Record wages for writers

Stockpiling lifts earnings by 4%

Despite the WGA strike, earnings for writers rose 4% to a record $943 million in the fiscal year ended March 31, reflecting accelerated work on feature scripts.

Feature work jumped nearly 16% to $502.5 million as studios stockpiled, but TV earnings were hit by the strike, sliding 6.8% to $437.3 million, according the June 17 report sent recently to WGA West members. WGA members struck for 100 days during that fiscal year, going out Nov. 5 and not returning until Feb. 12.

The WGA West also said its expenditures jumped 11% to $26.3 million due to the costs of negotiations and the strike, leading to an operating deficit of $800,000. The membership and finance committee noted that the deficit led to a decline in net assets to $31.5 million but declared the WGA West “remains in excellent financial condition.”

The number of writers employed declined in both categories — off 1.1% in TV to 3,215 and 2.6% in features to 1,899. And the guild noted that the jump in feature work may not last.

“In contrast to the decline in TV employment, screenwriters in feature film had a very strong year,” the WGA said. “The strong earnings in 2007 could, however, be borrowing from the future. Much of the increased work appeared to be related to accelerated employment prior to the strike.”

Even though film earnings beat the previous 2005 record by $50 million, the guild noted that only 100 of the 150 films projected to start principal photography this year had actually done so — indicating that the rest may have been deprived of production rewrites during the strike.

As for TV, the WGA noted that smallscreen earnings were the lowest in three years and that employment was the lowest in 11.

“Though exaggerated by the strike, this decade-spanning low employment level nonetheless reflects the recent history of contracting TV employment,” the WGA said. “The decline is largely attributable to the emergence of primetime reality TV, which uses fewer writers than primetime series and is often not covered by the WGA contracts. In addition, the relative popularity of hourlong formats, especially drama, is a negative factor in employment compared with half-hour formats, which more than double the number of writers per hour of television produced.”

The guild forecasted that some of the lost 2007 earnings will be recovered this year, but it added that 20% of episodes intended for the 2007-08 season won’t be produced or will be deferred to the 2008-09 season.

The WGA also reported that median average annual earnings for members edged down 0.7% to $60,009 over the four-year period ending with 2007 after gaining 2.6% and 10.3% during the previous two years.

Residuals rose 3.1% to $273.2 million last year, driven by a 7.5% gain in film payments to $130.7 million, with gains in TV reuse and pay TV offsetting a 1.5% decline in homevideo. TV payments decreased 1.4% to $130.3 million with declines in primetime reuse and domestic syndication and the biggest gain in made-for-basic cable reuse.

“A small boost in residuals due to a strike-influenced increase in the number of repeats in late 2007 and early 2008 will be seen in the 2008 results,” the guild advised.

The 21-page report also included two other strike-related disclosures:

  • That the WGA West made over $3 million in strike loans, with repayment required to begin no later than 180 days after the strike ended.

  • That the guild has set dues for “financial core” members at 8.03% lower than regular dues. The guild announced this spring the names of 28 members who had gone fi-core during the strike; the report’s final three pages included, for the first time, the procedures for going fi-core and filing objections to the process.

The report also includes disclosure of $15.5 million in investments and $23.8 million in “funds held in trust for members” including foreign levies, client trust accounts, undeliverable funds and a residuals trust fund.

The WGA did not break out the amount of foreign levies accrued under a system in which the guild collects funds paid under foreign laws to authors of copyrighted works. But it disclosed that it had collected $950,624 as a fee to offset the expense of negotiating and administering the foreign levies program — and with the fee set at 5%, the amount collected is probably at about $19 million.

The DGA, WGA and SAG have all been sued over their practice of collecting foreign levies for nonmembers, alleging they overstepped their authority by doing so. The DGA settled its action earlier this year.

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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