Breaks silence on 'foreign levies'

The Screen Actors Guild has collected $8 million in foreign tax revenues for its members but distributed less than 3% of those funds, according to a guild disclosure.

Breaking its silence for the first time on the issue of “foreign levies,” SAG announced that more of the funds should begin getting to members later this year. SAG said it needed “lengthy” negotiations to obtain the funds and is in the process of revamping its computer system to handle the disbursal of those funds.

In an article in the just-published issue of Screen Actor magazine, the guild announced that members should begin receiving “significant” payments from the collected funds by the end of the year. The article said only that a “small portion” of the $8 million has been distributed, but SAG spokeswoman Pamela Greenwalt told Daily Variety that the figure is about $250,000.

Generation of the foreign levies — collected from countries by such mechanisms as taxes on video sales and/or rentals to compensate copyright holders for reuse — started in the 1980s. The funds aren’t residuals, which are spelled out in the minimum basic agreement with studios and nets.

SAG noted that copyright holders — studios and producers — originally received all of those funds but said it was able to negotiate agreements with foreign collection societies for a portion of the funds designated for actors. SAG said those pacts are similar to those negotiated by the DGA and WGA, which were able to obtain 7.5% each from the funds.

“Because of the complexity of allocating lump-sum payments to the performers who are eligible to receive them under collecting society rules, it was necessary to design and develop special enhancements to the guild’s computer system to handle these allocations,” SAG said in the article.

The question of foreign levies has become more prominent in the past two years, as both the WGA and DGA have been hit with lawsuits alleging they mishandled those funds and that the guilds lack the authority to handle those funds in the first place. The WGA has also been hit with a whistle-blower suit by a former employee who handled the funds and alleges she was fired in retaliation for talking with government investigators.

U.S. District Court Judge Margaret Morrow ruled in April that the DGA and WGA foreign levy agreements have limited the rights of plaintiffs to seek the full share and granted a motion by the plaintiffs to move the case from federal court and back to state court. She also found that the rights to those funds don’t belong to the WGA and the DGA but to the authors of the works.

In the article, SAG warned its members against seeking the funds on their own because of the complex collecting process that may involve negotiation and even litigation to force distribu-tion.

“If those performers are successful in their claims for payment, they can also find themselves subject to claims or even lawsuits raised by producers who allege the payments belong to them under U.S. copyright law,” the guild said.

SAG also disclosed that it uses a “small deduction” from the funds and interest accrued during the payment allocation process to defray the costs of the program.

SAG’s announcement comes two months after the first public disclosure that guild members Jack Klugman (“The Odd Couple”) and Ken Osmond (“Leave It to Beaver”) were considering a possible suit against the guild over alleged nonpayment of foreign levies. Greenwalt said Friday that SAG’s not aware of any such legal action.

According to the WGA’s recently issued annual report to members, the amount of foreign levies disbursed to writers has totaled $37 million since 1991. The amount of undisbursed funds was about $20 million as of March 31.

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