My Fellow Writers,
I am pleased to report that the Writers Guild of America, west continues to be in sound financial shape. The fiscal year ending March 31, 2003, provided a surplus that exceeded $1.5 million. This amount should serve as a valuable reserve as we prepare for our upcoming MBA negotiation, which is less than a year away.
The Guild's Operations Fund surplus was especially large, at $1.9 million. This surplus accumulated mostly in the last two months of the fiscal year, as your earnings increased after more than a year without any growth. We had planned for no growth and have held or reduced costs in a number of areas. We will use part of this fiscal year's surplus for facility improvements at the Guild headquarters (including a significant upgrade in computer equipment), but most of it will be held safely in the bank.
Our nostalgically named "Year 2000 Fund" (we cannot change the name without a constitutional amendment) increased to almost $2 million, thanks to the transfer of $1.5 million from the Guild Operations Fund surplus. This fund will be disbursed when special Board-approved projects call for it.
The Strike Fund and Good and Welfare Fund currently hold a total of $10 million. This amount is down slightly from years past due to unrealized stock losses, which should come as no surprise to the reader (and much of which has already been restored in the market upswing in the months following the fiscal year end).
This past year the Board of Directors established a new "Undeliverable Funds" account, which now contains $2.9 million. This amount includes residuals and clip fees due to writers who cannot be located and foreign levies monies held for more than seven years after all reasonable efforts to identify and locate the recipients have been exhausted. The Guild will fully distribute this money should writers or their heirs come forward, and, in the weeks ahead, the WGAw website and this newsletter will begin to carry the names of individuals for whom we hold such funds and the procedure for redemption.
The Guild has unrestricted cash reserves of $11 million and an untapped line of credit of $4 million--to be used only when dire circumstances require.
We can use the financial cushion. There are numerous challenges at hand that prevent us from forecasting significant growth in member earnings and (our chief source of union income) dues in the months ahead. Nonunion network reality programming (we never call them "unscripted" because we know otherwise) has displaced hours of covered programming, cutting deeply into the initial compensation and rerun earnings of our members (not to mention health and pension fund contributions). An overwhelming amount of non-WGA writing being done for cable in the fields of animation, nonfiction, and even traditional comedy-variety programming has created a vast nonunion workforce. These writers, despite having a desire to join our ranks, find themselves unable to find work that will achieve (or in many cases continue) WGAw membership. The wealth of writing being done for nonunion independent features (even though they may be distributed by sister companies of our signatories) has impacted the screen trade in a similar fashion. Additionally, we have seen reduced television writing staffs, fewer TV development deals, and more limited feature film term deals.
This fiscal contraction comes at a time when movie studios are garnering historic profits in box office and DVD sales, broadcast and cable networks experienced massive up front ad sales gains, and federal regulators have been exceedingly kind to the consolidation-prone parent companies who own them. In a sluggish economy, the entertainment industry showed its usual recession-proof vim and vigor. Naturally, the WGAw staff and its volunteer/member leadership will continue to hold the line on costs, but the imbalance between shrinking writer income and growing corporate profits must be rectified-- both in our upcoming collective bargaining talks and in individual contract negotiations.
The Guild prides itself in having a sound, prudent, and conservative fiscal strategy combined with strong operating accountability and I want to offer my thanks to the people who provide it. Our Audit Committee (a subcommittee made up of seven members of the Board of Directors) oversees the rigorous, annual top-to-bottom audit process. Our Membership and Finance Committee (Elias Davis, Kristin Gore, Adam Rodman, John Ziaukas) meets no less than monthly to guide the membership, dues, and finance activities of the Guild. The WGAw staff (led by Executive Director John McLean) who run the financial and member-related operations deserve your appreciation, especially Don Gor (Chief Financial Officer), John Bagley (Controller), Arthur Ureche (Dues), Corinne Tippin (Membership), and Paul Nawrocki (Assistant Executive Director/ Member Services).
I dare not predict the specific events of the next 10 months as we approach contract expiration, but I can offer each member, and prospective member, an invitation to examine this Guild's operating record, review some of its recent achievements (as described in the accompanying story), and join us in our continuing effort to provide our fellow writers with the benefits and services they have come to expect from a fiscally strong and politically united Guild.
Patric M. Verrone