Residuals Survival Guide

Your Residuals

Residuals for the Use of Excerpts

The use of any portion of one television program or theatrical motion picture in another television program or theatrical motion picture is called an excerpt. Payments are based upon fixed rates that vary according to the length of the excerpt, where the excerpt is used, and how many excerpts are used in the program.

For "compilation" programs (e.g., "best of" or "anniversary programs"), an aggregate payment, based on the length of the program, is due for use of the excerpts included therein. The Guild then allocates the aggregate payment among the credited writer(s) of the programs from which the excerpts were used.

Residuals for Made-for-Public Broadcasting System (“PBS”) Projects

PBS differs from other free television markets because your initial compensation covers an initial license period of four national releases on PBS within three years. A "national release" includes unlimited runs within a seven day period. Generally, after the three-year license period or the four national releases, the Company may purchase additional license periods upon payment to the credited writers of a percentage of the applicable PBS minimums. Note that license fees for the second and subsequent licenses are calculated based on the minimums in effect at the commencement of each license period rather than those in effect at the time the writer was employed.

A percentage of the PBS minimum is also paid as an advance against revenue for use on pay television, videocassette and basic cable. Release in foreign markets is paid the same as free television prior to the 2001 MBA, except that the 35% must be paid in a single installment.

If a project made for PBS is sold to domestic free television, the writer is paid according to the same formula used in calculating residuals due for made-for-free television product using MBA minimums in lieu of PBS minimums.

Residuals for Made-for-Pay Television and Made-for-Videocassette Projects

Residuals for reuse on pay television or videocassette.

Residuals for made-for-pay television or made-for-videocassette projects can be both revenue based and fixed.

Residuals on programs on which the writer’s services commenced prior to May 2, 1998.

For programs on which the writer’s services commenced prior to May 2, 1998, the residuals due for reuse on pay television and videocassette are calculated as 2% of the Company’s combined pay television and videocassette receipts that exceed the applicable break amount. The "break amount" is a negotiated amount defined in the MBA.

Your initial compensation covers salary and runs on the pay television services, as well as videocassette/videodisc sales until the Company’s receipts exceed the break amount. Thereafter, the residual is calculated at 2% of the Company’s combined receipts for pay television and videocassette.

Residuals on programs on which the writer’s services commenced on or after May 2, 1998.

In the 1998 MBA, a new residuals formula was established for long form (90 minutes or longer) made-for-pay television programs of a type generally produced for prime time (e.g., RKO 281) on which writing services commenced on or after May 2, 1998 and prior to May 2, 2001. The break amount no longer applies and you are entitled to a percentage of the Company’s pay television receipts after a set period of time and/or videocassette receipts after a certain number of sales. For other made-for-pay television projects and made-for-videocassette projects, the break amount was reduced by 30%. Under the 1998 MBA, residuals are payable as follows:

Residuals are due within 60 days of the end of the quarter in which gross receipts are received by the Company.

Residuals on dramatic programs made for pay television on which the writer’s services commenced on or after May 2, 2001.

For dramatic programs of a type generally produced for network prime time, including long form, (e.g. Sex and the City, The Sopranos, and Introducing Dorothy Dandridge), the residual for reuse on pay television is triggered by the earliest of 10 exhibition days or one year from the date of the initial exhibition of the program. Thereafter, for each of the next three exhibition years, the credited writer(s) will receive an aggregate residual payment as follows:

For each of the fifth and subsequent exhibition years on that pay television service, the credited writer(s) will receive an aggregate residual payment as follows:

Residuals are due within four months of the first exhibition day of the year in question.

For reuse of such programs on foreign pay television or a subsequent U.S. pay television service, a residual of 2% of receipts after the reduced break amount is due.

For reuse of such programs on videocassette, a residual of 2% of the videocassette receipts after the sale of 100,000 units is due.

For other made-for-pay television programs and for made-for-videocassette programs, a residual of 2% of receipts after the reduced break amount is due for reuse on pay television and videocassette.

