The Alliance of Motion Picture and Television Producers (AMPTP) has presented a final, three-year contract offer to the Writers Guild of America (WGA) that offers no adjustment to the calculation of r
LOS ANGELES -- The Alliance of Motion Picture and Television Producers (AMPTP) has presented a final, three-year contract offer to the Writers Guild of America (WGA) that offers no adjustment to the calculation of residuals for DVDs and VHS tapes.
Home video residuals have been a point of contention between the organizations since the WGA's contract expired May 2. The AMPTP made its final offer June 1.
The current residual formula-created in the '80s-gives writers 0.3% of the first $5 million in wholesale revenues. The percentage increases to 0.36% when a title generates more than $5 million in wholesale sales.
The AMPTP is, however, offering the WGA a "favored-nations clause" to renegotiate video residuals in June 2005 if the AMPTP adjusts its formula with the Directors Guild of America or the Screen Actors Guild.
The WGA, which has West and East branches, is seeking to continue negotiations with the AMPTP.
In a statement, WGA West president Daniel Petrie Jr. says, "As it currently stands, their so-called final offer for a three-year contract is unacceptable. As for DVDs and videocassettes, the current formula is based on a 20-year-old business model that is both outdated and unfair. Yet the companies refuse to offer any increase."
AMPTP president Nick Counter says in a statement, "With regards to DVDs, we feel it is crucial for the current and future health of the industry that we maintain the status quo. In an era of escalating costs, when box office revenue no longer covers expenditures, DVDs have become a primary revenue source for feature films.
Further burdening a film's revenue stream without, at the very least, recouping production, distribution and marketing costs is simply fiscally irresponsible."
Leading up to the negotiations last December, the WGA sent a letter to its members stating that writers received "less than one-sixth of 1%" of DVD revenues in 2002. The WGA said writers received $18 million of the $11 billion that DVDs generated two years ago.
The AMPTP and the WGA are also negotiating other issues, including increases in health-fund contributions, residuals for Internet sales and the extension of guild jurisdiction to reality-TV writers.