A Brief History of Hollywood Residuals

Residuals. They represent money that every entertainment union in Hollywood collects, one way or the other. For SAG, the DGA, and WGAw residuals mean money from broadcast, cable, and home video that flows directly into individual guild members' pockets. For the IATSE and its various Hollywood unions and guilds, it means money that goes from the same sources into the Motion Picture Industry Pension and Health Plans... For better or worse, that was the way the residual pie was divvied up back in the late fifties. The collective wisdom then was: the "above the line" guilds represent fewer people in their crafts, so they'll cut residuals on an individual basis; the IA and teamsters rep big film crews, therefore they'll get residuals via their health and pension plans. This is the way it's been ever since, and the formula has caused unhappiness, particularly among animation writers working under TAG contracts. They see their live-action counterparts collecting extra checks, and want the same. They see the animation writers working on Fox's prime-time shows ("The Simpsons," "Family Guy," and "American Dad") getting residuals, and believe -- non unreasonably -- that they deserve them too. Money -- especially in Tinsel Town -- is how everyone keeps score. And writers want (as everyone wants) more cash showing up on their scoreboard. The Animation Guild has made runs at an "above-the-line" residual structure on lots of occasions. In 1943, the Screen Cartoonists Guild (our predecessor) proposed residuals and got shot down. The writers and actors had residuals on the table numerous times before Ronald Reagan finally got a residual deal in 1960. The guilds have struck for residuals, or better residuals, repeatedly over the years. What about TAG? In 1994, TAG President Tom Sito worked to rally support for a residual proposal on behalf of animators, board artists, animation directors and writers. Because key players were reluctant to stick their necks out publicly, the proposal died. The Animation Guild's negotiating committee in 2000. Earl Kress, TAG Vice-President, is second from the left in the second row. Earl, a veteran animation writer, has been one of TAG's strongest advocates for animation writers In 2000, animation writers made up a majority of The Animation Guild's negotiation committee and spent months crafting residual proposals. They (and I) spent nine months negotiating with animation producers over the issue. It was like negotiating with a cinder block wall. In the end, they got substantial improvement on freelance health and pension benefits...but no WGA-style residuals. The negotiating committee recommended a "no" vote to TAG's membership, but the contract was approved by a wide margin (83%-17%). Members sometimes ask me: "Why don't we have SAG/WGA/DGA type residuals?" I tell them, because we don't now have the leverage. And I go further than that: Nobody now has the leverage. Not the DGA, not SAG, not the WGA east or west. If they did, SAG and every other union would now be getting residuals on 100% of DVDs, not the 20% they currently endure with gritted teeth. At the time TAG was negotiating for a different residual structure, WGAw President John Wells was drawing a bright line in the sand for his members. He declared that getting improvements in the DVD residuals was a do-or-die issue, a reason for hitting the bricks. But in the end, there were no residual improvements and no strike. When push came to shove, the WGA looked at cold, hard reality and blinked. Like every other union blinks in this cruel, corporatist age. The playing field was more or less level in 1960, but now it's closer to a steep cliff. The conglomerates against which Hollywood labor negotiates every three years can take multiple punches without showing a bruise, and everyone knows it. While a six or nine-month strike would gut labor's pension and health plans, it would put little more than small dents in the bottom lines of News Corp., Viacom, Time-Warner or Disney. If NO union or guild now had residuals, it would be difficult to get them at all in today's climate. It's not a fact that brings me joy, but fact it is. You only get big improvements in collective bargaining agreements when you have big leverage. Without it, you settle for small, incremental improvements. Sadly, "incremental" is the watchword in 2006.