Residuals are due within 60 days of the end of the quarter in which gross receipts are received by the Company.

If your product is released in markets other than pay television or videocassette, the following residuals are due:

Residuals for Made-for-Basic Cable Television Projects

(Example 3)

Projects made for basic cable and reused on basic cable generally fall under one of two formulas when residuals are paid: the "Sanchez Formula" and the "Hitchcock Formula." The Company may elect which formula it will use when the writer is employed.

The Sanchez formula is paid similarly to products made for free television. The formula is called "Sanchez" because Sanchez of Bel Air was one of the first made-for-basic cable series for which the Guild negotiated basic cable residuals. It is run-based and calculated on the same residual base (the Other Than Network Prime Time Minimum) used for made-for-free television residuals as follows:

Note that payment for runs two through five is due upon the second run. Payment is due even if runs three through five never occur. Thereafter, each run is paid on a per-run basis.

The residuals are due within four months of the run date.

The Hitchcock formula is calculated in an entirely different manner. The formula is called "Hitchcock" after the 1986 made-for-basic cable series, Alfred Hitchcock Presents.

Under the Hitchcock formula, the residual covers 12 basic cable runs of a program over a five-year period. The Hitchcock formula is the only case where an initial run triggers a residual payment.

Writing services commenced before May 2, 2002.

For high budget dramatic programs on which the writer’s services commenced before May 2, 2002, the residual is calculated as the difference between the applicable minimum for Network Prime Time and the Other Than Network Prime Time minimum. For other types of programs, the reuse fee is 70% of the residual base.

Writing services commenced on or after May 2, 2002.

For high budget dramatic programs on which the writer’s services commenced on or after May 2, 2002, the residual is 120% of the difference between the applicable Network Prime Time Minimum and the Other Than Network Prime Time minimum. For other types of programs, the reuse fee is 84% of the residual base.

Residuals are due within 30 days of initial exhibition and may not be paid prior to the final credit determination.

For foreign television reuse of made-for-basic cable projects on which the writer’s services commenced before May 2, 2001, the residual is 35% of your residual base which may be allocated 15%-10%-10%. For projects on which the writer’s services were commenced on or after May 2, 2001, in addition to 35% of your residual base, you will receive 1.2% of foreign gross receipts when foreign gross receipts reach certain levels.

Residuals are due within 30 days of the Company’s knowledge of the foreign telecast, but no later than six months from the first foreign telecast.

Residuals for reuse of made-for-basic cable programs in syndication are paid the same as made-for-free television programs reused in syndication, with the second run residual applying to the first syndication run, and so on. This rule applies unless your program was part of a series with 66 episodes or less when it ran on basic cable, or your program ran on basic cable more than 10 times. If either exception applies, the residual is 2% of the license fee.

Residuals for reuse of made-for-basic cable programs in all other markets, including pay television, are paid the same as reuse of made-for-free television programs.

Residuals for Daytime Serials

Residuals for worldwide reuse of daytime serials (sometimes called "soap operas") are based on "aggregate" minimums. Aggregate means the writers are employed within a group, often for specific functions, to work for a specified term. This minimum varies depending on when writing services are performed and the length of the program.

The residual received for reuse of an episode of a daytime serial is determined by first dividing the aggregate minimum for headwriter services and individual scripts by five; that becomes the residual base per show. Thereafter, the residuals are allocated in the following percentages:

In the event there is more than one writer in a category, the applicable percentage is divided equally among the writers in that category.

Residuals for reuse on network and syndicated television are payable in the same manner as those for other made-for-free television product.

For network television reuse, residuals are due within 30 days of the date of telecast.

For syndicated television reuse, residuals are due within four months of the date of telecast.

