The WGA Deal

... as described by the WGA: ...

Your Negotiating Committee is pleased to inform you that a tentative agreement on a new Minimum Basic Agreement (MBA) has been reached with the Alliance of Motion Picture and Television Producers. Contract talks began on February 3rd and concluded last night.

The three-year deal features increases to our minimum compensation rates, increased contributions to our Pension Plan, minimums for subscription video-on-demand programs, increased residuals for ad-supported streaming, outsized increases in script minimums for one-hour basic cable writers, and a doubling of the theatrical script publication fee.

Importantly, we have now placed limits on the options and exclusivity requirements often imposed on episodic television writers. Our negotiations on these issues were complicated and protracted, but the Companies worked with us to find solutions. As a result, the endless unpaid holds that have become more and more commonplace in television have now been addressed in the MBA for the first time ever.

In addition, the AMPTP's proposed multi-million dollar rollbacks in health and pension contributions, screenwriter minimums, and TV residuals were taken off the table and are not part of this agreement.

Your Negotiating Committee has voted to send the tentative agreement to the WGAW Board of Directors and WGAE Council for approval prior to member ratification.

Highlights of the tentative agreement include:

Minimums

Annual minimum increases for most types of programs and residuals: 2.5% the first year and 3% in years two and three.

Outsized annual increases (5%/5%/5%) in script minimums for hour-long dramatic basic cable series after the first season.

Pension

A 0.5% increase in the contribution to the Pension Fund effective May 2, 2014.

Subscription Video on Demand (SVOD)

On SVOD platforms with more than 15 million subscribers (like Netflix), network primetime minimums will now apply to dramatic programming with budgets above $2 million for 30-minute programs; $3.7 million for one-hour programs; $4 million for 90- minute programs; and $4.5 million for two-hour programs. Basic cable rates will apply to programs below those budget breaks on those same platforms, or on SVOD platforms with less than 15 million subscribers as long as budgets are at least $1.3 million for half-hour programs; $2.5 million for one-hour programs; and $3 million for programs longer than one hour. This provision includes nearly the full complement of television separated rights.

Ad-Supported Streaming Residuals and Streaming Window Changes

The residual for ad-supported online streaming will increase to 4% of the applicable minimum for each six-month period during the first year of the contract, 4.5% for the second year, and 5% for the third year. For the first time, on-demand reuse of shows on a cable set-top box will be included as part of the streaming residual.

The free streaming window is reduced from 17 days (24 for new shows) to seven days for most programs after the first seven episodes of a series. Broadcast shows will be subject to an additional seven-day window for each rerun.

Theatrical Script Publication Fee

The theatrical script publication fee will double from $5,000 to $10,000.

Options and Exclusivity

Effective January 1, 2015, the MBA will place two important limits on the provisions a Company may negotiate in the personal services agreement of an episodic television writer who earns less than $200,000 per contract year: (1) the agreement may not require that the writer be exclusive to the Company except during periods when the writer is being paid for his or her writing services; and (2) the Company may not hold a writer for more than 90 days under a negotiated option agreement without paying a holding fee of at least 1/3 of the MBA minimum for the writer's services. If the Company chooses not to pay the holding fee, the Company must allow the writer to accept an offer of other series employment, or if the series has been renewed, it may exercise the option and put the writer back to work. On January 1, 2016 the threshold will increase by 5% to $210,000 per season.

Talks between the WGA and AMPTP concluded last night.

The IATSE will be negotiating with the AMPTP in about twelve months. TAG will follow shortly after. There's a likelihood that IA and Animation Guild pension, health and wage increases will follow the pattern set down by the DGA, WGA and (soon) the SAG-AFTRA.