WISCONSINREPORT.COM (01/08/08) - The Writers Guild of America and legendary United Artists Films have reached a mutually beneficial independent agreement. While the details have not been disclosed in the initial announcement, the comprehensive agreement addresses the issues important to writers, including New Media. As a result of this agreement, Writers Guild members will be able to work with United Artists while the strike against other companies continues.

The agreement is unique to United Artists Films and does not involve Metro-Goldwyn-Mayer Studios Inc. (MGM), a shareholder of United Artists Entertainment. It is the first agreement reached with a film company.

“United Artists has lived up to its name. UA and the Writers Guild came together and negotiated seriously. The end result is that we have a deal that will put people back to work,” said Patric M. Verrone, president of the Writers Guild of America, West.

“This agreement is important, unique, and makes good business sense for United Artists. In keeping with the philosophy of its original founders, artists who sought to create a studio in which artists and their creative visions could flourish, we are pleased to have reached an agreement with the WGA,” said UA co-owner and CEO Paula Wagner.

United Artists is now co-owned by Paula Wagner and Tom Cruise. The company has been legendary for its collaborative and cooperative relationships with writers and the talent community. United Artists is the first film studio to make an agreement with the Writers Guild. However, UA signed on the dotted line after David Letterman's television company had beaten them to the finish line to be first.

A Writers Guild spokesperson says the United Artists agreement is virtually identical to the agreement signed by David Letterman's Worldwide Pants. While UA was the first film company to sign, Worldwide Pants was the first television production company to agree to terms with the Writers Guild.

The UA agreement features all the proposals the Writers Guild was preparing to make when the conglomerates left the bargaining table a month ago. Those proposals include appropriate minimums and residuals for new media (whether streamed or downloaded, as well as original made-for content), along with basic cable and pay-TV increases, feature animation and reality TV coverage, union solidarity language, and important enforcement, auditing, and arbitration considerations.

The Writers Guild management expects this deal to encourage other companies, especially large employers, to seek and reach agreements. Writers Guild negotiators originally tried to reach an agreement with the Alliance of Motion Picture and Television Producers which was negotiating on behalf of a large number of member production companies. The two sides couldn't reach an amicable settlement, so, the Guild has been looking to make agreements with individual companies.

Writers Guild management is urging writer members to maintain picket lines and the pressure that it places on the conglomerates.

UA was first incorporated as a joint venture on February 5, 1919 by four of the leading figures in early Hollywood: Mary Pickford, Charles Chaplin, Douglas Fairbanks, and D. W. Griffith. Each held a 20% stake, with the remaining 20% held by lawyer William Gibbs McAdoo.

The idea for the venture originated with Fairbanks, Chaplin, Pickford, and cowboy star William S. Hart a year earlier as they were traveling around the U.S. selling Liberty bonds to help the World War I effort. Already veterans of Hollywood, the four film stars began to talk of forming their own company to better control their own work as well as their futures. They were spurred on by established Hollywood producers and distributors making moves to tighten their control on star salaries and creative control, a process which would evolve into the rigid studio system.

With the addition of Griffith, planning began, but Hart bowed out even before things had formalized. When he heard about their scheme, Richard A. Rowland, head of Metro Pictures, is said to have observed, "The inmates are taking over the asylum." The four partners, with advice from McAdoo (son-in-law and former Treasury Secretary of then-President Woodrow Wilson), formed their distribution company, with Hiram Abrams as its first managing director.

The original terms called for Pickford, Fairbanks, Griffith and Chaplin to independently produce five pictures each year. But by the time the company got under way in 1920-1921, feature films were becoming more expensive and more polished, and running times had settled at around ninety minutes (or eight reels). It was believed that no one, no matter how popular, could produce and star in five quality feature films a year.

By 1924, by which time Hart and Griffith had dropped out, the company was facing a crisis: either bring in others to help support a costly distribution system or concede defeat. The veteran producer Joseph Schenck was hired as president. Not only had he been producing pictures for a decade, but he brought along commitments for films starring his wife, Norma Talmadge, his sister-in-law, Constance Talmadge, and his brother-in-law, Buster Keaton.

Contracts were signed with a number of independent producers, especially Samuel Goldwyn, Alexander Korda and Howard Hughes. Schenck also formed a separate partnership with Pickford and Chaplin to buy and build theaters under the United Artists name.

Still, even with a broadening of the company, UA struggled. The coming of sound ended the careers of Pickford and Fairbanks. Chaplin, rich enough to do what he pleased, worked only occasionally. Schenck resigned in 1933 to organize a new company with Darryl F. Zanuck, Twentieth Century Pictures, which soon provided four pictures a year to UA's schedule.

Schenck was replaced as president by sales manager Al Lichtman who himself resigned after only a few months. Pickford herself produced a few films, and at various times Goldwyn, Korda, Walt Disney, Walter Wanger, and David O. Selznick were made "producing partners" (i.e., sharing in the profits), but ownership still rested with the founders.

As the years passed and the dynamics of the business changed, these "producing partners" drifted away, Goldwyn and Disney to RKO, Wanger to Universal Pictures, Selznick to retirement. By the late 1940s, United Artists had virtually ceased to exist as either a producer or distributor.

The "new" United Artists was formed in November 2006 under a partnership between producer/actor Tom Cruise and his production partner, Paula Wagner, and Metro-Goldwyn-Mayer Studios Inc., an MGM company.

Cruise and Wagner own a small stake in the studio, a subsidiary of MGM Studios. MGM is owned by MGM Holdings, Inc., which was formed by a consortium including Sony, Comcast, TPG Capital, L.P. and Providence Equity Partners.