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Writers Guild's foreign levies pool is bigger, annual report shows

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The guild's West Coast union as of March 31 had amassed about $30 million that have yet to be paid to writers whose movies or TV shows were viewed overseas.

August 22, 2009|Richard Verrier

The Writers Guild of America's "foreign levies" headache is growing.

The guild's West Coast union had amassed about $30 million in funds that have yet to be paid to writers as of March 31, according to its recently released annual report. That's up from $20 million in 2007.

Most of the funds belong to hundreds of writers, or their estates, whose movies or TV shows were viewed in foreign countries that levy special taxes to compensate authors for the reuse and copying of their work.

The guild receives money, held in trust, from foreign collection societies and is responsible for disbursing the proceeds to writers.

But its handling of the funds has been a thorny issue in recent years, triggering a class-action lawsuit in 2005. The suit alleged that the guild was improperly holding on to money that belonged to writers and that it had no authority to collect the funds on their behalf.

"When we brought this lawsuit, we didn't feel they were doing a good job, and this is continued evidence," said Neville Johnson, an attorney representing the writers suing the guild. He has filed similar lawsuits against the Screen Actors Guild and the Directors Guild of America.

WGA officials declined to comment, citing the pending lawsuit.

Guild officials have dismissed allegations that they were deliberately withholding money and have cited the difficulty of tracking down recipients, many of whom are deceased or aren't guild members. They've also blamed collection societies for sending incomplete or inaccurate information that makes it hard to track down those entitled to the money.

Some WGA members are skeptical of those explanations.

"I'm sorry, it doesn't make sense," guild member Eric Hughes said. "This is our money and I don't understand why members are reluctant to demand an accounting."

The issue previously flared up in 2007, when the guild disclosed that it had accumulated $20 million in undistributed foreign levy funds. At the time, the guild vowed to step up its efforts to reduce the backlog.

Guild insiders said the union had paid out $13 million in foreign levies in the latest fiscal year that ended March 31. They said the foreign levies balance had grown partly because the guild was receiving more money from more collection societies than it had in the past, and some of the payments have been held up because of the litigation.

The WGA collected $539,934 in administrative fees in the last fiscal year to "offset the expenses of negotiating and administering the foreign levies program," according to the annual report.

Foreign levies date to the 1980s, when some countries began imposing taxes on home video rentals, blank videocassettes, recording equipment and cable retransmissions, among other things. Initially the levies were claimed by film and TV production companies. The writers guild and directors guild later challenged the claims.

To settle the dispute, the sides reached an agreement giving producers 85% of foreign levies and the guilds 15%. The split was subsequently amended so that producers would receive 50% and the guilds 50%, which they divide equally.

Among the plaintiffs in the Writers Guild case is William Richert, whose credits include "The Man in the Iron Mask" and "A Night in the Life of Jimmy Reardon." Richert maintained that he was shortchanged when the guild sent him a foreign levy check for $467 for movies shown abroad from 2002 to 2005.

Recent talks to settle the case collapsed.

The directors guild settled a similar lawsuit over its handling of foreign levies last year. The DGA said that as of June, it had $10 million in foreign levy funds that had not yet been disbursed. The guild said it had disbursed more than $77 million in foreign levies to date.

"Leave It to Beaver" star Ken Osmond is suing the Screen Actors Guild, alleging that the union withheld money from him and other actors.

SAG denies the claim and says it has disbursed more than $4.5 million in foreign levies since it began distributing the money less than two years ago. The guild has $8.5 million that has yet to be paid out, a spokeswoman said.

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richard.verrier@latimes.com

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