Residual resentment slows Hollywood talks
Studios want to revamp pay for reruns. Writers and actors want more.
By Richard Verrier
Los Angeles Times Staff Writer
October 16, 2007
As a young writer, Marc Cherry found early success on NBC's hit show "The Golden Girls," then toiled in obscurity for the next 12 years.
Two shows he created for Fox and CBS were canceled. None of the TV pilots he developed clicked. In debt $30,000, he sold his Hancock Park home, moved into a small condo in Studio City and even borrowed money from his mother.
What sustained him in the fallow years, before his desperation inspired ABC's 2004 hit "Desperate Housewives," were the little green envelopes that showed up in his mailbox. Reruns of "The Golden Girls," which got a second life on the Lifetime cable channel, brought residual checks that one year totaled $75,000.
Residual fees are at the center of labor talks underway between the Hollywood studios and the union that represents movie and TV writers. The major studios want to revamp the decades-old system, citing soaring production costs and fragmented audiences amid today's digital revolution.
But the writers say these payments help them weather Hollywood's feast-and-famine work cycles. Without residuals, Cherry said, he might have been forced to "get a real job."
TV viewers might never have had "Desperate Housewives," the darkly comic tale of suburbia that helped lift ABC out of the doldrums.
"These residuals allowed me to survive long enough to create a show that is a huge profit center for the network," said Cherry, 45, a Long Beach native and member of the Writers Guild of America negotiating committee. "That's what kept me afloat."
The major studios and the Writers Guild are far apart in negotiations on a three-year contract that would replace the one that expires Oct. 31. The writers are scheduled to vote this week on whether to give the board the authority to call a strike if no deal can be reached. Studios are preparing for a strike as early as Nov. 1, which would be the first writers' walkout in nearly 20 years.
A major sticking point in the talks is the residual fees that actors, writers and directors receive when their movies or TV shows are rerun on television or sold for release on home video and in foreign markets. The writers' West Coast guild collected $264 million in residuals in 2006.
But the writers want more money. They are pushing to double the payment they receive for TV shows or films that are released on home video. Currently, they receive about 4 cents for every DVD sold under a pay formula agreed to in the 1980s, when manufacturing home videocassettes was expensive. They also seek higher pay for movies and TV shows sold over the Internet and residuals for shows created for the Web and other new media.
Studio executives, however, have resisted paying more for digital downloads and contend that it's premature to set pay formulas for online shows when the medium is experimental.
They propose overhauling the system, paying TV and film residuals only after the studios have recouped their costs. They contend that residuals were developed at a time when studios more than offset their film costs at the box office, which hasn't been the case for nearly three decades. TV networks say they have been squeezed by a shrinking syndication market and a migration of younger audiences to the Internet.
"It is simply no longer tenable to be paying residuals on losses as we have for three decades," said Nick Counter, president of the Alliance of Motion Picture and Television Producers. "We must adapt to the realities of the marketplace, the new demands from our audiences and new technologies, or suffer the fate of those who deny change or don't adapt fast enough."
Proposed changes won't eliminate residuals, he said, but "adjust the point at which they are triggered. . . . Writers are highly regarded and highly rewarded, and that is not going to change."
Guild officials have dismissed the studio proposal, saying it would rely on dubious Hollywood accounting.
The residual payment system dates to the early days of radio. Major Hollywood studios began offering TV residuals in the 1950s on the theory that talent should be compensated for the ongoing reuse of their work.
Since then, residuals have been a fixture in Hollywood -- and a recurring source of dispute. Ronald Reagan led the Screen Actors Guild on a strike in 1960 to secure residuals for feature films shown on television. In 1988, a fight over residual payments for TV shows broadcast in foreign countries helped trigger a 22-week strike by writers. The Writers Guild could be joined in its fight for higher residuals by SAG, which will be negotiating a labor contract of its own next year to replace the one that expires in June 2008.
Some industry watchers interpret the studios' residuals proposal as a negotiating tactic rather than a serious intention.
Still, the move has triggered a fierce reaction among rank-and-file actors and writers, who don't have the clout to secure lucrative deals that cut them in on profits.
"You tell me you're going to cut back on my residuals, you might as well put a gun to my head," said Vic Polizos, a veteran TV and film actor. "That's my lifeblood. It's my kids' lifeblood. I'll go to the mat to defend it."
You may not have heard of Polizos, but you've probably seen him. The 60-year-old actor has appeared in more than 80 films and TV shows, often as an FBI agent or a police detective. His credits include such TV shows as "NYPD Blue" and "Jericho" and films including "Harlem Nights" and "Prizzi's Honor."
Despite his large body of work, Polizos lives modestly in a middle-class neighborhood in Reseda. He earns about $75,000 to $100,000 a year and as much as $35,000 more from residuals. The extra money, he said, has helped him raise his two children -- a teenage daughter and a son now in college.
A barrel-chested man with a theatrical voice that hints of his Southern roots, Polizos often plays New Yorkers, though he was raised in Montgomery, Ala., where his father owned two Greek restaurants.
After studying acting at Temple University in Philadelphia, Polizos worked on and off Broadway before landing his first film role in Robert Redford's 1980 movie "Brubaker."
The film, in which he played trustee prison guard Billy Blalock, gave him his first residual check: a $900 payment when the movie ran on cable TV. That was three times his weekly wage in New York, where he waited tables between theater gigs.
"It was enough money for me to see my folks [in Alabama] and buy a few Christmas presents," he said. "It was like God had tapped me on the shoulder."
After moving to Hollywood in 1984 with his first wife, Polizos landed guest appearances in shows such as "Seinfeld" and films including Stephen King's "Graveyard Shift."
Then he went nearly two years without steady work, earning as little as $30,000 a year from small jobs while relying on residuals to support his family.
"I don't know what I would have done without the residuals," he said.
Writer-producer Brian Scully, now a writer for the Fox TV show "Family Guy," gives his own testimonial. The onetime comedian from West Springfield, Mass., thought he was set once he landed a job on the syndicated TV series "Out of This World." When the show ended after several seasons, Scully spent more than a year out of work.
He thought he might have to return to selling TVs at JCPenney in Glendale until he received a $20,000 check for reruns of the show.
Such residual checks have helped Scully, 47, keep his health insurance benefits, which are tied to minimum earnings, something he appreciated recently when his wife gave birth to a premature baby weighing 2 1/2 pounds. "If that had happened in a year when I didn't have health insurance," he said, "I'd lose everything."
Anne-Marie Johnson, best known for playing Althea Tibbs in the NBC series "In the Heat of the Night," never gave much thought to residual checks until circumstances intruded on a busy career.
In 2001, Johnson was on the set of the TV series "JAG" when she got a phone call that her mother had been hospitalized, severely ill from sepsis.
The news hit Johnson hard. She was close to her mother, a former high school teacher. Determined to be at her side, Johnson walked off the set and didn't return, leaving behind a show she had worked on for five years.
"I had to make a choice of continuing to work or care for my mother," said Johnson, a former first national vice president of the Screen Actors Guild. "I told my manager, 'Don't call me.' "
She moved into her mother's Silver Lake home and cared for her around the clock, operating respiratory equipment, administering medicines and coordinating home nursing care. "She was my best friend in the world," said Johnson, whose father had passed away in 1987.
For the next two years, Johnson lived off residuals, collecting as much as $37,000 annually from reruns of "In Living Color" and other shows. The money paid her bills and helped defray nearly $100,000 in out-of-pocket home-care expenses for her mother, who died in February 2005.
"Residuals," she said, "saved my life."