The WGA’s new film and TV contract was approved tonight in Los Angeles by the board of the WGA West and in New York by the council of the WGA East. It now goes to the guilds’ members for final ratification, which is all but guaranteed.
There was lots of backslapping at tonight’s meetings and praise for the writers’ negotiating committee – which worked for free – and for the guilds’ chief negotiator, WGA West executive director David Young.
A deal on the new pact, which averted a threatened strike, was reached early Tuesday morning after weeks of on-again-off-again negotiations, and about an hour after the midnight expiration of the old contract.
The agreement with management’s AMPTP calls for across the board increases in guild minimums and tens of millions of dollars in additional employer contributions to the WGA’s ailing health plan, which guild leaders say “should ensure its solvency for years to come.”
One of the guilds’ major goals going into the talks was to hammer out a new pay formula for short-order TV shows – seasons of 10-13 episodes that have come to dominate the industry – that pay for only half of a traditional full season even though they usually take their writers off the market for a full year. To address this problem, the guilds won new provisions further expanding protections known as options and exclusivity, and new contract language that established an episodic fee for each 2.4 weeks of work. Any writing beyond that span will now require additional payments for hundreds of writer-producers, whose pay has been in decline in recent years.
The new contract also calls for a 15% increase in Pay TV residuals; some $15 million in increases in high-budget SVOD residuals; job protection for parental leave; and, for the first time ever, residuals for comedy-variety writers working on Pay TV shows.
In a statement to their members issued shortly after the agreement was reached, guild leaders said: “Did we get everything we wanted? No. Everything we deserve? Certainly not. But because we had the near-unanimous backing of you and your fellow writers, we were able to achieve a deal that will net this guild’s members $130 million more, over the life of the contract, than the pattern we were expected to accept.”
An assistant professor at USC who challenged the prevailing theory that state film tax incentives are good for their local economies has come under personal and professional attack by the MPAA, the industry’s leading booster of state tax incentives.
Last month, Michael Thom published a study titled “Lights, Camera and No Action” that found that state incentives programs aimed at luring productions away from California and New York had “little to no sustained impact on employment or wage growth” in their states. His study found that since 1997, the film and TV industry has received more than $10 billion in state tax subsidies.
“The incentives are a bad investment,” Thom wrote on USC’s website. “States pour millions of tax dollars into a program that offers little return. On average, the only benefits were short-term wage gains, mostly to people who already work in the industry. Job growth was almost non-existent. Market share and industry output didn’t budge.”
The MPAA, however, has accused Thom of “academic malpractice,” stating that his study is so flawed that it not only tarnishes his own reputation but USC’s as well.
“It is troubling and without excuse that such a false and misleading study, without statistical and intellectual foundation, would be recklessly promoted by an otherwise respected educational institution such as USC,” Vans Stevenson, the MPAA’s SVP State Government Affairs, said in a statement. “It severely tarnishes the reputation of the university as well as the academic credentials of the author. This is academic malpractice, designed to make a provocative statement rather than offer sound policy analysis.”
According to the MPAA, “States and countries with strong production incentives report positive impacts on growth and employment, and studies have measured this impact.” One of the studies it cites was performed by the HR&A consulting firm “to support key policy goals on behalf of the Motion Picture Association of America.”
The MPAA pointedly disparaged USC, as well. “Last month, the University of Southern California promoted a paper … which reached the odd and attention-grabbing conclusion that film production incentive programs have little to no impact on film industry employment and output,” wrote Julia Jenks, the trade group’s VP Worldwide Research. “This runs counter to the landscape of studies that have measured the direct employment impact of key state production incentive programs using Bureau of Labor Statistics data. Unfortunately, the new Thom paper has fundamental scientific flaws that undermine the paper’s credibility and render its conclusions completely unfounded.”
Thom’s study evaluated the impact of an array of tax incentives employed by more than 40 states to entice film and television TV out of California and New York on labor and economic conditions from 1998 through 2013. “Results suggest that sales and lodging tax waivers had no effect on any of four different economic indicators,” his report found. “Transferable tax credits had a small, sustained effect on motion picture employment levels but no effect on wages. Refundable tax credits had no employment effect and only a temporary wage effect. Neither credit affected gross state product or motion picture industry concentration. Incentive spending also had no influence.”
