Writers Guild Scores $5.25 Million Interest Award From Disney on Fox Animation Residuals

The Simpsons - Photofest - H 2019

It’s the largest such settlement in the union’s history.

The Writers Guild of America West reached a $5.25 million interest settlement with Disney on late residuals payments for five Fox animated series – The Simpsons, Family Guy, American Dad, The Cleveland Show and Futurama – the union announced Friday.

It’s the largest interest-only settlement in the WGA’s history, the union said. (The residuals themselves were paid in 2018, late.) The settlement was reached by the guild’s “legal team,” the union announcement to members said, adding that over 250 writers have already received checks.

By way of comparison, the residuals dept. and legal dept. combined usually recover about $1.5 million annually in interest on residuals, across numerous claims, according to figures in the guild’s 2019 annual report.

“This settlement once again proves the dedication of the WGAW to its animation writers and provides 5.25 million more reasons why all writers are better off working under a WGA contract,” said WGAW president David A. Goodman in a statement to The Hollywood Reporter.

That reads as a sidelong reference to the fact that much animation, including animation writing, is covered by IATSE Local 839, also known as The Animation Guild. The IATSE and TAG contracts don’t provide for residuals to writers or other animation workers.

In the past, Fox primetime animation shows were virtually the only animation writing covered by the WGA, but they’ve been joined in the last several years by a number of streaming shows and features. It’s a patchwork, with some animation writing covered by neither union, and sensitivity on both sides. The WGA unsuccessfully sought blanket coverage of animation writing during its 2007-08 strike, a move that was opposed by both IATSE and the studios.

Today’s settlement had its genesis in 2017, when “a rolling tri-Guild audit revealed that Fox had failed to make certain residuals payments on these series,” said the union. “After the WGAW contacted Fox, the studio found that an internal error had led to a widespread failure to pay the residuals for reuse in the foreign free television markets over several years. Fox paid millions of dollars in late paid residuals to the Guild in 2018, which was then distributed to the credited writers.”

That’s not an insignificant sum: foreign free TV (i.e., broadcast television) and foreign cable combined amounted to $59.3 million in residuals in 2018. (No breakout of foreign free TV vs. foreign cable is available.)

After Fox paid, the WGA filed a claim for interest owed on the late payments and set the arbitration for early March 2020. “Despite some resistance from Disney,” said the union, “including an attempt to delay the hearing, the company ultimately agreed to pay the entire amount due and the writers received $5.25 million in interest.” The applicable interest rate is “up to 18% per year.”

Disney, which bought many Fox assets in 2019, did not respond to a request for comment. The shows at issue are covered by SAG-AFTRA as well, for voice talent, and The Simpsons and Family Guy appear to be covered by the Directors Guild of America; hence the tri-guild audit. THR has reached out to the DGA and SAG-AFTRA to determine whether they too received interest payments on behalf of their members for the late residuals, but has not received comment from either.