For programs on which the writer’s services commenced prior to May 2, 2001, residuals for foreign television reuse are paid at 35% of your residual base (payable in increments of 15%- 10%-10% when receipts reach certain levels). For programs on which the writer’s services commenced on or after May 2, 2001, in addition to the 35% payment, you will receive your share of 1.2% of foreign gross receipts when foreign gross receipts reach certain levels.

For foreign television reuse, residuals are due within 30 days of the Company’s knowledge of the foreign telecast, but no later than six months from the first foreign telecast.

Residuals for reuse in all other markets are payable in the same manner as those for other made-for-free television product.

For reuse in all other markets, residuals are due within 60 days of the end of the quarter in which the Company received the revenues.

Residuals for Comedy/Variety Projects

Comedy/variety residuals.

The residual base and allocation of residuals for comedy/variety programs differ from other made-for-free television residuals. Comedy/Variety programs include talk shows and sketch comedy programs such as The Late Show With David Letterman and Saturday Night Live. Comedy/variety writers are either hired on an "aggregate," meaning they are employed as a pool to work a specified term, or on a per show basis. If you have been employed on an aggregate for a guaranteed term, then your residual base is determined by the number of writers employed, the date of employment, the "scripted" length of the program and how often the program runs (e.g., once a week or more). Once the residual base is determined, the residual compensation is paid in the same ratio that your initial compensation bears to each of the other writers’ compensation. In an aggregate, there are no teams and each writer is treated as an individual for residuals purposes.

The following example, using a residual base of $40,000, demonstrates how the residuals would be allocated if four writers were employed at varying percentages:

Based upon the above calculations, Writer A will receive 37.5% of the residuals paid, Writer B and Writer C will each receive 25% of the residuals, and Writer D will receive 12.5% of the residuals.

If you are not employed for a guaranteed term, then your residuals are based on individual comedy/variety residual bases per writer or team of two. In that instance, each writer (or team of two) receives a residual payment based on the per-show minimum. Residuals for free television reuse of comedy/variety projects.

For reruns on free television of a comedy/variety program produced for Network Prime Time broadcast once a week or less, the residuals are equal to the following percentages of the residual base:

For reruns of a comedy/variety program not produced for network prime time broadcast, the residuals are equal to the following percentages of the residual base:

Network residuals are due within 30 days of the date of telecast. Syndicated residuals are due within four months of the date of telecast.

For writing services commenced before May 2, 2001.

The foreign television residuals for comedy/variety programs are paid in the same manner as residuals for dramatic/episodic programs produced for free television (15%-10%-10%, or a 35% collapsed payment). For those programs originally produced for network prime time, broadcast once a week or less, the residual base is the Other Than Network Prime Time story and teleplay minimum, increased to compensate for the number of credited writers. The writers then share residual compensation in the same ratio as previously noted in "Comedy/variety residuals."

Residuals are due within 30 days of the Company’s knowledge of the foreign telecast, but no later than six months from the first foreign telecast.

For writing services commenced on or after May 2, 2001.

As with residuals for dramatic/episodic programs produced for free television, for programs on which the writer’s services commenced on or after May 2, 2001, residuals for foreign reuse of comedy/variety programs are paid at 35% of your residual base. After payment of that 35%, 1.2% of foreign gross receipts is due, in perpetuity, both payable as noted in "Comedy/variety residuals." The 1.2% payment is triggered when foreign gross receipts reach the following levels:

Payment is due every six months.

Residuals for the reuse of made-for-free television comedy/variety programs in other markets including basic cable, pay television, videocassette, theatrical, and in-flight are the same as those for other made-for-free television product.

Residuals for Made-for-Free Television Projects

(Example 2)

Product that is made for free television (network or syndication) generates both fixed and revenue based residuals depending on where it is reused. The first broadcast is covered by your initial compensation and therefore no residual is due for this use. For "dramatic" programs (e.g. episodic dramas, sitcoms, television movies, and miniseries), the Other Than Network Prime Time minimums are generally the basis for residuals calculations, which we will call the "residual base."

