July 15, 1998
In response to the changing economics of low budget filmmaking, the Directors Guild of America has unveiled its new Low Budget Sideletter to the DGA Basic Agreement of 1996, DGA President Jack Shea announced today. The new Low Budget Agreement (LBA) is effective immediately.
"The Low Budget Agreement is a cornerstone of our outreach to new directors," Shea said. "The LBA, along with our film festival sponsorships and participation, shows young filmmakers the advantages of a DGA membership in helping them realize their creative visions."
The DGA’s new Low Budget Agreement covers films made for up to $6 million. The Agreement is structured in four tiers: films produced for less than $1.2 million; films with budgets greater than $1.2 million and less than $2.5 million; films made for more than $2.5 million but less than $3.5 million; and films produced for more than $3.5 million but less than $6 million. Previous LBAs capped out at $5 million.
The new LBA seeks to make it easier for employers to work with the DGA. For example, under previous LBAs, if a film was not distributed theatrically, but instead was exhibited on pay or free television first, all provisions of the LBA were automatically rescinded, and the employer had to pay the difference in salaries between the LBA and the applicable sections of the Basic Agreement. The new LBA removes these penalties, as long as the employer engages in provable best efforts to distribute the film theatrically.
"We were way ahead of the curve on this type of agreement," said DGA Assistant Executive Director Bryan Unger. "Our new Low Budget Agreement is even more flexible than our previous ones, particularly at the lowest tiers. We think the new LBA is a good deal for producers and our members, as well as a great way to bring new directors into the family."
In addition to raising the cap to $6 million, the new LBA offers a variety of incentives to both filmmakers and producers:
In the under $1.2 million tier, Guild minimums are waived, and employers are free to negotiate salaries and compensations with all members of the directing team. In addition, the DGA will make appropriate accommodations in its initiation fees and the Basic Agreement mandatory ten week period for the accomplishment of the Director’s Cut is reduced to six weeks. Further, all Qualification List requirements for Assistant Directors (ADs) and Unit Production Managers (UPMs) are waived.
In the $1.2 million to $2.5 million tier, the director’s salary is subject to negotiation with the employer, ADs and UPMs must be paid no less than 50% of the minimum weekly salaries set forth in the Basic Agreement and six weeks must be allowed for a Director’s Cut. If the employer is unable to find UPMs or ADs on the Qualification Lists who will accept employment under these conditions, the employer may hire one UPM or AD who is not on the Qualification Lists.
In the $2.5 million to $3.5 million tier, directors and their team members may be paid discounted initial salaries equal to 60% of the applicable minimum salaries set forth in the Basic Agreement. An additional 65% of the applicable minimum salaries must be paid when, if at all, the film reaches the break even point. Eight weeks must be allotted for the Director’s Cut.
In the $3.5 million to $6.0 million tier, directors and their team members may be paid discounted initial salaries equal to 70% of the applicable minimum salaries set forth in the Basic Agreement. An additional 55% of the applicable minimum salaries must be paid when, if at all, the film reaches the break even point.
Filmmakers or employers who would like more information on the DGA’s Low Budget Agreement should contact Bryan Unger in Los Angeles at 310-289-5330, Elizabeth Stanley in Los Angeles at 310-289-5382, Terry Casaletta in New York at 212-581-0370 or Dan Moore in Chicago at 312-644-5050.