Wrote Jenks: “Overall, the Thom analysis reflects a lack of understanding of motion picture production and how incentives relate to those productions. The claims that transferable and refundable tax credits will have different impacts on employment, wages, and other metrics are not clearly explained in the Thom paper and are implausible based on how transferable film credits actually work, undermining the conclusions and interpretations of the results.”
According to the MPAA, Thom’s study “looks at the wrong jobs data” to reach its conclusions. “The paper’s baseline assumptions misunderstand how transferable film credits actually work,” the MPAA said. “The analysis ignores how the size of a state’s film production incentive program could impact the amount of production as well as correlations between program size and its potential impact on employment, wages, and other outcomes. The data also does not account for changes in size in programs over time or differences in the same type of incentives offered in multiple states. Treating all state film production incentive programs equivalently and ignoring the variability of spending by programs (from state to state and from year to year) falsely equates programs that are very different in terms of size and potential impact.”
The MPAA says that “out of the 1.9 million U.S. jobs supported by the film and television industry, direct industry jobs generated $50 billion in wages and nearly 305,000 jobs in core businesses related to producing motion pictures and television shows. These are high quality jobs, with a traditionally unionized workforce and an average salary of $92,000, 79% higher than the average salary nationwide. The amount of TV shows produced has been growing, and films produced remains high.”
Jenks wrote that although Thom described his analysis as focusing on motion picture production, “The Bureau of Economic Analysis data being used to study the effect of film production incentives is aggregated data that includes movie theater and sound recording industry jobs and wages. A ticket taker at the local cinema or an engineer at a recording studio should not be affected by film production incentives. Their inclusion in the study adds noise that dilutes and biases the results of the model.”
“To adapt the proverbial apples-and-oranges analogy, in this case you are looking for some oranges buried within a large cart of apples” she wrote, “Movie theater jobs account for an average of 59% of all motion picture industry-related jobs, as categorized by the Bureau of Labor Statistics, which is the source for granular employment data, outside California and New York. This percentage rises as high as 80 or 90% in certain states. Additionally, the measured sound recording industry jobs declined 45% nationally during the period covered by the research. Moreover, the dataset does not include freelance workers that are prevalent in motion picture production.”
Jenks also said that Thom’s analysis “ignores how the size of a state’s film production incentive program could impact the amount of production as well as correlations between program size and its potential impact on employment, wages, and other outcomes. The data also does not account for changes in size in programs over time or differences in the same type of incentives offered in multiple states. Treating all state film production incentive programs equivalently and ignoring the variability of spending by programs (from state to state and from year to year) falsely equates programs that are very different in terms of size and potential impact. States with low or no real spending in their production incentive programs may be obscuring the effects of strong, well-funded programs in the overall model.”
To illustrate the “flaws” in the design of Thom’s study, Jenks offered a music school analogy. “Let’s say you wanted to know whether school music programs increase the number of children who play music,” she wrote. “So you took all schools nationally and categorized them based on a technical category, i.e. whether they had a public school or private school music program each year – but ignored whether ‘program’ simply meant there was a piano in the school or whether the school was like Juilliard, the pinnacle of musical instruction. And then you measured the change in the number of students who participate in any extracurricular activities each year across the public/private categories. It should be self-evident that any conclusions drawn from this research would be unreliable.”
Jenks also criticized Thom’s study for not mentioning the historical role that incentives in other countries, such as Canada and the United Kingdom, have played in fueling state efforts to keep production and jobs in the U.S. “Incentive programs outside the US are likely to spur program creation and impact spending levels by states that wish to attract productions, and the impact of international competition should not be ignored,” she wrote.
Los Angeles’ share of overall TV pilot production in the U.S. and Canada dropped to the lowest level on record in the last year, underscoring the ongoing challenges the region faces to keep television crews in state.
L.A. remains the most popular destination to film TV pilots, but its piece of the pie continues to shrink as Vancouver, Atlanta and New York continue to lure TV projects with attractive tax breaks, according to an annual survey from FilmL.A. Inc., the nonprofit group that handles film permits for the city and county.
In the yearlong pilot season that ended May 31, 79 of 201 pilots (39%) that filmed in the U.S. and Canada were shot in the Los Angeles region, the survey found.
It’s the first time that L.A.’s portion of total pilot TV production has fallen below 40% and marks a stark contrast from a decade ago, when the region had an 82% share of all TV pilots produced.
