Contract2007: The Companies’ Fuzzy Math


August 7, 2007

Producers of Big Fat Greek Wedding Sue To Get Film Revenue

"My Big Fat Greek Wedding" producers Tom Hanks, Rita Wilson, Gary

Goetzman and star Nia Vardalos are suing Gold Circle Films claiming the

production company has breached contracts to pay a portion of revenue

from the hit film. [thre]


August 3, 2007

Ladd, Kanter get $3.2 mil in damageLadd, Kanter get $3.2 mil in damages

A Los Angeles jury Thursday awarded producers Alan Ladd Jr. and Jay

Kanter precisely the $3.2 million in damages on their allocation claim

against Warner Bros. [var]


July 18, 2007

The WGA negotiating committee rejected the AMPTP's proposal for a three-year study on how to share revenue from digital distribution, calling it a delaying tactic.

From Variety:

WGA leaders took an assertive tack of their own on Wednesday, insisting that a residuals revamp is out of the question since companies can't be trusted to tell the truth about production costs.

Two members of the Guild negotiating committee accused studios and networks of practicing fuzzy math on net profit participants on hit TV shows such as "The Simpsons" and successful features such as "Chicago."

WGA leaders…said they prefer to keep the current residuals system since companies find ways to never pay writers in net profit deals — no matter how well the TV shows or movies do.

"The idea that we could agree on what production costs are is absurd," said WGA negotiating committee chief John Bowman at a news conference at the Guild's Hollywood headquarters. "It's impossible to get a handle on (it). Our history has not been very good with profit-based participation."

Bowman said he's seen recent statements from "Simpsons" net profit participants showing the series is $45 million in the red. And negotiating committee member Bill Condon, who penned "Chicago" screenplay and is a profit participant, said he's been told the feature still has a $70 million deficit.


From The Hollywood Reporter:

Bowman dismissed — with support from a slide presentation showing certain profit projections for studio conglomerates — any suggestion that the entertainment business is less profitable than before. He also denied that new-media businesses are too fledgling to tap for additional residuals.

Bowman, a veteran of past WGA-AMPTP negotiations, said he felt that talks were going "about as usual" so far.

"It's very early," process first-timer and WGAW president Patric Verrone told a reporter. "We didn't want to negotiate early because we felt they wouldn't be ready to negotiate seriously. And even 3 1/2 months early, they don't seem ready to negotiate."


Broadcasting&Cable offers some numbers to bolster the WGA Negotiationg Committee's postion:

WGA officials and writer-producers reasserted claims the industry wants to erase a successful residuals formula in existence for nearly half a century even though its economic forecast is rosy.

Price Waterhouse Cooper figures showing that worldwide television revenues from advertising and subscription fees grew from $130 billion in 2002 to more than $170 billion in 2006, and are projected to grow at about 5.8% per year through 2011-making TV a $228 billion global market (while film revenues would grow 4.9% to more than $100 billion by then).


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