Tuesday, August 31, 2010

Roth 401(k)s?

Some participants in the TAG 401(k) have asked,

"Why don't we have a ROTH 401(k) option? You think we can get one?"

To which I always say, "The trustees of the Plan will look into it."

(Kindly note that regular 401(k) deductions are pre-tax -- meaning no state or federal income taxes are paid on the money when it's placed into your 401(k) account, but only when it does the other way. Roth 401(k) deductions are after tax -- taxes are paid on the up-front contributions but not on the withdrawals.)

So which is better, a Roth 401(k) or standard-issue 401(k)? Today Michael Viljak of 401(k) Advisors presented me with this:

... A mistake that people make when comparing regular [401(k)] deferrals to Roth deferrals is that they assume that the retirement benefits of participants will be distributed and taxed as a lump sum at retirement. However, most retirees roll over to IRAs. So, the real question is: How much will participants take out—and be taxed on—each year?

... [F]or the typical husband and wife filing a joint return, they can earn about $20,000 a year without paying any taxes. In other words, the first $20,000 that they receive from a taxable IRA will be tax-free.

For a withdrawal rate of 5%, a partic­ipant should have at least $400,000 in a non-Roth, taxable account—to take advantage of the tax-free $20,000; it is better than Roth—tax deductible when deferred and tax-free when distributed. Furthermore, the first dollars over that amount will be taxed at the lowest tax rates, lower than the top marginal tax rates the participant paid while employed—and, therefore, lower than the taxes the participant would have paid if he had made a Roth contribution. ...

Of course, the tarantula in the ointment is: Nobody knows where tax rates will be twenty ... thirty ... or forty years hence.

I have a simple rule of thumb. If you can avoid paying a tax today, by all means do so. Somebody in the top income tax brackets (state and federal) can shelter $16,500 per year from Uncle and Arnold by enrolling in TAG's 401(k) Plan. As of January 1st, when income tax cuts expire (as mandated by the 2001 legislation), total state and federal taxes for the top rate in California will be around 50%. If you were to deduct $400 per week into the 401(k), your take-home would drop by a mere $200, since you're not paying tax on the deductions.

Unless you want to leave the money tax-free to heirs, or plan to stay in the top bracket in retirement (good luck with that), you're likely better off taking the tax deferral up front instead of the back end. (But if you're hell-bent on leaving a large stack of tax-free loot to little Timmy and Becky Sue, you can still fund a ROTH IRA outside the 401(k).)

My advice is to take the deduction while you're making a higher salary, and worry about what kind of taxes you'll pay in retirement when you're kicking back in your rocking chair. Decades from now, there will still be ways to minimize your tax bite.

As for that Roth 401(k) option, we'll take it up at the next trustee meeting.

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"History Detectives" finds our story in some cels ...

Watch the full episode. See more History Detectives.

Here's the episode of the PBS History Detectives show from last night (as I posted on Sunday), in which they interviewed Mike Van Eaton, Dori Littell-Herrick, Jerry Beck and Martha Sigall in their search for the story behind some animation drawings and cels found in a salvage yard in Berkeley.

It's an interesting episode (the first eighteen minutes are about animation), and it has a connection to the story of our union.

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The Disappointment Delivers

What I always love about the major media is that they glom onto a storyline and stick with it, no matter what the facts actually are.

Take for instance the fourth installment of the Shrek franchise. Over and over, it's been labeled a weak sister to its brawny franchise siblings, a "disappointment" at the box office, an obvious reason why there will be no more Shreks, etc., etc.

So it's startling to read this:

Cowen analyst Doug Creutz raised his estimate for "Shrek Forever After" international box office revenue to $500 million from $450 million Tuesday ... "Shrek Forever After" will likely become DreamWorks' highest international grossing movie ever, Creutz said.

DWA's highest-grossing movie in the lands beyond the seas. Of all time.

Not bad for a disappointment, yes?

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Monday, August 30, 2010

Is It All Going To ...


... In a year of slashed budgets, buyouts and layoffs, Digital Domain's John Textor made a pitch to the city on Monday that business and political leaders are hailing as West Palm's saving grace.

Textor and the city made public what they've been discussing behind closed-doors under confidentiality agreements for months — the proposal to bring a digital animation college, in conjunction with the Florida State University Film School, to the city-owned Tent Site, at Okeechobee Boulevard and Dixie Highway ...

Textor's company, Wyndcrest Holdings, in 2006 bought a majority share of Digital Domain, a visual effects company founded by Titanic director James Cameron. ... Since announcing the creation of the Port St. Lucie studio, Textor had to overcome several hurdles, including allegations from State Rep. Carl Domino that Textor had improperly received $20 million from the state to help fund the studio. ...

Many digital animation jobs are moving overseas, and Textor said his company and other Hollywood studios could work with the school to train and hire young, moderately paid workers. ...

(Let's hope there aren't a lot of interns who end up doing production work for free.)

On a more serious note: some work will go out of country due to cost issues, a lot of work will stay in-country due to quality and deadline issues, and various states will be fighting each other to develop training and infrastructure within their borders.

California will continue to have a large talent pool, deep training, and established studios.

We'll see who prevails over the next couple of decades. My guess is a lot of different parties will grab smaller slices of a much larger pie and see their overall employment numbers rise, even as they lose market share. (That's what's happened in the Golden state, 1970-2010.)

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That Other Animation Empire -- Video Games

Flipping through news reports, I came across these nuggets of information from the Entertainment Software Association's 2010 Report regarding Video games in the 21st century.

• The U.S. computer and video game software publishing industry directly employs more than 32,000 people in 34 states. Product (GDP) was $4.9 billion. ...

• The real annual growth rate of the U.S. computer and video game software industry was 10.6% for the period 2005-2009 and 6.7% for the period 2005-2008.

• The total U.S. employment, both direct employment in the U.S. computer and video game software publishing industry grew at an annual rate of 8.65%.

• In 2009, the average annual compensation per employee (wages, salaries and employer contributions for pensions, insurance and government social insurance) was $89,781.

The gaming industry is a lot like the traditional animation biz. It uses talent from all over the world, it locates big studios in lower wage geography, also higher wage geography, and points in-between.

Because what it wants is a large group of trained, experienced artists and technicians who can add value to the product. (And there is minimal value created when a low-cost facility in, say, Bangladesh creates a lower profit video game ...)

My takeaway from all this is: when an industry segment in the U.S. of A. grows at 8.65%, it's staying at least halfway competitive with the rest of the world. (My guesstimate here would track what I know of the animation industry ins Southern California. Though growth numbers are positive, California owns a smaller slice of a rapidly growing pie than previously ...)

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Sunday, August 29, 2010

Hand-Drawn (sort of) Indie Feature

The New York Times details a new animated offering.

... Opening on Sept. 1 at Film Forum in the South Village, “My Dog Tulip” features the voices of Christopher Plummer as Ackerley, the writer and longtime BBC radio host; Lynn Redgrave, who died in May, as his nettlesome sister; and Isabella Rossellini ... The heart of “My Dog Tulip” is Mr. Ackerley’s story of his late-middle-age relationship with an Alsatian named Tulip. Bittersweet, heartfelt and rendered in an eccentric, expressive style, the movie seems poised to draw dog-loving moviegoers like beagles to bacon. ...

Unlike studio cartoons, which often involve computer-generated imagery, the Fierlingers’ work is hands-on, sort of. What’s eliminated is wasted motion: the shuffling of paper, the sharpening of pencils, the setting up of shots. ... The Fierlingers use French software called TVPaint ...

My Dog Tulip probably won't get a 3,000 theater roll-out from one of our fine conglomerates, but it's nice to know that independent animators are creating their own ninety-minute movies and getting written up in major metropolitan dailies. It should give other artists hope.

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Martha Sigall to appear on "History Detectives"

Above: Locked out but happy -- strikers at Warner Bros., 1941. Left to right: Ben Washam (later president of Local 839), Roy Laupenberger, unknown, Paul Marin, Martha Goldman (Sigall).

Martha Sigall will be appearing tomorrow night (Monday, August 30) on the PBS show "History Detectives", in a segment about animation drawings and cels.

Martha worked in the animation business for fifty-three years as an inker, painter and cameraperson. She received the Animation Guild's Golden Award in 1986 and ASIFA-Hollywood's June Foray Award in 2004. She is the author of the book Living Life inside the Lines: Tales from the Golden Age of Animation.

The episode will air at 9 pm on KCET. Check the PBS website for airing times and dates elsewhere.

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The Big Global Derby

A fresh injection of live-action epics have pushed animation further down the Victory Ladder, but various 'toony features are still raking in heavy coin:

Now in its 11th round on the foreign circuit, "Toy Story 3" in 3D actually picked up a bit from its prior round -- grossing $12.7 million from 5,261 venues in 41 markets for an overseas cume of $606.4 million ... DreamWorks Animation/Paramount's "Shrek Forever After" in 3D is still generating decent foreign numbers, $10.5 million in its latest round at 4,585 venues in 61 markets. Cume stands at $470 million. ...

