Plunge due to decrease in feature film salaries

Hollywood scribes are feeling a freeze in feature writing, as overall 2011 earnings dropped 5.9% vs. the previous year to $911.7 million in work covered by the Writers Guild of America West.

The annual report issued by the guild Monday showed that the decline was due to a 12.6% plunge in feature film salaries to $349.1 million, with an 8.1% fall in the number of writers employed to 1,562. The overall number of writers employed in 2011 fell 2.3% to 4,244 — a decline of 104, again due wholly to a decline in feature writing assignments.

The guild said 2011 had seen a “modest” 3.9% gain in residuals of $12.3 million to an all-time high of $328.5 million, with all of that gain coming in TV.

Overall TV earnings edged down 1.2% to $559.2 million.

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 were produced outside WGA jurisdiction — “The Artist,” “Margin Call,” “A Separation” and “Tinker Tailor Soldier Spy” — and were thus ineligible for WGA Awards.

The final numbers for 2011 should increase slightly when final figures are tabulated, the guild said.

“Reports of employment declined 2.3% to a recent low of 4,338 in 2011, though late reports collected in coming months will likely result in employment levels close to those in 2010,” the report said. “Total earnings declined, but again, the 5.9% decline to $911.7 million will be partially recouped as late reports are collected.”

Last year’s feature-film earnings represented a 34% 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 number of writers employed in 2007 was 2,041, 23% higher than the 2011 figure.

The new report noted that total television employment edged up 0.4% last year to 3,320. That was 36 slots lower than the pre-strike level of 3,356 in 2007 and 583 slots — or 15% lower — than the all-time high of 3,903 in 2000.

In residuals, TV payments led the way with a 14% hike to $183.1 million. The best news on that front, the WGA said, was that reuse of programs made for foreign free TV and basic cable increased 59.5% to $47.2 million. “The highlight was reuse of programs in foreign territories, where the revenue-based formula added to the contract in 2001 resulted in a large increase in collections,” the guild said.

New-media reuse of TV programs — the key issue during the WGA strike — grew 11.9% to $2.91 million in the fourth year of collections in that area.

Overall feature-film residuals slid 9.8% to $128.5 million on a 23.9% decline in overall DVD and Blu-ray revenues to $30 million. New-media residuals in features soared 176% to $3.37 million.

The new report from the membership and finance committee 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 $2.8 million on operating revenues of $26.1 million for the fiscal year ended March 31. Annual expenditures dropped to $23.3 million, down from $24.1 million, with lower legal expenses cited as the biggest contributor to the decline.

The committee also noted that the report contains a supplemental schedule summarizing the foreign levies program activities for the first time since the guild began distributing the funds in 1993.

The report provided no details about the class-action suit, filed in 2005 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 left that post earlier this year. The WGA agreed in the decree to use its “best efforts” to pay all foreign funds within three years.

The supplemental table said that the WGA collected $18.3 million in foreign levies during its fiscal year ended March 31 and generated $203,687 in interest from those funds with $847,107 in “administrative fees” for distributing the funds. The guild said it distributed $17.3 million in the fiscal year, bringing the total distributed since 1993 to $121.2 million.

The report from the finance committee reported that the WGA West was holding $24.3 million “due to members” without breaking out how much of that is from foreign levies. 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.

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