Writers to Get Better Health Benefits but Not a Bigger Slice of DVD Sales

After months of stalled negotiations, Hollywood TV and film writers agreed Wednesday to a $58-million contract with studios and TV networks that boosts health benefits but fails to secure a larger chunk of DVD revenue.

The 12,000 members of the Writers Guild of America will see an additional $37 million in contributions to shore up the guild’s healthcare fund, along with increased pension contributions, better minimum payments and increased money to writers of made-for-pay-TV programs.

But studios were unyielding in giving up a bigger share of their DVD bonanza, which the union had staked out nearly a year ago as a crucial issue in the contract talks.

The guild also failed to make inroads in getting payments for writers of reality shows, and agreed to a rollback of residuals on new prime-time dramas to help fledgling shows.

John McLean, executive director of the WGA’s Western office, acknowledged that he was disappointed with the way the DVD issue was resolved. But the negotiator said the healthcare agreement was a major concession from the Alliance of Motion Picture and Television Producers, the studios’ bargaining arm.

“There is no question we are disappointed we didn’t get a deal from [DVD] but the healthcare numbers sucked the money out of this deal,” McLean said. “As a negotiator you always have to look at the whole package and how much money and what the priorities are. Healthcare covers everybody in the guild.”

Eric Hughes, who lost a bid last month to become WGA, West, president, criticized the union for letting its members down in failing to make inroads in DVDs and reality shows.

“It’s a major disappointment,” Hughes said. “Two of the major things we were fighting for were not even addressed.”

Studios have made it clear to Hollywood’s guilds that they won’t raise DVD rates. With domestic box office revenue increasingly becoming a smaller piece of their revenue pie, the studios argue that they need DVD profits to offset soaring production and marketing costs. Writers counter that they currently receive a scant nickel of every DVD sold.

Studio negotiator J. Nicholas Counter III called the agreement “a fair deal that keeps writers working, keeps the town working, and addresses their most crucial concerns.”

The contract, which must be ratified by writers, runs from Nov. 1 through Oct. 31, 2007.

WGA members had been working without a contract since May 2. Although a strike was considered unlikely, tensions between writers and studios increased significantly when writers walked away from the bargaining table in June. But back channel discussions ultimately helped bring about a deal.

In walking away from the table, writers had hoped that the powerful Directors Guild of America would make headway on the DVD issue during its recent talks with studios, allowing writers to piggyback on any agreement.

But the DGA failed to get a DVD increase when they reached agreement last month, pushing instead for better health benefits. Given that, it was unlikely that other unions would win concessions on DVDs.

WGA President Daniel Petrie Jr. said DGA negotiators “believed that the studios would not give on DVDs without a lengthy strike or possibly with a lengthy strike.... We ran into exactly the same resistance that they were seeing.”

The Screen Actors Guild and its sister organization, the American Federation of Television and Radio Artists, are the next unions negotiating with the studios and networks on a new contract to replace one expiring next year.

SAG and AFTRA have made it known that actors also want a bigger piece of the DVD pie. But with the DGA and WGA agreements as precedent, Hollywood labor officials believe it is unlikely they will see any gains.