The multimillion-dollar Foreign Levies Agreement between the MPAA and the WGA and DGA, which had been set to expire on December 31, has been extended for another three years. The pact covers monies payable under foreign laws to writers and directors of copyrighted works in the U.S.
Since 1990, the DGA has collected more than $160 million under the agreement on behalf of directors, and the WGA has collected more than $152 million for writers. Production companies have received well north of $350 million. The DGA disbursed $14.3 million in 2013, and the WGA dished out $13.3 million during the fiscal year ended March 31, while the companies received more than $60 million. The extension of the agreement keeps in place the 50-50 split between the unions and the studios, with each guild receiving a 25% share of the foreign levies.
The money comes from a tax on blank media and equipment used to record American films and TV shows broadcast in Japan, Argentina and 17 European countries. The levies are intended to compensate the “authors” of American films and TV shows exhibited in each country. Some countries also impose levies on cable retransmissions and video rentals. Under the relevant copyright regimes and foreign laws, writers and directors are considered the “authors” of their works. The money is rounded up by foreign collecting societies and distributed to the guilds and studios.
In the 1980s, several European countries began collecting these levies on behalf of rights-holders, but a dispute quickly arose in the U.S. over how, and to whom, the money should be distributed. The MPAA argued that under U.S. copyright law, its member companies were the sole “authors” of the films and TV shows they produced. The guilds, however, argued that under European laws, the individual directors and writers were the “authors” of their films and TV shows and were entitled to receive the author’s share of the levies. A deal was reached in June 1990, specifying that a certain percentage of the foreign levies would go to the writers and directors. That first Foreign Levies Agreement only granted the guilds 15% of the money collected, but over the years it has grown to 50% – where it remains under new three-year extension.