“L.A. is still losing too many good jobs, and too much revenue, to other states,” Mayor Eric Garcetti said in a statement. “We must continue investing in the future middle class of this city, and commit ourselves to doing all we can to ensure that production stays where it belongs — right here, in the creative capital of the world.”
Top competitors for pilot production last season were New York (28 pilots), Vancouver (25), Atlanta (15) and Toronto (12), the report said.
Traditional network TV pilots are typically made from January to April, with few turning into full-fledged series.
Overall, pilot production in L.A. (25 dramas and 54 comedies) declined 13% from a year earlier, when 91 pilot projects filmed locally. The drop was mainly the result of a decline in local comedy pilots.
Most comedy pilots still shoot in L.A., but the region’s share dropped in that category to 69%, down from 77% a year earlier. The slip marks the first time since tracking began that L.A.’s share of comedy pilots fell below 70%.
L.A. captured just 20% of all drama pilots, a slight improvement over its 19% share a year earlier but well below the 63% share the region commanded during the peak 2006-07 season.
Nonetheless, film industry officials say state film tax credits are playing an important role in keeping many dramas in California. Half of the state’s 64 drama series are supported by state film tax credits.
“While we were disappointed to see a decline in local comedy pilot production, recent growth in drama pilot and series production is encouraging from the standpoint of overall area jobs and economic benefit,” FilmL.A. President Paul Audley said.
In a bright spot for L.A., digital production continues to rise. Amazon, Netflix, Hulu and other digital networks produced 38 pilots in the L.A. region last season, up from 26 pilots in the previous season.
And L.A.’s share of pilot production from digital networks reached 19% last season, up from less than 1% in the 2011-12 cycle, according to the report.
FilmL.A. also noted that straight-to-series orders, in which the TV pilot process is bypassed, is on the rise and contributing to a decline in numbers. Fifty-seven network, cable and digital shows were ordered straight-to-series last season, up from the 37 shows ordered in the previous season.
Pilots are closely monitored because of their economic benefits.
The average one-hour pilot employs about 150 people and has a budget of $2 million for comedies and to $6 million to $9 million for dramas.
FilmL.A. estimates $296 million was spent in L.A. during the most recent pilot season, slightly down from $298 million the prior season. Last season, L.A. represented just 29% of the total amount spent by pilot producers in allocations, the first time that spending has fallen below 30%.
Members of Writers Guild of America West have turned down a proposal that would have mandated holding elections in two of every three years rather than the current practice of annual elections.
In results announced Tuesday, members voted down an amendment that would have changed the WGA West’s annual election to a contest held on a cycle of two of every three years starting in 2021.
The proposal would have also lengthened the current terms for officers and board members to three years from the current two years; allowed officers to remain in office for six years, rather than the current four years; and allowed board members to remain in office for nine years rather than the current eight years.
The vote fell short of the two-thirds approval needed with 702 in favor to 368 opposed. The goal was to synch up the WGA’s negotiations cycle with the elections cycle.
WGA members approved two other amendments. One will reduce the number of board candidates that the WGA West’s nominating committee must nominate each election from the current 16 to as few as 12 for the eight open board seats. The board told members in the notice sent to them that the amendment was designed to deal with the difficulty experienced by recent nominating committees in recruiting enough nominees to run.
The other amendment reduces the number of signatures required to run by petition for an officer position to 25 from the current 50 and to 15 signatures from the current 25 to run for the board.
WGA West President Howard Rodman said in the notice to members that the changes were aimed at making the election process “more compatible with the actual work of union governance.”
The changes do not impact the WGA East, which has 4,000 members and is based in New York. The WGA West and WGA East jointly negotiate their master contract with producers, a three-year deal which will expire on May 1, 2017.
The Writers Guild of America has reached a tentative agreement with CBS News for a three-year successor deal to its current three-year contract.
The deal covers about 325 news writers, producers, editors, graphic artists, production assistants and promotion writers working in the network’s TV and radio news operations in New York, Los Angeles, Chicago and Washington, D.C. If ratified by members working under the current pact, the new agreement will replace that deal, which had been due to expire Tuesday.
Negotiations were handled by representatives from the WGA East, which has about 200 members covered, and the WGA West. No details of the terms of the tentative agreement were disclosed.
The WGA also said in 2013 that it had achieved gains in contract producer minimum salaries and acting editor fees. “There are no concessions on the part of the union in the agreement,” the guild added.