DreamWorks Animation/Paramount's "How to Train Your Dragon," $274 million; ... Universal's "Despicable Me," $70 million (after a $2.8 million weekend from 1,330 screens in 26 markets) ...

So while The Expendables and The Last Airbender battle it out at the head of the field, the animated contingent keeps on trucking:

The Big Animated Four (2010)-- Worldwide Numbers

Toy Story 3 -- $1,012,126,000

Shrek Forever After -- $693,580, 461

How To Train Your Dragon -- $490,227,050

Despicable Me -- $301,302,000

Think about it. Four animated features. Two and a half billion dollars. That's only a quarter billion less than the live-action science fiction epic Avatar made.

Oh, wait ...

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Saturday, August 28, 2010

What? No Fake Three Dee?

I've enjoyed a bit of the current flurry of Dimensional Cinema, but much of movie 3-D seems mostly designed to separate audience members from their dollar bills. So this is encouraging:

... Warner Bros. announced that Zack Snyder's upcoming action movie Sucker Punch would be converted to 3-D ... Considering the movie is described as "Alice in Wonderland with machine guns" ... 3-D seemed an appropriate format. The one sticking point is Snyder, however ...

"It’s a definitive no. Maybe it’s Guardians‘ fault a little bit, because I’ve seen what really awesome 3D looks like. We talked about it at first, but I’ve been kind of broken by Guardians to the point that I said "Guys, there’s no way that we can do something that’s remotely close to Guardians, let’s not every try." ...

Snyder, of course, recently completed The Legends of the Guardians, the CG owl picture, in genuine Three Dee, and so knows what the real article vs. the post-production, tacked-on version looks like. And he's telling his fine, entertainment conglomerate "Na-ah."

I'm sure Warner Bros. is thrilled about his artistic integrity.

As for myself, I think I'm pretty much through with the moving View Master, as it makes my retinas ache. But everyone has to seek his own pathway through the carnival of life, therefore if you enjoy goggling at objects floating off the big, silver screen, by all means goggle.

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The Last-of-August Horse Race

Now with super-natural Add On.

Your Nikkster and mine delivers the early box office report:

1. The Last Exorcism (Lionsgate) NEW [2,874 Theaters]-- Friday $8.5M, Estimated Weekend $23.2M

2. The Takers (Screen Gems/Sony) NEW [2,206 Theaters] -- Friday $7.2M, Estimated Weekend $20.3M

3. The Expendables (Lionsgate) Week 3 [3,398 Theaters] -- Friday $2.5M (-51%), Estimated Weekend $8.2M, Estimated Cume $81M

4. Eat Pray Love (Sony) Week 3 [3,108 Theaters] -- Friday $2.0M (-46%), Estimated Weekend $6.4M, Estimated Cume $60.5M

5. The Other Guys (Sony) Week 4 [3,181 Theaters] -- Friday $1.8M (-40%), Estimated Weekend $5.8M, Estimated Cume $99M ..

In the meanwhile, the animated entries have dropped to a lower tier.

As of Thursday, Despicable Me was galloping along at #11, with $233.4 million in the saddlebags, while Toy Story 3, near the end of its domestic run, cantered smartly in 730 theaters with $404.6 million.

Add On: Box Office Mojo tells us that exorcism movies are back on top! (Just like in my youth!)

Meanwhile, animation is relegated to Level Two:

11) Despicable Me -- $2.7 million ($236.1 million total)

19) Toy Story 3 -- $1 million ($405.7 million total)

27) Shrek Forever After -- $180,000 (($238 million total)

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Friday, August 27, 2010

Tangled Poster (en Francais)

Diz Co. has unveiled new theater art ...

... and as charming as it is, it doesn't begin to do justice to the visuals I've seen in and around the hat building.

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Friday Studio Rounds

Another day of 401(k) meetings (most remarkably well-attended, despite the roller coaster markets.) Today was the Disney Toons meeting, and afterwards, I strolled about to discover ...

The fourth Tinkerbell video feature is well into boarding, and the first feature of the new series is getting put up on story-reels, with a screening for John Lasseter sooner rather than later. (I'm hearing October.)

Meantime, production board artists on Jake and the Neverland Pirates -- one of the series at Disney TVA Sonora (the street in Glendale California, not the city in Mexico) -- are starting to cycle off the show as the first group of half-hours gets completed. Work on a new bundle of Mickey Mouse Club house episodes will be starting up in November.

Quick reminder: the next 401(k) enrollment deadline is next week, September 1st.

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Obviously It's the Unions' Faults

A Hollywood company files bankruptcy, pointing to the culprits as it spirals down in flames.

AFTRA has formally rejected a settlement offer by producer Stanley M. Brooks to actors who worked on the 2008 Logo TV series "Sordid Lives," and filed a petition in federal court in Los Angeles to confirm the results of their previous arbitration award against Brooks and his company Once Upon A Time.

The DGA, WGA West and the IATSE Motion Picture Industry Pension and Health Plan have also rejected the offer from Brooks to settle $1.6 million in mostly in unpaid residual payments, for $242,000, or about 16 cents on the dollar.

Brooks' company, as a result, will declare bankruptcy shortly, his attorney Kenneth Suddleson said Friday.

Suddleson noted that his client had told the actors and writer-director Del Shores, as well as the guilds, that he would have no other choice if his offer wasn't accepted. ...

Shorter lawyer-speak: "Take our sixteen-cents-on-the-dollar offer, or we JUMP! Top of the world Ma!"

I don't know who's to blame here, since there seems to be generous dollops of bad judgement to go around, but the guilds and IATSE have kind of a fiduciary responsibility to go after moneys owed.

My favorite comment below the article:

Let him File For Bankruptcy! If he and his attorney are caught lying on the BK Federal Application they will both be prosecuted for BK Fraud! Also, all involved should attend the hearing of the creditors to Object To Discharge, state your reason why to the BK trustee and Judge and tell them to get Forensic Accountants to follow the money trail. Also, if you hate his attorney and find that he is liar, as well, you can file a complaint against his law license with the Bar Association. Let Brook's and his groupees go through the pressure of a Bk WITH OBJECTIONS TO DISCHARGE FOR FRUAD!

Under no circumstances can we tolerate fruad. That's beyond the pail.

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Thursday, August 26, 2010

End-of-Week Linkage

Now with sparkly gold Add On.

When in doubt, share links.

Futurama makes Fox-News Corp. some additional bucks.

"Futurama" is blasting into weekend off-net syndication.

The Matt Groening animated series, which just recently returned to first-run via Comedy Central, has been cleared by Twentieth TV on Tribune outlets in several top outlets for a fall 2011 launch ...

"With renewed interest in the animated series, thanks to its successful return on Comedy Central, we felt that this was the right time," Twentieth TV EVP/general sales manager Paul Franklin said ....

Farewell to animation director Satoshi Kon.

Satoshi Kon, a Japanese filmmaker and comic-book artist whose dazzling visual compositions and humane, emotionally resonant stories won him a devoted following in animation circles and beyond, died in Tokyo on Tuesday. He was 46.

The cause was pancreatic cancer, according to the Tokyo Shimbun news service and statements issued by Mr. Kon’s wife, Kyoko, and by Madhouse Studios, where Mr. Kon directed films ...

America's current reiligious dispute gets depicted by ever-popular Taiwanese 'toonage:

Like with many scandals before it ... animation company NMA brings you a comprehensive take on all of the controversy surrounding the "Ground Zero Mosque" debate. Inside, the the appropriately cartoonish interpretation.

Tech news: Red Hat and Jeffrey's place get together.

Raleigh-based Red Hat, the Linux software company, announced Wednesday that DreamWorks Animation - the Hollywood studio behind the Shrek franchise and a host of other animated hits - plans to use Red Hat's cloud computing software to help produce animated films.

DreamWorks has been at the forefront of cloud computing and is "building one of the world's largest private clouds with Red Hat," Paul Cormier, president of products and technology at Red Hat, said during a conference call ...

What do ex-Disney animators (Australian edition) do when the Mouse closes the studio? They start creating phone apps.

Tui Studios' directors Jonathan Dower and Kelly Baigent worked for Disney Toon Studios Australia as animators before it closed its doors in 2006. Inspired to work on their own projects they opened Tui Studios in Sydney's Inner West and now work on a wide variety of projects.

Tui’s latest release is Monster Melody Mash, a musical game that people can download onto their iPhone or iPad. ...

USA Today tells of the next animated feature in the lineup.

