Spyglass, MRC ink their own deals with WGA

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UPDATED 4:40 p.m. PT Jan. 14

Add two more to the growing list of companies signing interim agreements with the WGA.

Spyglass Entertainment and Media Rights Capital have concluded interim agreements with the guild that allow writers to work on Spyglass and MRC productions effective immediately.

While the WGA is now pursuing a strategy of signing interim deals with individual production companies, since MRC has a deal to distribute several films through Warner Bros. and Spyglass works with a number of studios, the gambit also could have some benefit for the major struck companies since it contributes to the flow of movies through their release pipelines.

Jonathan Handel, a TroyGould entertainment attorney and former WGA West associate counsel, said the interim acts can be a dicey play for the guild.

"It is a balancing act because the interim deals are good for the studios as well," the former WGA insider said. "When the guild makes a deal with a producer, anything the producer can deliver fills the studio's distribution pipeline. The upside is a continuing demonstration that the guild's demands are not unreasonable. But strategically, it's a real mixed bag."

"I'm in the business of making movies and I need to get to work. We have a lot of projects that we want written," Spyglass co-chairman and CEO Gary Barber told The Hollywood Reporter. "We're excited. We are looking for specs, we are looking for anything. We don't need any financing from anywhere else and we will make our movies."

The AMPTP pooh-poohed the new deals, saying they would not lost long.

"These one-off agreements are meaningless because the companies signing them know they will not have to abide by their terms for very long, since they'll be superseded by whatever final industrywide accords are reached," the organization said. "If companies truly had to live by the terms of these one-off agreements, we are confident none would ever be signed."

WGA West president Patric Verrone said the MRC agreement is similar to the terms of the Worldwide Pants, United Artists and Weinstein Co. deals with the WGA, which offer writers 2.5% of a distributor's gross for the re-use of television productions online and 2% of a distributor's gross for re-use of theatrical films online.

The deals also are similar to the three previously announced interim contracts in giving writers a minimum for original content made for the Internet, one of MRC's main aims in several deals. MRC and Google made a deal in August to distribute exclusive original digital content from "Family Guy" creator Seth MacFarlane online.

MacFarlane was instrumental in helping forge the deal, MRC co-CEOs Asif Satchu and Modi Wiczyk said.

Producers signing interim pacts will be on the hook for paying traditional and new-media residuals unless they can get their eventual distribution partners to sign assumption agreements covering such costs, Handel said.



"Otherwise, the producers would have to make sure that the deal that they do on new media has enough profit built in for them so that they can afford to pay residuals," Handel said.

But terms and conditions of the interim pacts also might bear on the situation, he added.

"All we've seen is the executive summary on the Worldwide Pants deal and the WGA's claim that the other deals are similar," Handel said. "The Worldwide Pants deal does seem close to what the guild was asking for when negotiations with the studios broke down in December. But all of these deals have 'most favored nations clauses' in them, meaning that the interim deals will revert to the terms of any industrywide deal when that gets done. And that's unlikely to be as lucrative because any negotiation involves compromise."

Bryan Cave attorney Norman Samnick said he questions whether some of the production entities inking interim pacts with the WGA can be held responsible for new-media residuals.

"In the case of the Letterman show, I know that Letterman doesn't own (new-media) rights, CBS does," Samnick said.

Concerning the Internet part of the agreement, Verrone said MRC is unique among the companies making deals in that it has about a dozen Internet production deals in addition to about 10 feature films and 10 TV series that would fall under the pact.

MRC recently signed a three-picture distribution deal with Warners for Richard Kelly's horror film "The Box," starring Cameron Diaz; Robert Rodriguez's family fantasy "Shorts"; and "This Side of the Truth," starring Ricky Gervais and Jennifer Garner. "The Box" is in production in Boston.

For Spyglass, which co-finances many studio productions, the deal only applies to projects that they generate. For example, work could not occur on the Mike Myers comedy "The Love Guru," which originated from Paramount.

"Those are two different deal structures," said Barber. "There won't be any generated from the studios as long as the strike is going on, but we can still fully finance our own, and that is what we plan on doing."

Barber also didn't have qualms with the new media aspect of the agreement.

"People are focusing on a future that is uncertain and these agreements are for three years at a time," he said. "When the markets develop we'll have a better understanding and we will explore and see how it develops. But the basic terms were obviously acceptable to us so we went along with it."

Spyglass co-financed the upcoming "27 Dresses" and M. Night Shyamalan's "The Happening" for Fox, and recently wrapped production "Ghost Town" for DreamWorks.

Gregg Goldstein reported from New York; Borys Kit reported from Los Angeles. Carl DiOrio in Los Angeles contributed to this report.
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