AMPTP relesase 'Fact Sheet' on the WGA

December 2, 2008 by Lance Carter

Looks like the AMPTP is now accusing the WGA of misleading the public on their non-payment of New Media residuals.

Here’s the press release:

FACT SHEET:
THE WGA’S MISLEADING ALLEGATIONS REGARDING NEW MEDIA
RESIDUALS
· On November 19th, the Writers Guild of America issued a press release alleging that
Hollywood studios “are not paying residuals for writers’ work that is reused on new
media.”
· The WGA issued its press release just as a federal mediator was about to bring SAG
and AMPTP together. In addition, the WGA made its complaint about new media
residuals without first asking any of the Companies to help resolve any outstanding
issues, as is customary practice.

· The WGA’s press release was highly misleading and seems to have been designed to
poison the atmosphere for the federal mediation rather than to actually ensure that
residual payments are made to working writers.

· Here are the actual facts, in a nutshell:
STREAMING
o Some studios have either made streaming payments to the WGA under the
new formula, or are set to make those payments this week. The remaining
studios are still working to program their residual systems to incorporate the
new formulae. Some will process the payments manually in the meantime.
Interest will be paid on any late payments.
o Further, studios have been making residual payments all along for Temporary
Downloads, as well as Permanent Downloads (called Electronic Sell-Through,
or EST). EST residuals for programs released before February 13, 2008 have
been included in the DVD payment structure, contrary to the WGA’s press
release that payments were not being made for the reuse of writers’ work on
new media.
2
o Even before the WGA issued its press release, studios had informed the WGA
that new systems were being put in place to calculate and distribute streaming
residuals. WGA was further informed that even though the new systems were
difficult, costly and time-consuming to implement, steady progress was being
made. Complexities of the new procedures include:
§ An unprecedented number of new formulas for residual payments for
film and television streaming, permanent downloads (EST), and
derivative and original made for new media programs that needed to
be programmed.
§ Payment systems must account for a variety of new variables,
including platform, release window, library vs. current product and
allocations to each Guild and Union.
o WGA also knew that, to the extent the difficulties in creating these new
systems delayed payments beyond their due dates, the studios would owe
interest payments as called for by the labor agreement.
o WGA knew all of this and nonetheless issued its press release.
· The WGA knew all of these facts, but decided to misuse the issue of new media
residuals for the Guild’s own partisan purposes. Instead of working cooperatively
with the Companies to resolve any outstanding issues, the WGA went public on the
eve of the crucial SAG-AMPTP federal mediation. This move was blatantly
designed to disrupt that mediation and help justify SAG’s eventual decision to reject
the AMPTP’s offer and end the mediation. In short, AMPTP and the studios are
dealing with the issue of new media residuals substantively, while WGA is more
concerned about playing politics with the issue tha n with ensuring that working
writers receive payment.
ELECTRONIC SELL-THROUGH (EST)
· Also on the eve of the federal mediation, the WGA filed an arbitration claim
disputing the way AMPTP was interpreting certain language in the new agreement.
o WGA filed this arbitration claim to generate the kind of media coverage
that would poison the atmosphere just prior to the start of federal
mediation.
o The language at issue in the WGA agreement is exactly the same language
that was included in each of the Guild and Union contracts negotiated this
year. No other Guild or Union has ever questioned the interpretation of
the language. No one else has ever suggested that the language means
anything other than what it clearly says.
3
o Here are the specific details on the language that WGA has disputed:
§ The newly-negotiated terms for EST are consistent among the
WGA deal and those labor pacts negotiated by the DGA, AFTRA
and IATSE. The language (see below) clearly specifies that the
terms shall apply to motion pictures (e.g., TV and features)
released after the start of the new WGA contract, February 13,
2008.
§ The following is the language on permanent downloads (EST) as
laid out in Section 1.b. of the “Sideletter on Exhibition of Motion
Pictures Transmitted Via New Media” (as taken from the Final
Memorandum of Agreement sent to WGA on Feb. 21, 2008):
“Paid Permanent Downloads (‘Download-to-Own’ or ‘Electronic Sell-Through’)
(‘EST’).
The following shall apply to motion pictures released after February 13, 2008:
If the consumer pays for an EST copy of a theatrical motion picture, the Company
shall pay residuals to the credited writer(s) at the rate of 1.8% of 20% of
Company’s “accountable receipts,” as that term is defined in Paragraph 3 below,
for the first 50,000 units and 3.25% thereafter.
If the consumer pays for an EST copy of a television motion picture, the
Company shall pay residuals to the credited writer(s) at the rate of 1.8% of 20%
of Company’s “accountable receipts,” as that term is defined in Paragraph 3
below, for the first 100,000 units and 3.5% thereafter.”