Legend of the Guardians: The Owls of Ga'Hoole, Sept. 24: Zack Snyder is known for creating savage, otherworldly realms in 2006's 300 and last year's Watchmen, but here he takes an abrupt turn into not just a family-friendly adventure but one in which the characters all have feathers. It's still a fantasy-adventure picture, but the young hero is an owl who dreams of finding the legendary armored brethren who can help him fight the predatory rivals terrorizing his home. "I wanted to do something that transcended animation, that was not a cartoon, but more like Avatar with owls," Snyder says ...

Here it is, America. Your human-animal hybrid. And high time, too.

... Chris Wedge and his WedgeWorks banner have dipped into their discretionary fund to pick up "Lives of the Monster Dogs," a postmodern "Frankenstein"-style novel by Kirsten Bakis. ...

"Dogs" revolves around a group of soldier dogs genetically engineered by mad Prussian scientists hiding in a Canadian village. The hyper-intelligent dogs, who walk erect and use voice boxes to communicate, revolt against their masters ...

WedgeWorks plans on developing the project, which would be live action and heavy with effects, before bringing it to Fox, with whom it has a production pact. ...

Lastly, since we've been on the subject of video pirates:

Warner Bros. and the Walt Disney Co. have teamed up in a new legal effort to choke off the air supply of various websites that post and index links to pirated movies. ...

The two studios aren't the first to attempt to crack down on piracy by targeting so-called facilitators. Adult entertainment publisher Perfect 10 sued Mastercard and Visa in 2004, alleging the two credit card companies provided "crucial transactional support services" to pirate websites. A district court dismissed the case, and later the Ninth Circuit upheld it, determining that Perfect 10 had failed to support any theory of liability against the defendants. ...

Add On: Congratulations to Pixar for creating Disney's second billion-dollar franchise in 2010.

... [Toy Story 3], which ranks seventh among all-time worldwide grossers, is expected to cross the $1 billion mark Friday, according to the studio, making Disney the first company to field two $1 billion blockbusters in the same year.

Earlier this year, Disney's "Alice in Wonderland," also crossed that line and currently stands in fifth place in the all-time worldwide rankings with $1.024 billion. ...

Have a life-affirming Friday. Strive to start your weekend no later than six pee em.

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Wednesday, August 25, 2010

Michael's Return to the Main Event?

A high-powered CEO doesn't stay on the canvas for long:

Michael Eisner is not a man with many close friends. But John Angelo is one of the few.

Angelo is co-founder of hedge fund Angelo, Gordon & Co., one of the senior creditors in the complex Tribune Co. bankruptcy. And he's the person who approached Eisner about joining the board of a reconfigured Tribune Co.

Formidable legal obstacles must be overcome before new management can be installed at the troubled media company. But Eisner, formerly Disney chairman and CEO, is in talks to become chairman of the board, possibly with former colleague Jeff Shell, now president of the Comcast Programming Group, as his CEO. ...

It's fine to be a guy with lots and lots of money, but at the end of the playing season, it isn't about the money. Nor even the perks.

It's about exercising power and being in the center of the action, about having that corporate jet at your beck and call. About being an important, mainstream player again.

Long ago, one of the secretaries who arrived with Disney's new management team from Paramount/ Warners said to me:

"These guys can never have enough. They look at the Bass Brothers and their billions, and they are just green with envy ..."

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Studio Rounds

On my studio walk-abouts this week, there's the following:

At Starz-Film Roman, turns out it might not be S-FR much longer.

"We're told the company is close to a deal to sell the studio to a consortium of former Starz executives .... And the Simpsons unit is turning a profit" ...

Meantime, Simpsons employees tell me that their pace is a bit less hectic and the schedules aren't quite as tight. "We've reached an equilibrium that feels better. Maybe we've just figured out how to do things faster" ...

At Walt Disney Animation Studios, the Tangled clips playing on monitors in the entrance hall have gone from unfinaled animation to fully rendered scenes that look sun-washed and lush. (In other words, the visual are very pretty.)

I went through the first and second floors later at night and lots of people were at their desks working, every one of them collecting overtime (or so they said to me.)

At DreamWorks Animation, Megamind animation is in its last few weeks and overtime is abundant.

"We've got a hundred shots left and two weeks to go ..."

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The Mouse Waves 'Bye! to ASIFA

From the New York Times:

A running squabble over a cartoon awards banquet boiled over on Tuesday when Walt Disney Studios said it would withdraw from the group that hands out trophies for animation achievement.

For years Disney has privately groused about the Annie Awards, presented by the Hollywood chapter of the International Animated Film Society. Among Disney’s complaints: that the guild allows anyone to buy a membership (in contrast to most awards-bestowing organizations) and that rival DreamWorks Animation has too much power because it gives all of its employees complimentary membership to the guild ...

All's fair in war and the handing out of little gold statues. (So why doesn't Disney tender its own complimentary memberships? It's got more animation employees.)

Years ago, a writer-producer named Niven Busch told me:

"Back in the thirties, studios expected you to go to its movie premieres and vote for company product and stars at Oscar time. If you didn't, you weren't considered a loyal employee ..."

Good to know nothing has changed very much.

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Twenty-Year Veteran

Earlier this week I had occasion to gab with a supervisor at one of our fine, signator studios. He's had twenty years of employment in the biz, with side trips working in character merchandising.

He and his spouse have two children, one out of college and the other starting. They're a two-wage family with the wife's cash flow secure, so he's fairly relaxed about the future. He's also confident of his abilities, work ethic, and not worried about keeping his job. What he told me reflects some of the comments in Early Morning Q & A ...

There are people around here who are working uncompensated overtime. Some people are worried about hanging on, and project their fears, and feel they have to kick in extra work if they want to get picked up for the next project. People take work home and work for free, polish the apple so they'll get rehired. There are younger people who do whatever they can to have a leg up for the next project. I don't consider them "wrong" for doing it, but I don't take work home. I think everyone needs to take responsibility for what they do and not play the victim.

But I've never been worried about it. I know what my work ethic is, I know how many drawings I need to get out to supply people in my unit. Some supervisors guess but I do the math, figure out how much work has to be done. There are younger people who take work home and do it for free, polish the apple so they'll get rehired. I've never had a hard time getting a job. The company knows what I can do and appreciates the time and effort I put in. Several years ago I volunteered to fill in for a supervisor who was out sick, and worked seen days a week to do my job and other other supe's. I didn't ask for a higher weekly salary, but I got some paid time off after the projects was done, and that was all I needed.

I have to keep working until my younger kid is through school, but I'm not uptight about coming by more work when I need it ...

I encounter artists who get buried under the workload and schedules, then do extra hours without compensation to keep up. Many are as angry about the system in which they feel trapped as they are fearful about it.

Then I meet people who have learned how to focus on work and streamline the process. Deadlines don't bother them very much, because they have figured out how to be more productive without killing themselves and burning out. They don't put in a lot of o.t. These folks are usually less uptight, more philosophical about the whole "get it in by Friday" routine.

They don't complain much. They also don't seem to be particularly intimidated by management.

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Tuesday, August 24, 2010

The state of employment, August 2010

Employment at TAG Union Shops, 2007-

There are 192 more members employed under our jurisdiction at TAG shops than there were in January of this year, the last time we broke down the state of employment.

Breakdown by Employer of Members at Union Shops, August 2010

The numbers in brackets are the number of members employed. A year or so ago, DreamWorks passed Disney to become the largest employer of TAG members. (The Disney numbers are inclusive of all divisions we cover - features, DisneyToons, Disney TV Animation, etc., with members working under a TAG contract as well as others working under IATSE contracts.)

Changes in TAG Employment Patterns, August 2008-August 2010

This increase in employment over the last two years comes in spite of the fact that two substantial employers (Universal and Imagi) are no longer in existence, and by the first part of 2011 ImageMovers Digital will be gone. However, we've gained another potentially large employer (Hasbro), and there are others (such as Bento Box) that may increase to where they go past thirty covered employees and become another listed slice of our increasingly diverse pie.

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Early Morning Questions and Answers

From e-mails and comments:

Why aren't there any job descriptions in the union contract?

No job descriptions exist in the Collective Bargaining Agreement's pages because the studios have turned down our proposals for job definitions when we've presented them.

So then how do people know what they're supposed to do in the job they get hired for? Couldn't a background artist perform the job of an animation timing director?

There's interchangeability between different jobs in the contract, but if the jobs are paid at different rates, the studio has to follow the pay scales for the specific job.

The way different job classifications are defined is through "long-time custom and practice" (what specific services were performed by an animator, layout artist or storyboarder over a period of years.) ...

Regarding the WB grievances: Steve, it's interesting that whenever you mention what's going on at WBA it's all sunshine and Bugs Bunny. ....

I've never referenced any WB grievances. All I've said here is that we have three different grievances now in work.

Didn't say at which studios, and don't plan to. But feel free to come to membership meetings if you want greater specifics. I talk about grievances in some detail there. I'm not keen on talking about them on the internet.

