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Hollywood Exhales: No Writers' Strike -- 'Groundbreaking' WGA Pact Reached

4 May, 2001 By: Staff Reporter

Negotiators for the Writers Guild of America and the Association of Motion Picture and Television Producers were all smiles Friday as they announced a tentative agreement on a new three-year labor contract that will increase writers' payments by $41 million over the three-year term of the contract.

The tentative agreement was approved unanimously by member companies of the AMPTP and by the WGA negotiating committee. The agreement will have to be ratified by the 11,500 members of the WGA. The first step in that process will be a board meeting of WGA members scheduled for early next week.

"This is the most difficult negotiation we've had in many years because of the complexity of the issues facing us today in the industry," AMPTP president Nick Counter said.

Mike Mahern, co-chair of the negotiating committee for the WGA, described the deal as including "groundbreaking improvements" for WGA members. Provisions of the deal include increasing the rate of residuals paid by the Fox network to 100% parity with ABC, NBC and CBS within two years. Fox had historically paid 66% of the residual rate paid by the Big Three networks. The deal also lifts caps on residuals for foreign sales of film and TV programs. Writers will now receive 1.2% of foreign revenue after specified thresholds have been met, which will amount to an increase in foreign residuals of $1.3 million.

Under the new deal, residual payments for programs airing on such pay TV channels as HBO and Showtime will increase significantly from $300,000 per year under the old contract to nearly $4 million per year. The residual rate for programs airing on basic cable, which had been a contentious issue in the contract talks, will increase 20% over the term of the contract. Residuals for DVD and video sales will grow by $1 million over the life of the contract. The basic minimum payment for film and TV projects will increase by 3.5%, or $29 million, over the three-year contract.

The deal also establishes a rate for the distribution of films through video-on-demand services. The WGA and AMPTP agreed to continue discussions on how to compensate writers for video-on-demand downloads through online distribution systems. The contract also includes provisions for compensating writers for material exhibited on the Internet.

On the creative rights issues, the WGA agreed to continue discussions with the AMPTP and the DGA on the controversial director's "a film by" possessory credit. The WGA and the DGA will establish a joint committee to discuss creative issues.

"To avoid a strike, we agreed to address this issue in industrywide negotiations," Mahern said.

Executives on hand for the announcement included Paramount Pictures chair Sherry Lansing, Viacom Entertainment Group chief Jonathan Dolgen, CBS Television president and c.e.o. Leslie Moonves, Warner Bros. chairman and c.e.o. Barry Meyer, Warner Bros. president and chief information officer Alan Horne, the Walt Disney Co. co-president Robert Iger and DreamWorks partner Jeffrey Katzenberg.

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