Argentina and the DGA are locked in a multimillion-dollar dispute over the nonpayment of foreign levies. Argentinean collection societies have paid the WGA more than $20.4 million in foreign levies since 1992 but not a dime to the Directors Guild.
During the past 25 years, Argentina, Japan and 16 European countries have paid nearly $1 billion to the American “authors” of films and TV shows for the copying, rental and retransmission of their work. Half the money goes to the companies, and the other half is split between the DGA and the WGA. Last year, the DGA distributed $18,629,577 in foreign levies to members and non-members alike, which is just $3.5 million short of all the dues DGA members paid last year.
Up until a few years ago, Argentina didn’t even consider directors to be the “authors” of their work, as defined by its laws and various copyright treaties. The DGA says the South American country changed its laws to recognize directors as “authors” six or seven years ago but that the collecting societies that distribute the money there still refuse to pay up.
Just how much the DGA owed is unclear. Argentina is the fifth-largest payer of foreign levies and, on average, has been paying the WGA about $1.275 million a year over the past 16 years, according to WGA reports. Six years of nonpayment to the DGA would come to more than $7.5 million; seven years would be nearly $9 million.
A DGA insider said the matter might be headed toward litigation if Argentinean collection societies don’t start paying.
Of all the countries that pay out foreign levies, Germany is by far the biggest source of income for writers and directors. Since the program began in 1992, the country has paid the WGA more than $110 million, and the DGA has received a like amount. Altogether, Germany accounts for nearly half of all foreign levies received by the two guilds.
But even Germany fluctuates wildly from year to year in its payments, according to DGA annual financial reports filed with the Dept. of Labor. Here’s the breakdown on German payments since 2007.
2007: $15.2 million
2008: $6.2 million
2009: 8.8 million
2010: $6.9 million
2011: $8.4 million
2012: $7.3 million
2013: $7.3 million
2014: $7.9 million
2015: $5.2 million
2016: $3.3 million
2017: $12.9 million
Based on population, Japan — the only Asian country in the program — is the biggest piker. WGA records show that it’s only paid writers $771,514 since it started remitting levies in 2009. During the past nine years, that’s less than $86,000 a year – about as much as Slovakia pays — though Japan’s population (127 million) is 23 times larger than that country’s 5.5 million.
According to the WGA’s data, France is the second-largest payer of foreign levies. Here is a country-by-country breakdown of payments to the WGA – with similar amounts paid to the DGA.
France: $22.7 million
Spain: $19.1 million
Switzerland: $21.1 million
Argentina: $20.4 million
Italy: $9 million
UK: $5.3 million
Netherlands: $4.2 million
Austria: $4.2 million
Belgium: $4.1 million
Poland: $2.9 million
Hungary: $1.5 million
Sweden: $1.4 million
Czech Republic: $1.1 million
China doesn’t pay anything, and neither does Russia. The UK, Australia and Canada don’t pay either — though their writers and directors guilds remit payments to the US when they receive levies on movies and TV shows shot there that were written or directed by Americans. The DGA also transfers money the other way – to countries rightfully entitled to levies the guild received. Last year, for instance, it transferred $89,163 to collection societies in Canada, $62,488 to England, $33,482 to Australia, $10,325 to France and $9,544 to Italy. Over the years, numerous other countries have received these transfers from the DGA, as well.
The DGA and the WGA also donate a portion of the levies to industry charities. The DGA donated $136,968 to the MPTF last year. The WGA has donated $3.6 million to the Actors Fund since 2013.
Through March 31, 2017, the WGA has received $225.8 million in foreign levies worldwide – averaging $16 million a year over the past six years. As of last year, it’s distributed $193.2 million to writers — more than double the WGA West’s assets and seven times more than the guild received in membership dues last year. To run its program, the WGA takes an annual assessment fee ranging from $700-$900,000 a year. To date, the fees total $9.6 million. Read its annual collections and distributions here.
Keeping tabs on all this foreign money is not cheap. In 2008, for instance, the DGA spent $353,304 for professional fees related to the program, $25,105 for foreign levy systems, $21,279 on an audit, $64,964 in consulting fees, $12,422 for accounting services, $42,673 for professional services involving negotiations and $9,345 for advertising. Altogether, the DGA paid out $14.8 million to directors that year.
Foreign levies got their start in the 1980s when various European countries began to adopt laws imposing levies on blank videocassettes and recording equipment to compensate rights holders, including “authors,” of films and TV shows. Some countries also imposed levies on cable retransmissions and video rentals, which is why some pay so much more per capita than others. Under copyright regimes and related laws in these countries, film and TV directors are considered to be “authors” of motion pictures. Private collecting societies are authorized to collect, allocate and distribute the levies to the affected rights holders.
In the U.S., only the production companies are deemed the “authors” of their shows. The MPAA initially maintained that under U.S. copyright law – and the companies’ collective bargaining agreements with the guilds and the so-called “work for hire” clauses contained in personal service agreements – only the production companies were entitled to divvy up these foreign royalties.
The WGA West and the DGA, however, joined forces and challenged the companies, arguing that because the payments were mandated by foreign laws, the copyright laws of those countries – and their definitions of authorship – should prevail. After years of wrangling, the guilds and the companies settled their dispute and entered into an agreement on June 1, 1990, that provided for a 50%-25%-25% sharing of the foreign levies. Later this year, foreign levies paid to the U.S. will top $1 billion since the inception of the program.