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Hollywood Writers’ Earnings Jump 2.8% to $1.41 Billion in 2017

Members of the Writers Guild of America West saw their earnings surge 2.8% to $1.41 billion in 2017, thanks to mostly to gains in feature films and new media residuals.

Total covered earnings for WGA West members topped $1.2 billion for the fourth consecutive year and the number of writers reporting earnings rose by 1.8% to 5,819, the guild disclosed in its annual report to members via its membership and finance committee, chaired by Aaron Mendelsohn.

The stats in the report — which started hitting members’ mailboxes this week — underscore the healthy state of show business economics. Negotiators for the WGA West, which has about 9,000 members, stressed that point repeatedly during last year’s 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, 2017.

Hollywood screenwriters’ earnings surged 6.1% last year to $420.9 million, and the number of writers reporting earnings rose 3.9% to 1,940. TV and digital platform writers’ earnings edged up 1.4% to $976.3 million, and the number of writers working declined by 13 to 4,670.

The guild noted that the actual numbers for TV writers’ compensation are not reflected in its figures because they do not include overscale income. “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 digital media industry,” the report said.

Revisions in short-season compensation were a key part of provisions of the second year of the new master contract, which went into effect May 1. The master contract is jointly negotiated with the WGA East, which has about 5,000 members. The WGA West report only covers compensation to WGA West members.

Collected residuals jumped by 11.8% last year to $430.7 million, with new media representing a jump of 56.9% from $41.09 million to $64.49 million or nearly a quarter of all TV residuals collected. Residuals from new media — a flash point for the 2007-08 strike — have posted substantial gains since the work stoppage and have more than quadrupled since 2012, making it the largest single residuals category. Foreign free TV and basic cable was the second-largest residuals category with $56.6 million, followed by pay TV for feature films with $52.7 million.

The report was posted on the WGA West website for the first time on Thursday. 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 concluded March 31, 2018, with total net assets of over $67 million.

“The guild owns its own headquarters located at the corner of Third Street and Fairfax Avenue, where long-planned building renovations are now underway,” it added. “The work includes exterior painting, an upgrade of the first floor member lounge and a soon-to-begin expansion of the second floor Del Reisman Multipurpose Room.”

The guild reported an operating surplus for the fiscal year of $8.2 million based on total revenues of $39.2
million, up from $34.3 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,” it added.

Annual expenditures of $31 million were up nearly $3 million due to the costs of renegotiation of the master contract and preparations for the upcoming renegotiation of the WGA’s franchise agreement with the talent agencies, known as the Artists’ Manager Basic Agreement.

The WGA West is currently in a battle with the agents over what’s perceived by the guild as potential conflicts of interest due to the agencies moving aggressively moving into production. The WGA told members on April 6 that it had sent the Association of Talent Agents a 12-month notice to terminate the existing deal, and has asked for extensive changes in how agents do business. The terms and conditions of the current agreement will remain in effect through April 6, 2019, but will expire if a new agreement is not reached.

The report also disclosed audited financial statements showing that the guild’s Foreign Levies Program distributed $21.9 million to writers and heirs during the last fiscal year, a record high for the program, which currently collects royalties in 19 countries in Europe and South America.

It’s the sixth 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 $250.3 million in foreign levies and distributed $215.1 million of those funds to members. It generated $163,581 in interest from those funds with $1.16 million in “administrative fees” for distributing the funds.

The report from the finance committee reported that the WGA West was holding $20.1 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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