WGA’s New Contract Provides Major Boost To Keep Health Plan Solvent; Other Key Elements Of Pact Revealed!
The WGA’s ailing health plan will get a $65.85 million infusion of employer contributions over the next three years to keep it solvent once the guild’s new contract is ratified by the members. Combined with $21 million in cost savings, the additional revenue and savings will provide $86.85 million to keep the health plan solvent, which was one of the WGA’s key goals going into the recent contract negotiations.
A WGA summary offers other new details of the contract, which was approved unanimously Thursday night by the respective board and council of the WGA West and East, including a 2% increase in most of the guild’s minimums in the first year of the contract and 2.5% increases in the second and third years. “Some minimums and rates increase less, typically 1% or 1.5% per year, or increasing only once or twice during the contract,” the WGA said in its new summary. “A few items do not increase during the term of the 2017 contract. Most of these exceptions are the result of patterns established in the industry.”
The less than standard increase in minimums – the DGA recently got increases of 2.5%, 3% and 3% in its new three-year contract – appear to have been a tradeoff for increases to the WGA health plan. Under the writers’ new pact, employer contributions to the health plan will rise from the current 9.5% to 10.5% at the start of the 2017 agreement, to 11% in the second year and to 11.5% in the third year. These increases are expected to generate an additional $14 million in the first year of the contract, $21 million in the second year, and $30 million in the third year. As a concession, the guild agreed to implement cost savings of $7 million per year, from about $150 million in spending per year, for a total savings of $21 million over the life of the contract. The additional revenue and cost savings provide $86 million to the fund.
The health plan will also receive additional funding from an increase in the contribution base for writers on overall deals from $250,000 to $275,000 per year for writers earning more than $250,000. This is expected to generate another $850,000 over the life of the contract and prevents the use of this provision to underpay the health fund.
Altogether, the guild said, “these changes provide $86.85 million to offset about $80 million in projected cost increases during the next three years, achieving the goal of solvency for the health plan for the duration of the agreement, and for some time thereafter.”
Other highlights include:
Increased Compensation for Short Seasons
Writers at the producer level on TV staffs will have a cap of 2.4 weeks of work per episode that their episodic fee pays for. For example, 10 episodic fees pay for up to 24 weeks of work. Weeks in excess of that cap are paid at the writer’s individual weekly rate, computed by dividing the episodic fee by 2.4. These limits will take effect May 2, 2018, and will apply to series with episode orders of 12 or fewer episodes on broadcast networks, and 14 or fewer episodes on cable and digital platforms. Additionally, these rules will apply only to writers guaranteed $350,000 or less in a year, excluding script fees.
Expanded Limits on Options & Exclusivity
The limits on the options under which series writers can be held and the exclusivity requirements they have been subject to have been extended to a broader range of writers. The eligibility threshold has been increased from $210,000 under the 2014 MBA to $275,000 starting May 2, 2018 ($280,500 starting May 2, 2019) for most programs, and to $250,000 and under starting May 2, 2018, for writers working on children’s programs.
Increased Residuals for Made-for-Pay TV
Residuals for made-for-pay television are increased 10% in the first year of the contract and 5% in the second year of the contract.
In addition, writers on made-for-pay television comedy-variety programs, who were excluded from fixed residuals under prior MBAs, will now receive them.
Increased Residuals for Programs Made For High-Budget Subscription Video on Demand
Domestic use of made-for-HBSVOD programs now triggers a residual after 90 days, rather than after one year. The base for the residual will be increased and the residual is increased 50% for the largest SVOD service.
In addition, the contract establishes a new residual for affiliated SVOD use outside the US, such as the extensive use Netflix makes of most of its WGA-written original content. This residual starts at 35% of the domestic residual each year, and declines to 10% of the domestic residual by year 13 for each year thereafter of the life of the program.
Existing series and programs with license agreements that pre-date May 2, 2017, are grandfathered under the current provisions, even if the writing is done after May 2, 2017. If the company changes the deal terms of the license agreement, the 2017 HBSVOD terms apply.
Increased Residuals for Reuse on Ad-Supported Video on Demand
The residual that compensates writers for AVOD on cable and the Internet is increased from 5.0% of the base to 5.5% for each 26-week exhibition period. Also, the base is increased.
Parental Leave with Job Security
In a first-ever provision in a WGA contract, writers on term contracts in episodic television will be entitled to up to eight weeks of unpaid job-protected parental leave for the birth of a new child, the adoption of a child, or the placement of a foster child.
The Guild also agreed to several additional items:
- The Guild extended the scope of provisions for sales to secondary digital broadcast services and second sales to basic cable channels. The current provisions, first negotiated in 2014, required that series be off the air for 18 months or more. Those waiting periods are now eliminated. Instead, a definition of “out of production” will be included which permits newer series to be sold in these ways, but which ensures the series are truly cancelled.
- When a live awards show is rerun on the West Coast only, the residual will be one-third of the normal residual.
- The Guild agreed to allow television series made-for-basic cable to be released on a domestic foreign language basic cable channel for 2% of the license fee rather than triggering fixed residuals.
- The Guild agreed to allow limited theatrical release of television programs under a percentage of revenue residual rather than the current theatrical release payment, to encourage such release without undercutting payment for full releases.
- The Guild added MOWs to previously agreed terms for foreign remakes of television episodes.
- In the case where a writer reacquires a script, The Guild agreed that the original signatory will be released from any residual obligations.
- The Guild agreed to a definition of “Virtual Multi-Channel Video Program Distributors” (vMVPDs). This provides that the new “skinny bundle” services such as Sling TV, PS Vue, YouTube TV, and CBS All Access are treated as cable TV providers under the MBA. Some of these services also carry original content, which will continue to be treated as made-for-SVOD, as they currently are.
- Program fees, payable to writers on network series, are now payable all at once after the season rather than during the season.
- Work lists, through which companies report to the Guild which writers are working for them each week, are now required in new media.
- The tri-guild audit program was extended for three years.
- The definition of a professional writer, which applies to certain technical provisions under the MBA, is broadened to include writing for new media as qualifying work.
- The Guild agreed to accept Notices of Tentative Writing Credits by email, which was not previously permitted as a method of submission.
- The Guild extended provisions for compensation for compilation episodes of weekly series to four-per-week series.