Writers, producers reach tentative deal

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UPDATED 8:48 p.m. CET Feb. 9

BERLIN -- Industry players at the Berlinale responded with huzzahs Saturday to reports that the WGA had finalized its tentative agreement with the Alliance of Motion Picture and Television Producers, which could see writers back to work as early as Monday.

In a news conference Saturday in New York, WGA East president Michael Winship said, "It's not a done deal, but it's pretty much done."

News of a potential three-year pact first leaked out in the early hours of Saturday when WGA leaders sent an e-mail to its 10,500 members summarizing the main deal points ahead of key membership meetings in New York and Los Angeles on Saturday.

The WGA West board of directors and the WGA East Council will meet Sunday to decide whether to refer the tentative deal to membership for a ratification process that could take up to a month. But the board and council do have the power to end the strike immediately, if they choose not to wait for a membership referendum on that question. The latter member vote would take anywhere from two to 10 days, so the expectation is that the board and council may opt to make the decision to get the industry back to work.

"I'm really excited," said GK Films head Graham King, whose Johnny Depp starrer "Shantaram" was shelved due to the strike. "I can't wait to get back to work. Everyone here is excited. It's been a horrendous time. Now I'll have a lot work to do when I get back to L.A."

"It's very good," said Germany's Constantin Film's acquisitions head, Yoko Higuchi-Zitzmann. "The market has been very quiet, and the strike had a lot to do with that. I don't think that an agreement will have a huge effect on the market now. Everyone is looking to Cannes when it will be clear what will happen with the SAG strike."

The expectation here for several days was that an agreement would be reached



"I personally had bet on (the strike being settled) next week, but this is great, of course, it means projects that we have been talking about for a long time will now pick up speed," said Henning Molfenter, head of production at Studio Babelsberg Motion Picture. "The strike slowed everything down, meant projects that were in development didn't progress. So we are happy it's over."

The proposed terms were very similar to those in the recently reached DGA agreement now out for ratification by directors, with the notable exception of the writers getting sweeter deals on TV content that is streamed over the Internet.

In the third year of the proposed three-year WGA contract, writers would get a straight 2% of the distributor's gross on such content in all years that the content is streams. That's likely to be a bit more lucrative than the roughly $1,200 payment writers will get on such content in the first year of stream during the first two years of the contract. The DGA has the $1,200 first-year streaming compensation written into all three years of its tentative pact.

Like the DGA, the WGA has a 17-day window placed on all streamed content, during which studios can stream content for free without making payments to writers.

In the email, WGA West president Patric Verrone and Winship told members it was time to end the strike and emphasized the gains made in new media.

"It is an agreement that protects a future in which the Internet becomes the primary means of both content creation and delivery," they said. "It creates formulas for revenue-based residuals in new media, provides access to deals and financial data to help us evaluate and enforce those formulas, and establishes the principle that, 'When they get paid, we get paid ... We believe that continuing to strike now will not bring sufficient gains to outweigh the potential risks and that the time has come to accept this contract and settle the strike," they said.

Earlier in the day, writers were being encouraged by strike captains to show up to the bi-coastal meetings to vote on the new conditions:

"The end is in sight," said one strike captain in an email. "But it is still imperative that we all go to the membership meeting at the Shrine Saturday night. Our presence there will directly affect how soon this strike is called off ... We've sacrificed a lot in this ordeal. This is the final stretch, folks."



Key points in the deal include:

-- An increase in minimum rates of 3.5% each year. Exceptions include network primetime rates and daytime serial script fees, which will increase 3% each period. Program fees and upset price increase once by 3% in the second year; and clip fees increase once by 5% in the third year.

-- Made-for pay TV residuals: An annual residual payments' increase from $3,000 to $3,500 for a half-hour program and from $5,000 to $6,000 for an hourlong program.

-- Residuals of 1.2% of distributor's gross receipts for download rentals where the viewer pays for limited new media access.

-- Residuals for ad-supported streaming of feature films produced after July 1, 1971, payable at 1.2% of distributor's gross receipts.

-- Television ad-supported streaming (library) for programs produced after 1977, payable at 2% of distributors' gross receipts.

-- For download sales (electronic sell-through) where the viewer pays for permanent use of a program, residuals are to be paid at 0.36% of distributor's gross receipts for the first 100,000 downloads of a television program and the first 50,000 downloads of a feature. After that, residuals are paid at 0.7% of distributor's gross receipts for television programs and 0.65% for feature films.

-- Ad-supported streaming of television programs after 1977 payable at 2% of distributors' gross receipts one year from the end of an initial streaming window.

-- Residual payments for network primetime where in the first and second years of a contract, after the initial window, for network primetime television programs, a fixed residual of 3% of the residual base ("applicable minimum") will be paid for each of up to two 26-week periods. The agreement also calls for in the third year of this contract that 2% of the distributor's gross formula is applied immediately after the initial streaming window.

-- Residual payment (all other programs): After the initial streaming window, a fixed residual of 3% of the residual base (the "applicable minimum") is paid for each of up to two 26-week periods in the first two years of this contract. In the third year of this contract, the payment rate rises to 3.5% of the residual base.

-- The agreement also covered a definition for fair-market value on new-media residuals; access to information, clips and promotions; and health and pension fund rates.

The Internet residuals agreement stipulates that initial compensation covers writing services and 13 weeks of availability in new media when the viewer does not pay and 26 of availability in new media when the viewer pays.

"We had a couple of project hovering for a while and now we'll be able to move to the next step with them," said Kurt Rauer, president of Unified Pictures. "This is great."

For more information, visit WGA.org. and UnitedHollywood.com.

Carl DiOrio in Los Angeles and Scott Roxborough in Berlin contributed to this report.
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