I dug around the internet and couldn't find it: how do I get a report of my individual account plan? How can I be sure my studio is reporting all my hours?

The Motion Picture Industry Pension and Health Plan sends out annual statements about 1) Your reported hours for the previous year, 2) The current monthly annuity for the MPIPHP's Defined Benefit Plan, and 3) and the total amount of money in the Individual Account Plan.

If you haven;t received a statement, you can phone the Plans and ask for one. Or you can call the MPIPHP Pension office at (818) 769-0007 ext. 627 and ask what your Defined Benefit Plan (that's the monthly annuity) currently is, and how much money resides in your Individual Account Plan. (You'll need to provide them with your name and Social Security Number.)

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Monday, August 23, 2010

Piracy Presentation From Paramount Pictures

Today at the West Coast IA offices, staff from Paramount Studio gave a detailed presentation of theft of intellectual property over the internet, specifically theatrical motion pictures. Among the bullet-points: ...

* In the past five years, "peer to peer" exchange of online movies has been supplanted and surpassed by on-line streaming from websites largely owned and operated by organized crime (some of the larges being in Mother Russia.)

* This site, according to Paramount, is owned and operated by the Russian mob. (Certainly professional looking, isn't it?)

* Theatrical features are camcorded the day of their release, and go up on-line almost immediately. Organized crime is now paying for good, (quick) camcorded movies.

* Pirate websites earn $20 to $200 million in profits per year. (Each. And there are thousands of them.) It's one of organized crime's preferred methods of earning money.

* Pirate sites often look slicker and more professional than legitimate sites (i.e. Netflix or Red Box). Most pirate sites infest computers with mal-ware and spy-ware.

* There are billions of visits to pirate movie sites annually, resulting in the loss of thousands of movie jobs. (The independent film industry has withered away to nothing. Sixty fewer theatrical motion pictures were made last year, largely because of internet piracy.) ...

Paramount execs detailed how media companies are working to shut down pirate sites and federal law enforcement agencies are now getting involved.

It was pointed out that suing individual site operators takes years, and really isn't a cost-efficient solution. Online streaming is steadily eroding DVD sales, and even lowering the price point of the little silver disks because

"Low price still can't beat free."

It's gonna be interesting to see how all this shakes out, since nobody thinks the problem is going away.

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The News Cartoons

Tiger Woods may have lost a wife today, but he shouldn't despair. He's helped lift a young and dynamic animation company to fabulous new heights.

Next Media Animation, which launched in September 2009, churns out more than 30 computer-animated dramatizations of news events every day. ... With a staff of 200-plus that is still growing, Next Media Animation, part of the larger conglomerate Next Media Limited, primarily produces clips of local events in Mandarin and Cantonese for the company's Apple Daily newspapers in Hong Kong and Taiwan, as well as for its new online news channel. The animations vary from the funny to the gruesome to the downright boring, but taken together they've been astonishingly successful. In Hong Kong, Next Media's videos average more than 4.1 million hits a day, making it the second most watched news channel in Hong Kong ...

Key to Next Media Animation's success is its speed. In about three hours, says Mike Logan, Next Media's manager of content and business development, its team can go from story idea to finished product. Members of the team work closely with Apple Daily reporters — who gather information for CGI graphics as they report their print stories — in order to work in all the known details. ...

What's fascinating is how many nooks and crannies animation has seeped into. Forget about commercials, television news and sports graphics, or internet humor. Animation now occupies a big part of the creative space of big, live-action movies. Animated characters, cleverly disguised as high-octane stunt performers, now execute the riskier movie stunts in our noisy action epics. And now animation provides employment for the Taiwanese creators of our more sensational news stories.

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Sunday, August 22, 2010


Disney Feature might not have the highest-grossing animated features just now, but there is this:

Disney's "Prep and Landing" was animation's big winner at Saturday's Creative Arts Emmys.

The ABC holiday special was named Outstanding Animated Program and also won three Emmy Awards for Outstanding Individual Achievements in Animation: background key designer William M. George III; art director Andy Harkness; and storyboard artist Joe Mateo. ...

Talking to the folks who worked on P & P, I detected a teensy bit of unhappiness when outsiders would say, "That was a great Pixar special ...".

As one of the people working on it said:

"Pixar didn't do this. It was developed at Disney in Burbank. ..."

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The Late Summertime Derby -- Overseas Edition

Animation is no longer at the top of foreign box office, but nevertheless doing nicely.

Pixar/Disney's "Toy Story 3" in 3D continued to chug along after two-and-a-half months on the overseas circuit, grossing $12 million from 6,925 screens in 49 territories. The title is either No. 4 or No. 5.

Foreign cume stands at $580.6 million, making the animation threequel the fifteenth biggest offshore grosser of all time. Global cume is $984.3 million, qualifying "Toy Story 3" as the industry's seventh most popular title ever. ...

Still pumping after about three months on the foreign theatrical circuit, DreamWorks Animation/Paramount's "Shrek Forever After" in 3D opened in China, and generated an estimated $8.1 million from 923 situations. Weekend overall produced $11 million from 4,663 locations in 58 markets for a foreign gross total so far of $455.5 million. Openings in Greece and Italy are on tap this week. ...

Expected to rank No. 1 in its Poland opening is Universal's "Despicable Me," which generated $5.3 million on the weekend from a total of 1,735 sites in 25 territories. With more than 30 markets yet to play the 3D animation title voiced principally by Steve Carell has accumulated a foreign gross of $65.2 million ...

So the last three widely released animated epics, two created stateside and one with pre-production in California and production in Paris -- have now collected:

Shrek Forever After -- $693,224,000

Toy Story 3 -- $984,327,000

Despicable Me -- $295,933,000

Sit back and wrap your brain around the fact that three animated features from three different companies have made $1,677,846,933 in the last six months. Not bad for a type of movie few execs paid much attention to a generation ago.

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Saturday, August 21, 2010

Education With Animation

Tonight I had occasion to take in The Other Guys, the new Ferrell and Wahlberg comedy. An amusing picture, but the animated end credits had me sit up and pay attention. They made me remember why I urged my congress persons to vote against the TARP bailout two long years ago.

As Cinema Blend puts it:

... The movie’s crime plot is wrapped around the notion of rich people ripping off the little guy and so when the closing credits rolled, instead of simply throwing the names of the cast and crew at you, The Other Guys steps down to explain the real-world economic collapse, in a way people can actually understand, using simple animation. ...

I sold my shares of Goldman Sachs way too soon ....

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Militant Nik

As was pointed out below in "The (not so) Perfect Storm" negotiators from the DGA and other unions will shortly be sitting down with studio management to hammer out new Collective Bargaining Agreements, and much of their focus will be on pension and health benefits.

This is hardly a big surprise given the state of movie and television land, and Directors Guild negotiator Gil Cates writes:

... [W]e are little more than a month away from the kickoff of negotiations season for contracts expiring in 2011. ... Part of our [negotiations] process is to develop the best and most thorough research and forecasts on the state of all aspects of the entertainment business available anywhere in the industry. ... We’ve spent millions of dollars and a great deal of time and effort making sure that we know at least as much as anybody sitting across from us at that negotiations table. ...

While the Guild’s negotiations priorities are still being refined, I think it’s safe to say that ensuring the security of our health and pension plans will definitely be a top priority in our negotiations with the AMPTP. ...

Which prompted the Nikkster to write:

It looks increasingly like the Hollywood guilds are giving up before they even go into this 2010/2011 round of negotiations with the movie studios and TV networks. This message by 4-time Basic Agreement/FLTTA Negotiations Chair Gil Cates to 14,000 Directors Guild members talks about focusing on health and pension plans and doesn't even mention demanding more New Media money from the AMPTP. This, despite the fact that Big Media is alive and well and even flourishing ...

What's also interesting about Cates' statement is that this notorious hater of the Writers Guild cozies up to the new SAG-AFTRA cooperation. So it's clear what's going to happen during this next round of negotiations: SAG-AFTRA make a quick and easy contract full of compromises and few gains. The DGA soon follows. Which leaves the WGA on its own

The one thing you can say about Nikke Finke: When negotiation time comes around, she is as constant as the rising sun. The Writers Guild is manly, strong and principled, and the Directors Guild is wimpish. (And the IATSE? It's little more than a cackling villain, twirling its greasy moustache.)

The Nikkster, you see, is unencumbered by the dual realities of serving a membership that's been hammered by a long recession and so is less pugnacious, and jousting with multi-national conglomerates disinclined to share new revenue streams with Hollywood labor unions.

Added to which, everyone down in the arena (as Nikke sits up in the stands munching buttered popcorn and complaining how weak-kneed the players are) is aware of the current fragility of the pension and health plans.

