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Hollywood Writers’ Earnings Fell 3.1% to $1.23 Billion in 2016

Members of the Writers Guild of America West saw their earnings fall 3.1% to $1.23 billion in 2016, thanks to declines in both television and feature films.

Total covered earnings for WGA West members topped $1.2 billion for the third consecutive year, but the number of writers reporting earnings slid by 3.5% to 5,227, the guild disclosed in its annual report to members via its membership and finance committee chaired by Aaron Mendelsohn. The WGA West said that late reports should result in a slight increase in employment levels compared to 2015.

The stats in the report — which will start hitting members’ mailboxes this week — underscore the uncertain state of show business economics. Negotiators for the WGA West, which has about 9,000 members, stressed that point repeatedly during the contentious negotiations with production companies, which saw a 96% strike authorization and a deal that was concluded an hour before the previous contract expired on May 1.

Hollywood screenwriters’ earnings slid 6.4% last year to $359.8 million, and the number of writers reporting earnings fell 10.2% to 1,693. TV writers’ earnings declined for the first time in five years by 1.7% to $860.9 million, and the number of writers working declined 1.9% to 4,284.

The guild noted that the actual numbers for TV writers’ compensation are worse, pointing out “these figures do not constitute all writer income in television, nor do they reflect downward pressure on writers’ overscale income as a result of the growth of short season orders and other changes in the television and new media industry.”

Collected residuals declined by 5.3% last year to $383.1 million, with drops of 7.5% in TV and 1% in film. But the WGA said the trend may reverse this year.
“A portion of the decline is attributable to late delivery of checks at the year end, which moves those amounts into the 2017 accounting period,” the report said. “In addition to that, 2017 receipts are strong and the decline in 2016 appears to be an exception rather than a trend.”
Residuals from new media — a flash point for the 2007-08 strike — have posted substantial gains since the work stoppage. New-media reuse of TV programming jumped 15% last year to $41.6 million while new-media reuse of films gained 5.7% to $19.7 million.
The report was posted on the WGA West website for the first time on Wednesday. The new report also includes a bright picture of the WGA West’s financial outlook from the membership and finance committee. It disclosed that the WGA West ended its fiscal year, which concludes March 31, with total net assets of over $59 million.
“The Guild owns its headquarters free of mortgage debt,” the report said. “Our investments stand at $28 million, including a total of $18.7 million in our Strike and Good & Welfare Funds.”
The Guild said it had an operating surplus for the fiscal year of $6.2 million based on total revenues of $34.3 million, up from $30.7 million last year. “The surplus was the product of growth in overall writer earnings, led by the television and new media sectors, and by investment gains generated from a strong equities market.”
Annual expenditures rose by $1 million to $28.1 million as the result of fewer staff vacancies and expenditures related to the guild’s preparation for the negotiations on its master contract. “The bulk of negotiations-related expenditures, however, will be recorded in the first quarter of the 2017-18 fiscal year,” the report added.
Additionally, the WGA West disclosed that the Guild’s Foreign Levies Program distributed $14.6 million to writers and heirs during the last fiscal year. It’s the fifth year in a row that the guild, which began distributing the funds in 1993, has made the foreign levies report to members.

The report said the WGA West has collected a total of $225 million in foreign levies and distributed $193 million of those funds to members. It generated $71,864 in interest from those funds with $779,900 in “administrative fees” for distributing the funds.

The report from the finance committee reported that the WGA West was holding $19.3 million in “funds held in balance” 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.

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, signed in June 2010, included an agreement by the WGA to use its “best efforts” to pay all foreign funds within three years.

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