WGA, Hollywood Make A Deal

The Writers Guild of America said Oct. 13 that it has reached a new three-year contract with Hollywood's major studios and networks. The $58 million package boosts health-care contributions, minimums

(The Hollywood Reporter) -- The Writers Guild of America said Oct. 13 that it has reached a new three-year contract with Hollywood's major studios and networks. The $58 million package boosts health-care contributions, minimums and pay-television residuals, but failed to get a bigger share of DVD residuals.

The deal came just two days after the joint negotiating team of WGA West and WGA East got back to the bargaining table with the Alliance of Motion Picture & Television Producers, ABC, NBC, CBS and Fox at AMPTP's Encino, Calif., headquarters. The union's 11,000 members have been working without a contract since June 2, when they rejected the alliance's final offer as inadequate.

The new Minimum Basic Agreement nearly doubled the AMPTP's original $32 million offer, thanks largely to the pattern bargaining established by the DGA in the new contract it secured last month. The DGA abandoned the DVD fight to focus on health care and was able to boost its fund by more than $40 million during the next four years.

The WGA's new contract goes into effect Nov. 1 and expires Oct. 31, 2007. Because that is in the middle of the TV season, the writers believe they will have extra leverage through a threat of a strike in the next round of contract talks. The union also will be better aligned with the other creative guilds in terms of the timing of their contract-expiration dates.

The deal terms will not be retroactive to May 2, when the old agreement expired.

"We consider this a major victory that was critical to protect the health benefits of writers and their families," WGAW president Daniel Petrie Jr. said. "There's no question that it was painful for the companies to pony up much more money than they had to, but it was also painful for us to not be able to achieve a number of things we wanted to like increases in DVDs."

The $58 million package was based on $37 million in health gains (compared with the $10 million-$12 million offered in June), $20 million in increased minimums and $1 million in added pay-TV residuals.

Additionally, the WGA said its members will enjoy greater pension benefits, as the contribution cap has been raised from $170,000 in earnings to $205,000. Also, the maximum a writer can withdraw annually from pension earned from any one company has been raised from $140,000 to $150,000.

The companies' contribution to the WGA's health plan will increase from 7.5% to 8.5% and possibly to 9% in the last year of the contract if the increase in minimums is reduced by the same half percent. That should leave the health plan with a six-month reserve at the end of the contract.

Minimum earnings will increase 3% annually in most categories and 2.25% for reruns on network primetime and non-primetime serials.

Made-for-pay-TV residuals will increase 20% for half-hour shows and 15% for one-hour series.

The union was unable to get the AMPTP to agree that movies sold over the Internet should be covered by the same formula (1.2% of the full licensing fee) that was agreed upon in 2001 for Internet-downloaded movie rentals. Instead, the union and studios will form a joint committee to discuss the issue.

And in one of a handful of concessions, the WGA agreed that two of the first three episodes of a new TV series can be rerun within two months of the launch without paying residuals.

"The deal includes some rollbacks for TV writers and news writers and only very minor gains for screenwriters," WGAE president Herb Sargent said. "Nevertheless, our negotiators believe that this was the best deal possible at this time. Now it's up to our members to decide."

On Oct. 15, the negotiating committee for the WGA West and WGA East approved the tentative new contract, recommending that the union's 11,000 members ratify the contract.

The date for the ratification vote will be determined in the next few weeks.

Two major Hollywood labor contracts remain unresolved. The American Federation of Television & Radio Artists opened negotiations on its Network Code in New York the week of Oct. 11. That union and the Screen Actors Guild will then jointly bargain with the AMPTP on a new TV/theatrical deal.