But it's been this way for years. The Nikkster is always delighted to fight to the last drop of somebody else's blood. She reminds me of political pundits like William Kristol who sit in their New York offices agitating for bigger and more numerous wars, urging the boys and girls in uniform to fight on to greater glory, secure in the knowledge that it won't be them carrying that M-16, wearing sixty pounds of equipment in the heat of a Middle Eastern desert, and getting shot in the face.

Militant Nik!

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End of Summer Derby

Now with marshmallow Add On.

For the first time in fifty-two years, there is no animated feature in America's Top Ten Favorite Movies. (I'm devastated, but what you can you do? ...)

The Top Money-Spinners

1. The Expendables (Lionsgate) Week 2 [3,270 Runs] -- Friday $4.9M (-63%), Estimated Weekend $15M, Estimated Cume $63M

2. Vampires Suck (Fox) NEW [3,233 Runs] -- Friday $4.4M, Estimated Weekend $12M, Estimated Cume $18.2M.

3. Lottery Ticket (Warner Bros) NEW [1,973 Runs] -- Friday $3.8M, Estimated Weekend $11M

4. Eat Pray Love (Sony) Week 2 [3,082 Runs] -- Friday $3.7M (-56%), Estimated Weekend $11.5M, Estimated Cume $43.5M

5. Piranha 3D (Dimension/Weinstein Co) NEW [2,470 Runs] -- Friday $3.6M, Estimated Weekend $10M

6. The Other Guys (Sony) Week 3 [3,472 Runs] -- Friday $3M (-46%), Estimated Weekend $9.6M, Estimated Cume $87.6M

7. The Switch (Miramax) NEW [2,012 Runs] -- Friday $2.7M, Estimated Weekend $8M

8. Nanny McPhee Returns (Working Title/Universal) NEW [2,784 Runs] -- Friday $2.6M, Estimated Weekend $8.5M

9. Inception (Warner Bros) Week 6 [2,401 Runs] -- Friday $2.1M (-36%), Estimated Weekend $7M, Estimated Cume $261.2M

10. Scott Pilgrim vs The World (Universal) Week 2 [2,820 Runs] -- Friday $1.6M (-64%), Estimated Weekend $4.6M, Estimated Cume $20.3M

Despicable Me, now standing at $227,580,000, has fallen to #11, and Toy Story 3 (#16 on our hit parade) will pass the $403 million marker by Sunday night.

Meantime, the immortal Vampires Suck, which has "instant classic" written all over it, stands at #2 as it collects a sterling 3% from Rotten Tomatoes. (I think I'll leave the laundry in the dryer and buzz off to see it. Now ...)

Add On: The Expendables drop 52.6% but stay atop the heap with $16.5 million into Mr. Stallone's weapons' bag. Despicable Me, in the 11th slot, adds $4.3 million. And Toy Story 3, at the tail end of its domestic run, now stands at $403,727,000.

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Harry Browne's Lessons

Back to investment advice.

When I was a swabbie in the U.S. Navy, I came across an author named Harry Browne. He had just published a book entitled "How I Found Freedom In An Unfree World" and I was entranced. I read it cover-to-cover in a San Diego bookstore and have remembered large chunks of it ever since.

Harry, an investment guru, candidate for President (Libertarian Party) and best-selling author, has now moved on to his reward, but the Browne educational plan lingers on. I give you truncated versions of sixteen of his pearls of wisdom below:

Rule #1: Your career provides your wealth.

You most likely will make far more money from your business or profession than from your investments. Only very rarely does someone make a large fortune from investments ...

Rule #2: Don't assume you can replace your wealth.

The fact that you earned what you have doesn't mean that you could earn it again if you lost it. Markets and opportunities change, technology changes, laws change. ... So treat what you have as though you could never earn it again. ...

Rule #3: Recognize the difference between investing and speculating.

When you invest, you accept the return the markets are paying investors in general. When you speculate, you attempt to beat that return. ... There's nothing wrong with speculating — provided you do it with money you can afford to lose ...

Rule #4: No one can predict the future.

Events in the investment markets result from the decisions of millions of different people. Investor advisors have no more ability to predict the future actions of human beings than psychics and fortune-tellers do ...

Rule #5: No one can move you in and out of investments consistently with precise and profitable timing.

You'll hear about many Wall Street wizards, but the investment advisor with the perfect record up to now most likely will lose his touch the moment you start acting on his advice. ...

Rule #6: No trading system will work as well in the future as it did in the past.

You'll come across many trading systems or indicators that seem always to have signaled correctly where your money should have been, but somehow the systems never come through when your money is on the line. ...

Rule #7: Don't use leverage.

When someone goes completely broke, it's almost always because he used borrowed money ...

Rule #8: Don't let anyone make your decisions.

Many people lost their fortunes because they gave someone (a financial advisor or attorney) the authority to make their decisions and handle their money.

Rule #9: Don't ever do anything you don't understand.

Don't undertake any investment, speculation, or investment program that you don't understand. If you do, you may later discover risks you weren't aware of. ...

Rule #10: Don't depend on any one investment, institution, or person for your safety.

Every investment has its time in the sun — and its moment of shame. ... We live in an uncertain world, and surprises are the norm. You shouldn't risk the chance that a single surprise will wipe out a large part of your holdings. ...

Rule #11: Create a bulletproof portfolio for protection.

For the money you need to take care of you for the rest of your life, set up a simple, balanced, diversified portfolio. ...

Rule #12: Speculate only with money you can afford to lose.

If you want to try to beat the market, set up a second — separate — portfolio with which you can speculate to your heart's content. But make sure this portfolio contains no more of your wealth than you can afford to lose. ...

Rule #13: Keep some assets outside the country in which you live.

Don't allow everything you own to be where your government can touch it. By having something outside the reach of your government, you'll be less vulnerable ...

Rule #14: Beware of tax-avoidance schemes.

Tax rates are still low enough in the U.S. that you might gain very little from the risk and effort of constructing elaborate tax shelters. And a great deal of money has been lost by people who hoped to beat the tax system. ...

Rule #15: Enjoy yourself with a budget for pleasure.

Your wealth is of no value if you can't enjoy it. But it's easy to spend too much while the money's flowing in. To enjoy your wealth, establish a budget of money that you can spend yearly without concern ....

Rule #16: Whenever you're in doubt about a course of action, it is always better to err on the side of safety.

If you pass up an opportunity to increase your fortune, another one will be along soon enough. But if you lose your life savings just once, you might never get a chance to replace it ....

Most of Mr. Browne's points of light seem self-evident, so it amazes me how many people (myself included) stray s far from them so much of the time.

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Friday, August 20, 2010

Always the Competition

Pixar and DreamWorks Animation duke it out again:

DreamWorks Animation and rival Pixar animation both have two scientific and technical achievements that are currently being considered for awards by the Academy of Motion Picture Arts and Sciences.

The Academy's Sci-Tech Awards Committee said Friday that 15 methods and devices have been selected for further awards consideration. ...

After all the entries are investigated, the committee will meet in early December to vote on recommendations to the Academy's board of governors, which will make the final awards decisions. ...

And now it's time for the trolls and pixies to come out and dump on their least favorite animation studio. So forest sprites and affiliated hangers-on, over to you!

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Another Day, Another Hybrid (Maybe)

DreamWorks Animation never lacks for development, as The Wrap and Reporter tell us:

The idea for the tentatively-titled project originated at an internal DWA retreat several years ago and "Shrek Forever After" director Mike Mitchell is developing it with the writers, although he isn't attached to direct at this point.

It's possible that the project could become a live-action/animation hybrid ... but nothing has been decided at the moment, as it's still very early in the development process.

Coincidentally, DreamWorks co-founder Steven Spielberg previously explored developing an imaginary friend project, and he also flirted with the idea of remaking the imaginary-rabbit movie "Harvey" with Tom Hanks for 20th Century Fox earlier this year ...

The question here: Will DWA expand into live-action in the foreseeable future? And if so, will you have DreamWorks releasing live action through the Diz Co., and DreamWorks Animation (same founders, different company) releasing live-action/animation through the Viacom subsidiary Paramount?

Inquiring minds yearn to know.

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The (not-so) Perfect Storm

I attended a meeting of IA business agents this morning on this topic. The following article is adapted from the April 2010 issue of the IATSE Organizer newsletter.

No single issue dominates headlines these days more than how best to provide health care for American families. And the reform bills passed by the House and Senate (H.R. 3962 and H.R. 3950 respectively) have only fueled the national debate.

But on one point everyone agrees: rapidly rising health care costs have threatened health insurance plans throughout America, even in the film and television industry’s employer contribution-based system, one of the most benefit-laden of any in the country.

Did you know that the average COBRA cost for a family under our MPIHP* health plan is $16,741 per year? And with costs rising at 9-10 percent year, projections put that figure close to $24,000 in the next five years!

