Residuals for Made-for-Pay Television and Made-for-Videocassette Projects

Residuals for reuse on pay television or videocassette.

Residuals for made-for-pay television or made-for-videocassette projects can be both revenue based and fixed.

Residuals on programs on which the writer’s services commenced prior to May 2, 1998.

For programs on which the writer’s services commenced prior to May 2, 1998, the residuals due for reuse on pay television and videocassette are calculated as 2% of the Company’s combined pay television and videocassette receipts that exceed the applicable break amount. The "break amount" is a negotiated amount defined in the MBA.

Your initial compensation covers salary and runs on the pay television services, as well as videocassette/videodisc sales until the Company’s receipts exceed the break amount. Thereafter, the residual is calculated at 2% of the Company’s combined receipts for pay television and videocassette.

Residuals on programs on which the writer’s services commenced on or after May 2, 1998.

In the 1998 MBA, a new residuals formula was established for long form (90 minutes or longer) made-for-pay television programs of a type generally produced for prime time (e.g., RKO 281) on which writing services commenced on or after May 2, 1998 and prior to May 2, 2001. The break amount no longer applies and you are entitled to a percentage of the Company’s pay television receipts after a set period of time and/or videocassette receipts after a certain number of sales. For other made-for-pay television projects and made-for-videocassette projects, the break amount was reduced by 30%. Under the 1998 MBA, residuals are payable as follows:

Residuals are due within 60 days of the end of the quarter in which gross receipts are received by the Company.

Residuals on dramatic programs made for pay television on which the writer’s services commenced on or after May 2, 2001.

For dramatic programs of a type generally produced for network prime time, including long form, (e.g. Sex and the City, The Sopranos, and Introducing Dorothy Dandridge), the residual for reuse on pay television is triggered by the earliest of 10 exhibition days or one year from the date of the initial exhibition of the program. Thereafter, for each of the next three exhibition years, the credited writer(s) will receive an aggregate residual payment as follows:

For each of the fifth and subsequent exhibition years on that pay television service, the credited writer(s) will receive an aggregate residual payment as follows:

Residuals are due within four months of the first exhibition day of the year in question.

For reuse of such programs on foreign pay television or a subsequent U.S. pay television service, a residual of 2% of receipts after the reduced break amount is due.

For reuse of such programs on videocassette, a residual of 2% of the videocassette receipts after the sale of 100,000 units is due.

For other made-for-pay television programs and for made-for-videocassette programs, a residual of 2% of receipts after the reduced break amount is due for reuse on pay television and videocassette.

Residuals are due within 60 days of the end of the quarter in which gross receipts are received by the Company.

If your product is released in markets other than pay television or videocassette, the following residuals are due: