The major Hollywood studios will pitch in $320 million to sustain the health fund of the Writers Guild of America, the union told its members Wednesday.
Under a tentative contract recently negotiated by the union, TV and film writers would pay more for their healthcare but, in return, the studios would pay a record $321 million into the health plan — by far the highest level to date, the WGA said.
In a message to its members Wednesday night, the union’s leaders said the agreement also includes higher residual rates — including a provision for a “success bonus” for the most popular streaming shows from 50% of the base residual to 75% — and language on the licensing of work for AI training.
Additionally, the contract terms have been extended from the WGA’s usual three years to four. The current contract expires May 1.
“We are proud of what we achieved in this negotiation, made possible by your support,” said WGA’s negotiating committee in a statement to members. “Our most significant accomplishment was restoring our health plan to a sustainable path after facing severe pressure from industry contraction and runaway healthcare cost inflation.”
Negotiations between the union and the Alliance of Motion Picture and Television Producers began in March. The pending contract was first approved last weekend and the boards of WGA East and West approved the deal on Tuesday. It will be sent to its members for ratification next week.
As part of the healthcare funding boost, the union secured increases in the caps that companies contribute to the union’s healthcare plan to as high as $400,000 by 2028.
Union officials say the current cap has remained unchanged for two decades as healthcare contributions have steadily declined due to fewer working writers.
Under the new contract, members would for the first time have to start contributing to their healthcare costs to the tune of $75 a month. The earnings threshold to get coverage would increase about $7,000 to $53,773.
Members would also see increases in both foreign and domestic high-budget streaming residuals by 2.5% for projects starting in May 2027, and by another 2.5% in May 2029.
For foreign projects on subscription streaming services with more than 75 million foreign subscribers, including Netflix, Amazon and Disney+, residuals will increase by 6% in the first contract year.
Overall, minimum payments for most writers will increase by 1.5% in the first year of the contract and 3% in the following years.
The union’s leaders entered negotiations with the hopes of securing compensation for AI training based on copyrighted material.
Instead, the WGA was able to expand access to AI information and require mandatory meetings if companies that develop artificial intelligence technology hope to license writers’ work to train generative AI systems.
WGA is the first of the Hollywood unions to reach a tentative deal. SAG-AFTRA and the Directors Guild of America still need to negotiate new contracts.
The actors’ union began negotiations with the studios in February and extended those talks in March, but paused to allow the AMPTP to finish negotiations with the writers’ union. SAG-AFTRA’s and DGA’s contracts expire June 30.