* Motion Picture Industry Health Plan

Statistics from The Centers for Medicare and Medicaid Services provide a clear sense of the economic challenges facing your MPIHP Health Plans:

  • In the last decade annual health insurance premiums for families rose 131 percent
  • Between 1970 and 2009, the share of the U.S. economy (GDP) going to health care rose from 7.2 percent to an estimated 17.6 percent, with total health spending in the United States last year surpassing $2.5 trillion
  • By 2018, health care spending will be over $4.3 trillion ($13,100 per resident) and account for 20.3 percent of GDP

Skyrocketing health care costs are just one part of the problem; residuals from supplemental markets and Post 60’s, which have helped to strengthen MPIHP reserves over the last decade, dropped 12 percent industry-wide in 2009, representing a loss of income to the Health Plan of more than $17 million.

Add in the worst national recession in more than 25 years, which helped to lower employee hours into the Health Plan by more than 8 percent in 2009 due to the rapid drop in film and television production, and you have unprecedented economic attacks on your Health Plan. As Mercer health care consultant Chuck Hartwig observes, “Funding sources for multi-employer plans are defined in collective bargaining agreements. So when we see inflation at higher rates, it’s a big challenge to find ways for funding to keep pace.”

Storm Preparations

Health care experts describe the events above as “the perfect storm,” precipitated by declining DVD revenues, rising health care costs, declining hours into the Plan, and an unstable investment climate. Fortunately, the IATSE has been preparing for this better than any other Union in the entertainment industry.

  • Allocation of excess Health Plan reserve amounts over the last five years have helped to stave off Plan changes, even as other industry Plans have been forced to reduce benefits and charge co-payments. The 2009 IATSE Basic Agreement reveals the in-depth levels of preparations (over the course of the last three Contract cycles) made to counteract this “perfect storm.”
  • Banking an additional $187 million toward your Health Plan by spending down Health Plan reserve levels to the recommended minimums (according to health care consultant professionals) of 6 months in the Actives Plan and 8 months in the Retirees Plan)
  • Increasing employer contributions to the Plan by 35 cents per hour (roughly 1 percent of average wage earnings) per year in each year of the Agreement, resulting in an additional $164 million directed into the Health Plan over the life of the Agreement.
  • Additional 15 cents per hour in the second and third years of the Agreement if reserves fall below 10 months
  • Re-allocation of up to 1 percent of wages or IAP into the Actives Health Plan levels should reserve levels fall below recommended minimums
  • Bargained for Health Plan design changes saving $233 million over the term of the Agreement

On the last point it should be noted that MPIHP Plans remain alone in the film and television industry for having no participant premium co-pays, a remarkable statistic given that your MPIHP Health Plans cover more than 115,000 lives.

For so many of us, the rise in eligibility hours from 300 to 400 (which does not commence until August 2011) remains a large and threatening number; but even after such changes, MPIHP eligibility requirements will still remain the lowest in the industry. MPIHP Actives working a little more than 5 days per month will retain coverage; and the increase in eligibility hours in the 2009 Basic Agreement will impact less than 10 percent of Plan Participants.

Funding the Plans

To truly understand the scope of the health care crisis as it affects your Health and Pension Plans, it’s helpful to diagram the Plans’ funding structure. Plan insiders describe it as a water fountain with “buckets and buckets” piled on top of each other.

In this “dripping bucket” scenario, the top of the fountain (the largest pipe of water) are revenues from supplemental markets and Post 60’s, which account for roughly 60 percent of the overall income coming into the Health and Pension Plans. The first bucket to fill up is the Pension, and the second to fill up is the Retirees health plan bucket. What trickles over after those other buckets are full goes into the Actives health plan.

Under Federal regulations, the minimum levels of the Pension Plan must always be funded first, so in a declining investment environment, when more residual revenues are required to go into the Pension that much less will trickle down to the active health plans.

In the “dripping bucket” diagram, it’s also key to note that the Pension Protection Act of 2006 placed strict limits on single and multi-employer pension plans across the nation, with private sector employers having to meet federally mandated pension funding levels of 94 percent in 2009. That means that already decreasing residuals income must be redirected from the Health Plan to meet strict levels required by the Pension Protection Act.

By 2012, the combination of rising healthcare costs and the need to fund the pension will produce a deficit in your MPIHP Health Plan of more than $580 million. In fact, the economics that the IATSE has had to reckon in making preparations to protect your Health Plan for just a single Contract cycle (new employer contributions of roughly $164 million, and an additional $35 million when additional 15 cents ($.15) per hour is triggered, spending down reserves in excess of $187 million, and negotiated Health Plan design changes of more than $233 million) reveal a staggering figure of nearly $600 million just to keep pace with the “perfect storm” described above.

Perception vs. Reality

One question many Plan members have voiced is: How can our MPIHP Health Plans be under such intense economic duress when Hollywood-made films like Avatar are breaking global records and 2009’s overall domestic box office gross was $10.594 billion? How could a banner year for Hollywood studios result in lowered employer contributions into both the Health and Pensions Plans of 73 million total hours, six million hours less than in 2007?

To understand this, you need to look at the whole picture. The primary source of income flowing into our MPIHP Health Plans comes from supplemental markets, i.e.. DVD sales, foreign markets and sales into network television, etc., not from box office revenues.

A New York Times article from January about the proposed sale of MGM highlighted a report by Barclays Capital, which noted that, “even studios much healthier than MGM, bitten by falling DVD revenue and a 30 percent decline in operating income from 2007 to 2009, had experienced a sharp reduction in their relative importance to the media companies that own them.” The article went on to note: “Looking at Warner Bros, (a unit of Time Warner), Paramount (Viacom), Disney Studios (the Walt Disney Company) and 20th Century Fox (the News Corporation), the Barclays report reckoned that such studios, on average, accounted for only about 10 percent of the “enterprise value” of their parents.” “While we enjoy thinking about the film business, the reality is that film doesn’t matter nearly as much to the stocks of media conglomerates as it previously had,” the Barclays report stated.

While the IATSE has gone the extra mile in protecting our MPIHP Health Plan (through preparations noted above like spending down reserves, and increasing employer contributions at the bargaining table) the storm is just too intense to weather by such methods alone. Mercer’s Chuck Hartwig says multi-employer plans like MPIHP are working extra hard to ensure Plan dollars are spent as efficiently as possible. That includes joining forces with the other entertainment industry plans to find the lowest cost/highest quality prescription drug program in the market, and offering disease management programs to help participants with high-cost conditions.

So what can you, as a Plan member, do to help weather this inflationary storm?

  • Cooperate with our Guild’s organizers to help them help us find the extra days of work to get us all qualified for eligibility, by getting contracts with non-Guild employers. Contact Steve Kaplan at (818) 845-7500 ext. 112 or skaplan@animationguild.org.
  • Stay within network when choosing services and utilize the MEDCO prescription drug plan whenever possible. Previously contracted rates reduce the overall costs of the Plan and ultimately reduce any out-of-pocket costs for Plan Members.
  • If available, take advantage of the medical services provided by the Motion Picture & Television Fund clinics and physicians who typically cover 100 percent of costs, to better help reduce overall Plan rates.
  • The passage of the Health Care Reform legislation has not ended the national health care debate. Get involved and urge your representatives not to compromise when it comes to important issues impacting your family’s future. These include not taxing so-called “Cadillac” insurance plans and mandating that all employers pay their fair share.
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Thursday, August 19, 2010

Working for Free. Again.

David Cohen -- behind a subscription wall at variety.com -- tells of another visual effects house that doesn't pay its employees.

The latest bad news from the vfx biz comes from Montreal's Fake Studio, part of the Camera e-Motion Group. A handful of artists who worked for Fake on the 3D vfx for Dimension's "Piranha 3D" have yet to receive payments due in April. Their plight has inspired a great deal of anger in vfx circles, where hearing "unpaid artists" and "Montreal" opens the old wound of Meteor Studios and the problems artists had getting paid for New Line's "Journey to the Center of the Earth."

One of the unpaid artists, Manny Wong, told Variety that with the Meteor incident in mind, he negotiated a payment-in-advance deal, but upon arrival in Montreal, he liked the atmosphere at Fake enough to forego advance payment. He says the producer was "very upfront" with him about the pic's financial difficulties through two crises that threatened to shut down the picture. Then Fake management said it hadn't been paid by the client and couldn't pay the 3D team anymore from its own pockets. Months later, payment is still due.

Last week Dave Rand, a veteran of Meteor who has become something of a watchdog for abuse of vfx artists, posted about the Fake and its unpaid artists on his Facebook page. Marc Cote, an owner of Fake, responded with a note admitting the company is in arrears and saying it is "making arrangements with all of the creditors … to reimburse them as quickly as operations permit." He continued: "Short of shutting down the company we cannot reimburse everybody's debt in one shot. … We are 100% committed to reimbursing this debt." ...