If the material is rerun on network prime time television, a residual of 100% of your residual base is due. For all other domestic reuse–network non-prime time and syndication–a decreasing percentage of your residual base is due.

When the product is broadcast on foreign television, you receive up to a total of 35% of your residual base. The 35% payment can be made in three installments of 15%-10%-10%, which are triggered by the first foreign telecast and levels of foreign sales. For programs on which the writer’s services were commenced on or after May 2, 2001, an additional 1.2% of foreign gross receipts (from both free television and basic cable) is due when distributor’s foreign gross receipts reach certain levels.

For reuse in other markets, you will receive revenue based residuals. It is important to remember that, in most cases, the Company is not obligated to pay revenue based residuals until it actually receives the revenue due for the license of the product. If the license fee covers several years, the revenue may be spread over the entire term and the residuals would be paid in the same manner. Residuals that are revenue based are allocated as follows: "Written by"–100%; "Teleplay by" (if a "Story by" or "Television Story by" credit is accorded)–75%; "Story by" or "Television Story by"–25%. In general, if no form of "Story by" credit is accorded, 100% goes to the writer(s) receiving "Teleplay by" credit.

The following are the percentages and the due dates for each type of residual compensation payable for made-for-free television product:

No residual is due for the initial broadcast. All reruns in network prime time are paid at 100% of your residual base.

In general, as of May 2, 2003, all reruns in prime time on the Fox Broadcasting Company ("FBC") will be paid at the network rate of 100% of your residual base.

Residuals are due within 30 days of the date of telecast.

A percentage of your residual base is due based on the number of broadcasts as follows:

Residuals are due within 30 days of the date of telecast.

A percentage of your residual base is due based on the number of broadcasts as follows:

Residuals are due within four months of the date of telecast. For reruns occurring after May 1, 2003 on the WB or UPN, payment is due within 30 days of the date of telecast.

Half-hour series placed into syndication after May 1, 2001.

For half-hour series syndicated in markets representing 50% or less of U.S. television households, an additional residual of 20% of your residual base is due for each run. In the event the series is also syndicated in more than 50% of U.S. television households, full payment of the applicable rerun percentage, as set forth above, is due for each run.

Payment is due within four months of the telecast date.

Reruns on FBC in prime time are subject to FBC percentages as set forth below. Residuals for services performed for FBC prior to May 2, 1995 are the same as the syndication rates.

Residuals are due within four months of the telecast date.

After May 1, 2003

Residuals on all programs rerun in prime time on FBC, regardless of the date on which writing services were performed, will be paid at the same rate as projects rerun on ABC, CBS, and NBC, which is 100% of your residual base. The increase to 100% of your residual base does not apply to reruns occurring between May 2, 2003 and October 31, 2003 of episodes of FBC series 1) produced for the 2002 – 2003 FBC prime time season, and 2) written prior to May 2, 2003.

FBC Non-prime time

Residuals for non-prime time reruns on or before May 1, 2003 of programs produced for the FBC are paid at the syndication rates discussed above. After May 1, 2003, such reruns are paid at the network non-prime time rates.

Residuals are due within 30 days of the date of telecast.

Writing services commenced before May 2, 2001

A maximum of 35% of your residual base is due. The 35% may be paid in increments of 15%-10%-10%.

The initial payment is due within 30 days of the Company’s knowledge of the foreign telecast, but no later than six months from the first foreign telecast. Subsequent levels are due when levels of receipts, determined by the length of the program, have been reached.

Writing services commenced on or after May 2, 2001

After payment of the 35%, 1.2% of foreign gross receipts is due, in perpetuity. The 1.2% payment is triggered when foreign gross receipts reach the following levels:

Effective May 2, 2003, the level of receipts increases to $357,500, $715,000, $1,830,000, $3,060,000, and $4,085,000.

Payment is due every six months.

Up to 150% of your television residual base, or 100% of the theatrical minimum depending on the scope of release.1

Residuals are due upon theatrical release.

1.2% of distributor’s gross receipts.

