2010 earnings dropped 2.9% overall

Hollywood scribes are feeling a chill in feature writing, as overall 2010 earnings dropped 2.9% vs. the previous year to $928 million in work covered by the Writers Guild of America West.

The annual report issued by the guild Friday showed that the decline was due to a 9.9% plunge in feature film salaries, with an 11.2% fall in the number of writers employed. The overall number of writers employed in 2010 fell 4.5% to 4,244 — a decline of 200, again due wholly to a decline in feature writing assignments.

The guild called 2010 a “mixed year” for writers as residuals grew 10%, or $28.7 million, to $315.8 million, and TV earnings set a record of $532.1 million, rising 2.9% or $14.8 million. But those increases were more than offset by the decline in feature-film earnings.

The report comes with the six major studios focusing more of their resources on tentpoles while making fewer mid-budget features. In addition, scripts for independently financed projects are often written outside WGA jurisdiction; four of the 10 Oscar-nommed screenplays this year — “Another Year,” “The King’s Speech,” “Toy Story 3″ and “Winter’s Bone” — were ineligible for WGA Awards.

The guild’s report indicated that the decline in the number of feature film jobs was due to the cyclical nature of Hollywood business while making no comment on the decline in feature-film revenues for WGA members.

“The fluctuating nature of employment in feature-film writing continued in 2010, with 1,615 writers reporting earnings compared to 1,818 in 2009,” it said.

Last year’s feature-film earnings represented a 32% plunge from 2007, when studio stockpiling prior to the 100-day strike (which started Nov. 5, 2007) pumped up guild-covered payments to a record $526.6 million. Total employment in 2007 was 2,034, 20% higher than the 2010 figure.

The new report noted that total television employment declined last year by 1.1% to 3,142. That was 6% lower than the pre-strike level of 3,350 in 2007 and 19.5% lower than the all-time high of 3,903 in 2000.

In residuals, television payments led the way with a 12.8% hike to $160.4 million. The best news on that front, the WGA said, was that reuse of programs made for basic cable increased 32.5% to $20.9 million. “This area has shown sustained growth throughout the past five years, increasing an average of 25% per year,” the guild said.

Foreign reuse of television programs increased 18.9% to $29.49 million and primetime reuse increased 4.6% to $24.72 million due to more repeats on the networks. Homevideo reuse of television programs slid 31% to $8 million but pay television use jumped 32% to $5.39 million.

New-media reuse of TV programs — the key issue during the WGA strike — grew 23.7% to $2.63 million in the third year of collections in that area.

Overall feature-film residuals grew 6.1% to $141.78 million despite a 3.2% decline in overall DVD and Blu-ray revenues to $40.6 million. Pay television residuals soared 17.2% to $54.3 million and new-media reuse of films grew by about $480,000 to $1.2 million.

The new report also includes a bright picture of the WGA West’s financial outlook from the guild’s membership and finance committee, noting that it had an operating surplus of $700,000 on operating revenues of $25.3 million for the fiscal year ended March 31. The WGA West had generated an operating surplus of $4.5 million in the previous year, which marked a sharp rebound from two years ago, when the WGA posted a $5.1 million deficit due to investment losses and layoffs of about 20 staffers.

“The increased revenues were the product of a modest 1.5% increase in total dues revenue and investment gains generated by a recovering equities market,” the committee noted in the new report.

The committee also said that annual expenditures were up 10% to $24.6 million, noting that the “biggest contribution” came from the settlement of a class-action foreign levies lawsuit. The panel provided no other details about the suit, filed in 2005 suit by William Richert (“Winter Kills”), which alleged that the guild had not properly handled the foreign funds due scribes as compensation for reuse.

The consent decree was signed in June 2010 by Los Angeles Superior Court Judge Carl West, who promised he would closely monitor how those funds are distributed. The WGA agreed in the decree to use its “best efforts” to pay all foreign funds within three years.

The report from the finance committee reported that the WGA West was holding $25.4 million “due to members” without breaking out how much of that is from foreign levies. It disclosed last year in its annual report that, as of March 31, 2009, it had $30.3 million in “funds held in trust for members,” including foreign levies, client trust accounts, undeliverable funds and a residuals trust fund — although it didn’t break out how much of that was from foreign funds.

The foreign levies for U.S. creatives began to flow after the U.S. agreement in 1989 to terms of the Berne Convention, which establishes the right of authorship for individuals who create works of art.

Follow @Variety on Twitter for breaking news, reviews and more