I've encountered tales like this for decades, and I always say the same thing: Professionals should deal with employers professionally. If there are no wages, there should be no work.

It's a simple concept, but often a hard one to execute in real life. Management exerts pressure to be "a team player," fellow workers fall in line, and pretty soon most or all of the non-paid staff find itself "pitching in" to save the project. The difficulty is, people need cash flows to survive, and if the non-payment routine goes on for long, individuals find themselves gnawing shoe leather.

Once again I will point to TAG member Glenn Vilppu. You might remember Mr. Vilppu from a previous post or three. He's the Warner Bros. layout artist who refused to work for free.

On top of being a talented studio artist, Glenn is also a gifted art teacher, and a few years back found himself getting stiffed by an art school for which he worked. The owner, a lad with a silver tongue, had talked most of the artistic staff into working for free, giving them one sob story after another about why he "just couldn't pay them that week."

Most everybody went along, but not Glenn. He told the owner of the school that he was sorry about the problems the guy was having, but if he, Glenn Vilppu wasn't paid by cashiers check the moment he walked into his classroom, he wasn't coming back to teach.

The owner moaned, begged, pleaded. Glenn didn't budge. And since Mr. Vilppu was the star teacher in the school's glossy brochure, he got a check placed in his hand each time he entered the premises.

The other teachers? They went on getting no money. Sometimes it pays to be a hard-nosed professional.

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Aspiring Artists

The L.A. Times gifts us with this upbeat saga:

For the last two years, [Aya Yokura] has spent up to 100 hours a week at her workstation — a low-paying, labor-intensive job that helps bring Japan's famous style of animated cartoons to life. Although the 26-year-old earns only about $10,000 a year and lives with her mom to make ends meet, she and a few thousand Japanese artists like her fill a crucial role in the technical process of creating this visual entertainment form, known as anime.

But even as anime's popularity grows worldwide, the Japanese artists who do much of the work are finding their jobs at risk.

"I left a Tokyo Disneyland job, which had benefits and a higher pay, to pursue this dream" of being an anime artist, said Yokura, who works on the popular series "Naruto" and "Bleach" for the animation production studio Pierrot Co.

The problems plaguing the industry are numerous. Seeking lower costs, production companies for decades have been outsourcing the work to animation companies in South Korea, India, Vietnam and elsewhere, where scores of trade schools have cropped up and artists can be hired more readily. ...

Sound familiar?

But dreams die hard. Yesterday a woman called me from Atlanta. She wanted to know about getting into the hand-drawn animation business in Los Angeles. She had her heart set on it. I told her:

"It's tight out here, there's lots of competition for just a few jobs and those we've got are taken by veterans with lots of production experience. You'd be really smart to stay where you are and not come."

But she's probably coming.

It's hard to dissuade people from their ambitions and aspirations. If you want to be a cartoonist, or writer, or tightrope walker, who am I to say the field is too full and the competition too stiff? There's that one in a thousand chance that you're the genius with the natural gift and work ethic that will knock everybody's socks off and you will be wonderfully successful.

Jaded as I am, I know there are times when following your passion is the best road to travel. Added to which, job opportunities rise and fall, and it's tough to predict whether a segment of any particular market will be roaring or foundering when you're ready to jump into it. (Could anybody have predicted the 'toon boom of the nineties in, say, 1985? That in 2010, animation would be a major driver in full-length movies? Could my predecessor in this job have forecast that the 700-member Motiin Picture Screen Cartoonists over which he presided would morph into the 2900-member Animation Guild? Doubt it.)

The future is always unknowable. Even though it's a reasonably safe bet that hand-drawn animation will not be regaining the high-ground it held in 1994, and that a chunk of lower-tier animation work will be outsourced to low-cost providers, the market is ever-changing, and it's not insane for a twenty-something to chase after her dream job. (At that age she has the time and the opportunity, so why the hell not? My only advice would be to pursue your heart's desire in an area of art that is robust rather than fading.)

If you don't grab at that brass ring when it floats by, the chance to yank it free might never come again. No matter how long the chances.

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Wednesday, August 18, 2010

Boo U

Another day, another feature.

[Seth Rogen] has been cast to voice a lead character in the studio's "Boo U." The comic story centers on a ghost who must return to ghost school to learn how to be a better spook.

"Igor" director Tony Leondis is directing the 3D project, which Gil Netter and Courtney Pledger are executive producing. ...

I see a lot of development going on at DWA's Glendale campus, but Boo U hasn't been on my radar, either because I've been in a trance or because development is going on at PDI in Northern California.

(Or maybe if I lower the dosage of some of my meds, more projects will swim into focus ....)

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Target Date Funds

A few weeks back, The Wall Street Journal examined different Target Date Funds:

... Fees are the single biggest factor in predicting the performance of target-date funds, and portfolios stuffed with funds that passively track indexes tend to outperform those holding funds run by money managers. ...

Target-date funds are designed for investors who hope to retire around a certain date—say, 2025—and don't want to fuss with changing their allocations of stocks, bonds and cash by themselves. Instead, the fund becomes more conservative as the retirement date nears ...

Only seven of the 31 fund families Morningstar included in its analysis managed to beat the benchmark over the three years ended June 30. ... Five of the six top performers—including Vanguard, Wells Fargo and JPMorgan's SmartRetirement funds—were helped by below-average fees ...

I bring the above up in a blog post because I am doing 401(k) Enrollment Meetings this week and next, plus I think it's really, really important to focus on building a nest egg.

The trouble is, many participants in 401(k) Plans don't know much about investing and don't want to know. (Studying asset allocation charts and reading about investment strategies is almost as exciting as watching paint dry.) That being the case, Target Date Funds are the solution that a lot of professionals choose, since who the hell knows what the best selection of stand-alone mutual funds are, and who has the time to read thirty research papers to find out anyway?

For some years, the Animation Guild 401(k) Plan suffered along with sub-par target date retirement funds. Happily, a couple of years back we were able to secure Vanguard Target Retirement Funds for the Plan's investment lineup. These babies are a combination of different Vanguard Index Funds and generally out-perform managed funds over time. They have the added advantage of being inexpensive (less than one fifth of one percent in fees) while providing "one stop shopping."

(The Journal's article misstates the costs of the Vanguard funds. It's .18%, not .70%.)

I will be holding 401(k) Enrollment Meetings next week, so if you work at one of the fine studios listed below and would like to join TAG's investment club, fall on by the conference room where I'm holding forth and we'll get you started on squirreling money away for your sunset years.

TAG 401(k) Enrollment Meetings

Starz/ Film Roman -- Tuesday, Aug. 24, 10 a.m. "Glass" conf. rm.

Sony Pictures Animation -- Wed. Aug 25, 10 a.m., rm 2000

Disney Toons Sonora -- Fri., Aug 27, 10 a.m., rm 2025

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Tuesday, August 17, 2010

Fox Domination

This seems to happen on a weekly basis:

Last night FOX aired encores of THE SIMPSONS (1.8/6 among Adults 18-49), THE CLEVELAND SHOW (1.8/6) and FAMILY GUY at 9p (2.3/6) and 9:30p (2.3/6), and won the night among Adults 18-34 and Teens ...

What I want to know is, why can't any other teevee animation producers replicate the kind of successes Fox Animation and Gracie Films achieve year in and year out?

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A Wage Story

Thinking about the wage piece below and reading about wages at VFX Soldier triggers a story about a TAG member's salary that occurred at Turner Feature Animation back when we all were very young ....

So one bright Spring day, an animator calls me from TFA in Glendale, wanting to know what other animators in his department are making.

It so happens that I have a fat printout of all the wages of TAG members, generously donated to the Guild by the Motion Picture Industry Health and Pension Plan. Quick as a wink, I pull it out and rattle off the salaries of the various animators working at Turner Feature on "Cats Don't Dance.".

And whattaya know? The animator I'm talking to on the phone turns out to be the lowest paid. After a long pause, the guy says: "They told me that nobody was making more than I was."

"Hmmm," I rejoin. "Turns out they're lying."

Another pause. "I think I'm going back and talk to them again."

So he does. And the next day, the animator calls back and says: "I told them I found out I was the lowest paid person in the department. They got mad and asked where I'd heard that. I told them from you."

My heart sings. (Or maybe I'm just getting a sudden case of indigestion.} "Great," I mutter. "Thanks for bringing me in to this."

"No problem. Then they got even madder, yelling that you shouldn't have told me."

"No good deed goes unpunished. But tell me something. Were they embarrassed at all? That you'd caught them lying?"

"No," the animator answers.

And therein lies the tale. The job of studio management is to keep costs down, so they don't consider it lying when they say things like, "Nobody's getting laid off" ... "We're not changing the schedule and there's no budget for overtime" ... or ... "You're making as much as anybody else." even though all those statements are demonstrably false.

