Writers Reach Tentative Agreement

The Writers and Studios have reached a tentative agreement that may end the strike. The agreement was delivered Saturday morning around 2:30am, presented to around 3500 members in Hollywood but still needs to be accepted by the WGA's 10,500 writers. This process will take up two weeks do to most of the votes will be delivered by mail (nuts considering probably all 10,500 writers have email).




If approved, this means that many TV shows will have time to get 4-6 episodes completed to finish off the season in May. Probably more important to Hollywood, it means the Oscars will go on as scheduled. It appears that the writers did get concessions in the area of internet revenue and apparently the DGA played a huge part in helping shape a deal as it provided the needed blueprint to move forward in negotiations. Considering the WGA leadership is supports the agreement, its doubtful that the majority of the membership will reject it, especially since it’s been suggested that if its not approved the studios will not renew negotiations until June when the Screen Actors Guild contract expires. That would mean at least another 4 months of striking and no payments on top of the previous 3.

The full summary of the deal is here, but here are some highlights:
- Contract expires May 1, 2011
- Minimum rates will increase 3.5% per year but with exceptions.
- Writers will get payment for internet content with minimum payments for each minute of a program depending on how used.
- Internet content will now provide credit information with the program.
- Internet content that airs on TV or becomes a TV series or film will then operate under the various TV agreements. (I.e. more money)
- First 13 weeks of online content is residual free if the content is free and 26 weeks if content is not free with a few exceptions. After that the residual fee is 1.2% of the distributor's gross rather then producer's gross.
- Receive 1.2% of distributor gross for rentals and ad-supported streaming (for movies made after July 1, 1971).
- Receive 2% of distributor's gross for ad-supported television for programs made after 1977.
- Receive .36% of distributor's gross for 1st 100,000 download of TV program and 1st 50,000 of a movie. After that its goes to .7% for TV and .65% for films.

There are more details then that but that’s the important stuff. The strike was to get money for online content in whatever manner it was used whether for promotion, ad-revenue or outright purchase. Another win is changing the value from the producer’s gross to the distributor’s gross. This will help avoid the creative accounting that was used by the producers to avoid residual payments. In addition, since the contract is only 3 years long, the WGA will have the ability to adapt faster to any changes or tricks that may arise in the meantime. The studios probably will also consider this a win considering that the WGA's goal had been a 2.5% fee for any and all online content and that number has been cut in half in most cases with a window of up to two weeks before any fees kick in. Long story short, the middle ground was found.

In regards to Transformers 2, the impact is rather small depending on point of view. Bay has made it clear that whether the strike continued or not, the movie was going to get made, a writer's agreement doesn't change that determination but does make it easier to succeed. Probably more important, it means the writers will be writing the movie rather then Bay. Depending on your opinion of Michael Bay as a writer vs. Roberto Orci, Alex Kurtzman and Ehren Kruger this is a good or bad thing. Personally I wouldn't mind reading their draft and compare to Bay's just to see what the difference, if any, in quality.

One final note, the Screen Actors Guild contract expires in June, around the time that principle photography for TF2 is scheduled to start. If they strike, the intended release date could still be impacted. However, with the Director's and Writer's Guild agreements available as blueprints, it should be much easier to work something out and avoid a strike all together.