Residuals are due within 60 days of the end of the quarter in which gross receipts or licensing fees are received by the Company.

1This is a theatrical release payment for a program produced for television. If you write a television script but it is produced as a theatrical project, please call the WGAw Contracts Department at (323) 782-4501 or the WGAE at (212) 767-7800.

1.2% of distributor’s gross receipts.

Residuals are due within 60 days of the end of the quarter in which gross receipts or licensing fees are received by the Company.

For programs produced prior to March 1, 1985: 1.2% of the Company’s reportable gross.

For programs produced on or after March 1, 1985: 1.5% of the first million dollars of the Company’s reportable gross (or "producer’s gross"); 1.8% thereafter.

Residuals are due within 60 days of the end of the quarter in which gross receipts or licensing fees are received by the Company.

For programs produced prior to July 1, 1984: 2.5% of distributor’s gross receipts.

For programs produced on or after July 1, 1984: 2% of distributor’s gross receipts.

Residuals are due within 60 days of the end of the quarter in which gross receipts or licensing fees are received by the Company.

In 1988, the Guild agreed to change residuals due for certain one-hour made-for-network prime time series rerun in syndication. As of May 2, 2002, the waiver will also apply to one-hour dramatic series produced for FBC which have not been exhibited in syndication prior to May 2, 2002.

Previously, regular fixed syndication residuals applied to such programs. However, under a Sideletter to the 1988 MBA, often called the "one-hour waiver," the residuals due may be as low as 50% of the usual fixed residual or as high as 150% of the fixed residual. If the total license per episode is $650,000, you will receive 100% of the fixed syndication residual amount. If the total license fee per episode is less than $650,000, then you will receive less than 100%, to a floor of 50%, of the residual calculated under the regular syndication rerun formula. (If the program is telecast in markets amounting to less than one-third of the television households in the U.S., the 50% floor does not apply.) Likewise, if the per episode license fee is over $650,000, you will receive more than 100% of the regular residual amount, to a ceiling of 150%.

Residuals are due within four months of the date of telecast.

In the case of foreign reuse of a program for which a one-hour waiver applies, a single payment of the 35% of the residual base is due. For programs on which writing services commenced on or after May 2, 2001, an additional 1.2% payment is due. Residuals are due within 30 days of the Company’s knowledge of the foreign telecast, but no later than six months from the first foreign telecast.

The Company may seek to include an "Application of Excess" provision in your writing services agreement. Under this provision of the MBA, any monies paid to you in initial compensation for story and/or teleplay (not rewrites or polishes) that exceed double the Guild minimum may be credited against residuals. The Company may only use this provision if the intent to do so is stated in your writing services agreement.

Residuals for Made-for-Theatrical Motion Pictures

(Example 1)

Residuals due for made-for-theatrical motion pictures are revenue based. The residuals due the writer are 1.2% of the distributor’s gross receipts, except for residuals due for videocassette usage which are calculated at a slightly higher percentage of the producer’s gross receipts. Residuals for made-for-theatrical projects are allocated as follows: "Written by"–100%; "Screenplay by" (if a "Story by" or "Screen Story by" credit is accorded)–75%; "Story by" or "Screen Story by"–25%. In general, if no form of "Story by" credit is accorded, 100% goes to the writer(s) receiving "Screenplay by" credit.

The following are the percentages and the due dates for each type of residual compensation payable for a made-for-theatrical motion picture.

Effective May 2, 2001, upon the final determination of writing credits by the Guild, the credited writer(s) of a theatrical motion picture shall receive payment, in the aggregate, of $5,000. This "DVD script publication fee" gives the Company the right to publish the script on DVD, and is due regardless of whether the Company elects to exercise such right. The payment of the script publication fee and/or the exercise of the script publication right does not in any way affect any other rights held by a writer entitled to Separation of Rights in the motion picture, including other publication rights.

Payment is due within 30 days of the final determination of credits by the Guild.