Because in Studioland, they aren't lies. They are simply good business practices.

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Wages in the VFX Industry

Lately, much ado has been made of the wage structure of the visual effects world. I've been quite active on a forum thread that was brought to my attention at CG Talk and the discussion lately as been focused on the Guild's wage minimums that are written into our contract. A few loud voices posted about how the wage minimums were "crushing meritocracy" and that the Guild, through its contract, "gives more through bullying tactics".

The venerable and ever-eloquent VFX Soldier crafted a post in his blog that spoke to the current truths to wages in the vfx industry, as well as providing a link to a Google spreadsheet listing over 2,500 job titles and salaries from "vfx, animation and game facilities".

What really was a shock was the vehement argument that was posed against wage minimums that we have written into the contract. Minimum wage rules have been in existence since this Labor Organizer has. Its been my understanding that wage minimums are set to protect the worker against management abuse and help provide a bare minimum compensation for work rendered. Our minimums are floors, intended to ensure that

Hulett: Wage floors and decent pay have been what Hollywood labor unions have been about since the 1930s.

For those who don't know Tinsel Town's history, until the advent of sound there were minimal protections for moviedom's labor. No overtime rules, no wage minimums, no meal breaks. As one Hollywood ancient remembered to the L.A. Times some years ago:

"You came in at 8 and worked until you fell down."

In the Spring of 1933, the studios cut salaries 50% across the board. Unsurprisingly, a slew of entertainment unions and guilds sprang up soon thereafter. Also unsurprisingly, wage minimums were part of their agenda.

Seventy-seven years later, not a hell of a lot has changed. A month back, the Hollywood Teamsters union came close to going on strike over a wage boost of 2%. (They wanted 3%, but ultimately settled for a percent less.) Studios have reined in oversacle deals, cut staff, instituted layoffs. Today at the animation studio of a large entertainment conglomerate, a lead pulled me into his room and said: "People have been uncompensated overtime around here for the last four months." I've told them to stop doing it, but it goes on ..."

Here's the dirty little secret of the movie workplace: It always goes on. Managers pressure employees not to share wage information (a protected right). Production supervisors lean on staffers to "help them out" and work for free. Producers tell artists "there's no money in the budget for overtime."

So is it any wonder that wage minimums are a big part of what Hollywood labor unions? And is it a surprise that wages and overtime pay are issues in the visual effects industry?

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Monday, August 16, 2010

August Studio Roundabout

Monday was a two-studio day: Disney Television Animation on the Disney lot in the morning, and DreamWorks Animation in sun-kissed Glendale through the middle of the afternoon ....

The Phineas and Ferb crew in Disney's Frank Wells building is busy with the new season of the Mouse's biggest hit show. As one of the staffers said:

"The execs let Marsh and Povenmire [show creators] do a lot more than producers are usually allowed to do on Disney TVA shows. It's not too often the lead guys are allowed to write songs and do character voices around here, but when you make a successful series, you get leeway. Hopefully management won't top out the number of shows anytime soon, and we'll go on the way SpongeBob Square Pants has gone. Be great to do years of half-hour episodes."

Elsewhere on the floor, Fish Hooks continues in work as it nears its Fall premiere*. I was told that Disney TVA moves lock,stock and barrel to Glendale when the building next door to the fabled Sonora Building becomes available sometime next year, but everybody is vague about the month and the day that will occur.

Over at DreamWorks Animation, Katzenberg was roaming the studio having meetings, and one of the development artists in the Lakeside Building told me:

"They had a screening of Megamind at an outside theater last week, and everybody was happy with audience reactions and results. There were notes and the crew will keep tweaking things, but the screening went well."

A couple of sequences of The Croods are now in layout, and some of the story people informed me the picture is shaping up nicely.

I had a discussion with a storyboard veteran about how boarding has changed through the years, how story reels now require more poses than in earlier times (a result of digital boarding and the demands for faster pacing.) Some story crews at DWA are now putting up just the main story points of their sequences first, then showing them to the directors to make sure everybody is on board with the overall flow of story, and then putting in more detail.

I'm told this approach helps speed things along and reduces heartburn.

* There are a few other items being developed at DTVA/ Frank Wells, but since they haven't seen the light of studio press releases, I will maintain a discreet silence.

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China and Animation

The Middle Kingdom lusts after Japan's slot in the animation universe.

When it comes to animation, China wants to be the next Japan.

Long envious of its Asian neighbor’s success with anime, China is nurturing homegrown cartoonists and animators and encouraging them to produce films of their own. With the blessing of the country’s Ministry of Culture, provinces and municipalities are staging contests, festivals and conferences, all aimed at getting homegrown talent more exposure -- and some badly needed attention on the international stage.

The holy grail is theatrical, TV and especially home entertainment distribution contracts in the United States that played a key role in helping anime break out of its native Japan and become a true international phenomenon in the early 2000s. ...

Of course, to become a worldwide phee-nom, one needs infrastructure (not a problem), a flexible, high-energy talent pool (also probably not a major deal), and product that will sell like gangbusters around the world. (We'll see how that works out.)

There's no question that China has a monster internal market to consume its own animated output, but how well it does as A) an international animation sub-contractor, and B) an international player producing home-grown theatrical and television cartoons that sell like hotcakes in Dubai, Denver, Denmark and St. Petersberg remains to be seen.

American features and television shows have been globally dominant since the 1920s. Much of the world has less than warm and fuzzy feelings about the United States, but most of it buys into American culture, otherwise Sly Stallone -- now at retirement age -- wouldn't be topping the international box office. For China to become a dominant player, it will need to sell its national sensiblity as well or better than the United States (with its cultural salad bowl) has done over the past century.

And that's a tall order. Even Japanese anime, as successful as it's been, is still pretty much a niche product in the world marketplace.

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Sunday, August 15, 2010

Jeff Varab

Mr. Varab, a tad older than when I knew him at Disney ...

Cruising the highways and biways of the worldwide web, I plowed across this small journalistic piece.

Jeffrey Varab is an animator and director who started at Disney, did years with Don Bluth, used to work for Disney Feature Animation Florida, left there and worked on films such as “Eight Crazy Nights.” ... He set up an outfit, with backers, called Genesis, which animated a movie about a WWII vintage Willys Jeep named “Tugger,” “The Jeep 4 x 4 Who Wanted to Fly.” ....

Varab was arrested this week, charged wtih fraud in Osceola County. ...

Jeff came to Disney in the seventies, a young guy with stylish long hair, tight jeans, and a well-trimmed beard. (Mouse House artists of that time could tell you stories, lots of stories.)

After a few years, Jeff left the studio abruptly, moving on, leaving his Porsche in the Disney parking lot. I ran into him a few times after that. He told me how he was directing a feature about Vikings in northern Europe, then working for Disney again. He was always colorful and a little mysterious, a young man in a hurry.

But not so young anymore. And (apparently) no longer quite so footloose and fancy free. At least now I know his location, and what he's about these days.

Good luck to you, Jeff. You've had an amazing and interesting run up until now. We'll see where it goes from here.

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The Foreign Horse Races of August

Animation continues to figure prominently in the moving picture palaces beyond the seas.

The weekend's No. 2 title, "Toy Story 3," wound up two months on the foreign theatrical circuit with a cume of $539.3 million, making the Pixar/Disney 3D title the distributor's biggest-grossing animation release of all time overseas, surpassing 2003's "Finding Nemo" by $11.1 million.

A muscular Thailand debut propelled "Toy Story 3" to a $22.7 million overall from 7,773 venues in 50 markets. Top market is Japan where the threequel captured the No. 1 spot for the sixth consecutive round ...

A No. 1 opening in Venezuela (an estimated $550,000 at 65 spots) plus first-place holdovers in Brazil and Mexico propelled "Despicable Me" to a $7.5 million weekend at 1,725 venues in a total of 25 territories. Foreign cume for Universal's family-oriented 3D animation voiced principally by Steve Carell stands at $56.2 million. A Poland bow is up for this week ....

DreamWorks Animation's "Shrek Forever After" in 3D is still playing internationally via Paramount, grossing $6 million on the weekend from 4,460 venues in 57 territories, and pushing its foreign gross total to $440.5 million. A China opening this week should boost the animation franchise's fourth installment's cume nicely. ...

For the number crunchers among us, the ogre has now collected $677,730,000 with 65% of the take coming from foreign box office; Toy Story 3 is just shy of a billion with $940,067,000. ($57.4% of the number comes from abroad.)

Despicable Me meanwhile, has cvollected a mere 20% of its worldwide total of $278.2 million from countries outside the U.S. and Canada.

Still in all, the three animated features have chalked up almost $1,9 billion over the past few months. Their collective production costs? $434 million*.

* Listed budgets: "TS3" -- $200 million; "Shrek 4" -- $165 million. "Despicable Me" -- $69 million.

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