Writer Residuals Rise in New Media While Film Earnings Slow, Guild Finds

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Total scribe earnings rose to $1.563 billion in 2018, a 4.2 percent gain from the year before, the Writers Guild of America West annual report finds.

Amid a war with major talent agencies that could reshape Hollywood dealmaking, the Writers Guild of America West disclosed its finances on Wednesday, showing that its members were seeing increased residuals from new media reuse (from content on Netflix and Hulu) while screenwriter earnings remained flat. Total writer earnings rose to $1.563 billion in 2018, a 4.2 percent gain from the year before. 

The guild also said that it doesn't expect that its litigation against the major agencies will impact its finances in a meaningful way. The WGA filed a lawsuit on April 17 against WME, CAA, UTA and ICM agencies seeking to end packaging fees, a practice in which studios directly pay agents for attaching directors or actors to a writer's pitch. 

Since April, CAA, Endeavor and UTA have all filed anti-trust litigation against the union, leveling claims that the guild's agency boycott violates federal law. "Management believes that the disposition of any such litigation will not materially affect WGAW’s financial condition or earnings," the WGAW said Wednesday in its finance report.

Residuals collected for writers last year totaled $462 million, with a 10.6 percent increase in TV overall and a 1 percent increase in film year over year.

"Consistent with previous years, television continues to be the stronger area, with $307.49 million in receipts, representing 66.5% of the total residuals collected in 2018," the guild's report stated. "As expected, new media is the largest residual category overall, with 16.5% of the total residuals collected."

While the television category as a whole was a bright spot for writers, theatrical residuals for pay TV declined 16.7 percent to $45.9 million while made for basic cable programming declined 4.6 percent to $28.8 million.

Total theatrical residuals totaled $154 million for writers. Theatrical physical home video residuals continued its expected decline, falling 23 percent to $15 million (film home video residuals have fallen 46 percent since 2013). 

New media reuse residuals spiked 57 percent to $47.2 million in the theatrical category and rose 16.5 percent in TV to $76.4 million. 

The number of writers reporting employment and earnings dropped slightly for the first time in five years, with some 6,057 scribes disclosing earnings in 2018 compared with 6,095 in 2017. The number of writers employed on theatrical projects rose slightly from 2,025 to 2,040 last year, while the number of writers reporting earnings from television and digital dropped slightly from 4,906 to 4,830.

The WGA also noted in its financial report that its strike fund is stocked at $15 million. The guild's dispute with the major talent agencies has stretched over three months since talks broke down April 12 over a new franchise agreement. At issue are the practices of packaging and the emergence of affiliate production, in which conglomerates that own agencies, like Endeavor, CAA and UTA, produce their own film and TV content.

More than 7,000 writers have parted ways with their agents since talks broke down. In a June 19 video message to its members, Writers Guild of America West president David Goodman said that the organization would not drop its demand to end packaging fees, saying that participating in a revenue share with "does nothing to combat the abusive practice in which agencies seek to control access to lucrative packaging fees by manipulating who works on any given project, which is the dirty open secret of this business."