriters for the rights to include the screenplay in the DVD, but the studios were intractable in their refusal to boost any other part of homevid.

“We are determined that writers receive not only fair residuals payments derived from existing mature media but also from emerging technologies,” Sargent said, adding that the issue was members’ number one concern.

WGA West prexy Victoria Riskin, in her end-of-the-year message to 8,000 WGAW members, stressed the need to bolster the Guild-industry health plan, which was forced to tighten eligibility and benefits this year. Soaring health care costs forced trustees to increase by 51% the eligibility requirement for annual earnings to $28,833 from $19,125 and to impose premiums for dependent coverage for the first time.

“It was a tough and painful year, and we all felt it,” Riskin said. “As a result of these cuts, our health plans will be safe through 2004, but it is essential that you also know that national health care costs are expected to rise … prospectively at a double-digit rate annually. The only way to protect our plans now is for the companies to make increased contributions in collective bargaining.”

Riskin did not specify how much of an increase the guild will seek from the current contract rates, set at 6% of earnings for the pension plan and 7.5% of earnings for the health plan. No timetable has been set for negotiations for replacing the current pact, which expires May 1. Before the start of bargaining, the WGA’s negotiating team must first receive approval from members of its pattern of demands.

The health and pension plans are operated jointly by reps of the WGA and the Alliance of Motion Picture & Television Producers, which serves as the bargaining arm for studios and nets.

“We alone have made sacrifices, unaided by the companies,” Riskin said. “We cannot and should not be asked to make more sacrifices. Protecting the health plans is crucial next year.”

All Hollywood labor unions are facing soaring health care costs. The Screen Actors Guild and the American Federation of Television & Radio Artists boosted the producer contribution rate from 13.3% to 14.3% on its recently ratified pact with advertisers along with relatively moderate gains in minimums.

The pre-negotiation message is in keeping with the WGA’s tradition as the most active among the showbiz unions in prepping members for bargaining. Riskin also singled out DVD residuals and jurisdiction over animation and reality TV as major concerns.

“As we look ahead to the new year, we must also remember that the DVD market has delivered an enormous holiday gift to the companies — a bonanza, to put it mildly,” said Riskin, noting DVD revenues hit $11 billion last year and are expected to reach $15 billion this year.

Other sectors highlighted in recent months by the WGA as key concerns include preventing free rewrites and boosting pay-for-cable residuals.

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