Saturday, May 05, 2007

Residual Money Withheld?!

The new L.A. Weekly has a long article about how the WGAw hasn't forked over "foreign levies" money that's owed to writers -- both members and non-members of the WGA -- who have earned it. In a nutshell:

“Residuals,” “foreign levies,” “net profits” — all are synonyms for cash that is supposed to find its way back into the pockets of the men and women who create movies and TV programs. That little or none of it gets there much of the time has evolved into something of a standing joke in Hollywood, where money vanishes as quickly as the mythical rolling break-even point that feature films, TV dramas and sitcoms seldom seem to reach.

The L.A. Weekly alleges that the WGAw is sitting on a mountain of cash which flows into guild headquarters from various foreign collection societies, but seldom gets to the bank accounts of the writers for whom it's intended. Per the Weekly:

...angry writers say they have evidence of a.. disturbing guild practice: its diverting of 92.5 percent of writers' pay from foreign airings of their works to Holywood studios, producers and, perhaps most galling, to the Writers Guild of America West itself. Since 1990, these critics contend, the guild has quietly been paying a king's ransom in which writers' foreign earnings -- far beyond the $20 million in whithheld checks...without the writers' agreement or knowledge.

And how did this problem of non-payments to scribes start? The Weekly tells it like this:

Guild vice president Carl Gottlieb, in a posting to a popular WGA members’ blog called Writer Action, says the foreign-levies diversion scheme was originally hatched in 1990 by two studio lawyers and then–WGA executive director Brian Walton. According to Gottlieb — and later confirmed by WGA general counsel Tony Segall — attorney Jay Roth (who later became DGA executive director and was paid over $1 million last year) and MCA/Universal general counsel Robert Hadl (now on annual WGA retainer at $150,000, plus $300 an hour and expenses) came to Walton with a proposition: If they could persuade foreign collecting societies to turn over their revenue to the WGA, this promising new income stream for writers could be shared with the guilds and studios, including Hadl’s.

“The alternative to the deal was to leave the money offshore while fighting a protracted global legal battle with an uncertain outcome, which included strong arguments on all sides over which contract and national law was applicable,” Gottlieb argued.

According to Gottlieb and Segall, Walton informed the WGA board what he had done — but there was never a board vote on the matter. Nor were the pacts that the WGA negotiated with each foreign collecting society and the Hollywood studios ever submitted to guild members. Further, no one among the WGA hierarchy explained to member writers — or nonmembers — what they had done.

Just so you know, I griped about this back in the early nineties. When I found out about the deal, I wrote a letter to Walton complaining about the weak terms he'd negotiated for writers he didn't represent. (At the time, the WGAw repped zero animation writers.)

Walton said I should have been "grateful" for his efforts.

Funny thing is, I wasn't grateful then and I'm not now. If terms are going to be negotiated on your behalf, it would be nice to get told about it. Walton didn't bother.

Update: There are various Writers Guild members who say that Dennis McDougal is wrong on several points in the linked article: 1) He misrepresents the amount that writers are supposed to get under the Berne Treaty, 2) he ignores the Federal work-for-hire law passed in the 1920s, 3) he downplays the difficulties of locating non-WGA writers.


Stefan Avalos said...

McDougal's article is as accurate as is possible, given the tight lipped nature of everyone involved right now.

I invite you to read the article I've written about the foreign levies situation, which will be appearing in the upcoming FADE IN magazine. It is presently online.

I address the difficulties of locating non-guild writers and directors.

I would very curious to hear comments about this.

Stefan Avalos

for the story:
or go straight to:

Steve Hulett said...

This will be an ongoing issue, I'm sure.

Over the years TAG has supplied the WGA and DGA with many addresses.

Anonymous said...

As a member of WGAw, I believe it would serve us all if you could recall in detail your conversations with Mr. Walton in 1990, and the specifics of what you thought was wrong with the deal back then. WGAw's culture changed back then; what had been an often contentious participatory near-democracy became secretice and top-down. That could have been one of the consequences of the improprieties in this deal.

Anonymous said...
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Steve Hulett said...

Not a lot of detail to tell. I wrote the letter of complaint. I got no reply.

Brian Walton and I spoke a couple of times, had lunch once. If memory serves, I didn't bring up the foreign levies issue. We never considered litigating it, since we didn't see the cost-benefit.

Steve Hulett said...

As to what I thought was "wrong" with the deal? I thought the percentages were pretty low; I was astounded that the WGAw felt it could negotiate for writers it didn't represent, and without so much as a by-your-leave.

Just imagine if the IATSE had trotted off to Europe and negotiated a levies deal for writers, all by itself. Without telling anybody. Multiple lawsuits would have been the order of the day.

Jeff Massie said...

One of my jobs at the TAG office is to respond to requests for address updates.

When Steve Hulett learned that the WGAw and DGA had negotiated foreign levies deals on behalf of animation writers and directors, he insisted that they keep in touch with us so we could keep their addresses up-to-date for people due the monies.

Since then DGA had been diligent about contacting us, at least twice a year, with lists of directors they haven't found on their rolls. And I have always promptly responded.

WGAw sent us a list not long after Steve H.'s unpleasant conversation with Brian Walton, to which I again promptly responded.

I know that several writers on that list have gotten a few checks since then (one of them being Steve Hulett himself.) However, since that first request, WGAw has never gotten back to us for any corrections or additions to their list.

That was at least ten years ago.

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