December 29, 2016
LOS ANGELES – Directors Guild of America President Paris Barclay today announced that the DGA National Board, in a special meeting, voted unanimously to approve and recommend for ratification a new three-year collective bargaining agreement.
“This excellent deal is the result of more than a year of research and preparation, and weeks of tough negotiations led by our Negotiations Co-Chairs Michael Apted and Thomas Schlamme, and our intrepid chief negotiator, National Executive Director Jay Roth,” said Barclay.
“Our 70-member strong Negotiations Committee and professional DGA staff set specific goals and worked together for months to help make this contract a reality. When it comes to our major gain, SVOD, our approach can best be summed up by the famous words of hockey great Wayne Gretzky: ‘Skate to where the puck is going. Not where it has been.’ Protecting our future is the goal of all our negotiations, and the end result is a stellar contract with substantial gains.”
Residuals for dramatic programs made for High Budget Subscription Video on Demand (SVOD) were a major focal point of the negotiations, highlights of the new agreement include:
- Made for High Budget SVOD Residuals:
- Establishes new subscriber tiers to account for substantial subscriber growth and appropriately compensate members working on original content for established SVOD services. The provision more than triples residuals for members working on original content in the highest subscriber tier, while also allowing new and emerging entrants to the market the opportunity to grow as they develop their services.
- Establishes, for the first time, residuals payments for related foreign SVOD services.
- Significantly increases the residuals for high budget feature-length projects.
- Establishes, for the first time, a share of the Made for High Budget SVOD residual for Unit Production Managers and Assistant Directors.
“Much like in 1981 with Pay TV, this is a groundbreaking, important deal – with SVOD now moving toward converging with the subscriber-based Pay TV formula established by the DGA. In the future we’ll look back and give thanks for the flag that the DGA planted in 2008 establishing jurisdiction in New Media,” said Schlamme. “And thanks to the foresight and wisdom of Jay and our Negotiations Chair predecessor Gil Cates, conditions allowing the medium to experiment and flourish were set in the nascence of the platform, and are now bearing fruit.”
“In addition to pension and wage increases, our new High Budget SVOD residuals formula is a tremendous gain,” said Apted. “Whereas three years of reuse of original content on a high-subscriber SVOD platform would yield less than $15,000 in our current formula, that same three years of reuse more than triples to $50,000 under this new contract. That’s a real, measurable, and meaningful increase that goes a long way toward addressing how people make and consume television content these days.”
Another major priority of the negotiation was to further secure the DGA-Producer Pension Plan, the best-funded retirement plan in the industry, against future unknowns such as market volatility.
- Increase in Employer Contributions to Pension Plan:
- The Employer contribution rate to the Pension Plan will permanently increase by one-half percent (.5%) in the first year of the agreement from 5.5% to 6%.
- The DGA will also have the right to allocate up to 0.5% of the negotiated increases in salary rates in the second and third years of the Agreement to either the Directors Guild of America-Producer Pension Plan or the Directors Guild of America-Producer Health Plan.
“After intense preparation, and a tough negotiation centered on complex issues, what we have achieved in high budget SVOD, together with significant pension and compensation gains, is historic in terms of setting the tracks deeper and wider for all our Guild’s members,” said Roth. “We began laying the groundwork nearly a decade ago as the course of the industry began to shift – technologically and globally – and today we’ve taken a huge leap forward in realizing that vision. I am proud of the work accomplished to protect the future through this forward-looking contract.”
The agreement also includes wage and residuals increases, as well as a provision addressing the lack of first-time Director opportunities for individuals seeking to become career Directors.
- Wages:
- Wage increases of 2.5% in the first year of the agreement and 3% in the second and third years of the agreement, with certain Director-category exceptions as well as an outsized wage gain for Directors employed on one-hour basic cable programs.
- Residuals:
- Increases in nearly all residuals bases:
Basic Cable
- Establishes, for the first time, residuals on basic cable high budget variety programs.
Theatrical Use
- Creates more opportunities for members’ work to be monetized and exhibited theatrically.
Ad-Supported Free Streaming
- Increases the residual formula for the reuse of television programs on Ad-Supported Free Streaming services.
- First Time TV Directors:
- Another focus of the DGA was to address the lack of opportunities for those who aspire to become career Directors by seeking to curb the practice of gifting limited first-time directing opportunities to individuals who are not serious about a career in directing. To address this concern, the DGA obtained a provision requiring all first-time dramatic television Directors who do not have prior directing experience – or who have not completed or enrolled in a studio-sponsored Television Director Development Program – to attend an orientation program provided by the DGA before their employment begins.
- Term:
- The term of the agreement is three years, July 1, 2017 – June 30, 2020.
The new agreement also includes provisions addressing safety, improvements in creative rights – including expanded rights of members when their work is shown theatrically as well as provisions addressing late scripts – and specific advances that pertain to UPMs, Assistant Directors, Associate Directors, Stage Managers and Production Associates.
Formal negotiations with the Alliance of Motion Picture and Television Producers began on Monday, December 5, 2016 and concluded three weeks later on Friday, December 23, 2016. Talks were led by Negotiations Committee Co-Chairs Michael Apted and Thomas Schlamme and the DGA’s chief negotiator, National Executive Director Jay D. Roth.
Details of the new agreement were presented to the Guild’s National Board for approval at a special board meeting on December 29, 2016. A ballot and ratifications materials will next be sent to the DGA membership. The DGA’s current contracts expire on June 30, 2017.