March 7, 2020
Significant Gains Made in Streaming Residuals, Pension, Wages, and TV Creative Rights
LOS ANGELES – Directors Guild of America President Thomas Schlamme 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.
"The future is what drives us, and that's what you see in this agreement. As the streaming sea change we anticipated for so long is now overhauling the industry, and new services continue to enter the market, this pivotal deal boosting streaming residuals beyond traditional TV levels is a major victory for our members thanks to our Negotiations Co-Chairs Jon Avnet and Todd Holland, and our fearless chief negotiator National Executive Director Russ Hollander," said Schlamme. "This was an incredibly complex negotiation, but we were well prepared thanks to what we as directors do best: extensive planning, research and preparation. Our over 80-member Negotiations Committee and our professional DGA staff synthesized massive amounts of data, analysis and member feedback to make these substantial gains a reality."
As streaming continues to overtake other forms of distribution and expand in scope, the DGA's negotiations priorities were again focused squarely on SVOD. Just since 2016, the number of made-for-SVOD episodes has nearly doubled, and that's before taking into account the new wave of major streaming services being launched including Disney+, HBO Max, Apple TV+, and Peacock.
Highlights of the new agreement include:
- Made-For-SVOD:
- A nearly 50% increase in residuals for members working on original SVOD series, bringing the three-year residual for a 60-minute series on the highest subscriber SVOD services to more than $73,000. To put the accomplishment in perspective, when combined with the gains from the 2017 agreement, the residual is up nearly fivefold from under $15,000 in 2016, and exceeds the average residuals earned from all markets for the most popular network series.
- Lower budget made-for-SVOD series will now also be captured under the new contract – expanding the scope of coverage to many more series and ensuring the vast majority of members working in this space benefit from DGA-negotiated terms, residuals and creative rights.
- Elimination of "grandfathering" by which series that began production during a prior contract continued to be governed by the terms of that prior contract, even in subsequent seasons. Under the new agreement, grandfathering will be eliminated, enabling more members working on SVOD series to benefit from the newly negotiated terms.
- Wages and Residual Bases:
- General wage and residual base increases of 2.5% in the first year of the agreement and 3% in the second and third years of the agreement.
- Increase in Employer Contributions to Pension Plan:
- Increased funding for the DGA-Producer Pension Plan. Even though it is the best-funded in the industry, the Guild sought to further secure the Plan from potential downturns in the market.
- The Employer contribution rate to the Pension Plan will permanently increase by one percent (1%) in the first year of the agreement from 7% to 8%.
- The DGA will also have the right to allocate up to .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.
- Increases in the caps upon which pension contributions are made.
- TV Director Creative Rights:
- Gains to address the continuing and growing problem of late scripts – which result in reduced prep time, and negatively impact a director's ability to deliver the most compelling episode possible on time and on budget.
- The creative rights negotiation also made progress in restricting electronic transmissions from set, securing additional cutting time for directors of pilots and first episodes of series without pilots, and protecting the director's right to participate fully in the casting process.
- Theatrical Feature Film Director Diversity and Inclusion:
- Building on the success of the DGA's past contractual gains in episodic television director diversity and inclusion, the Guild succeeded in securing commitment from the major theatrical feature film studios to:
- Designate senior creative executives to meet with the DGA twice yearly on a company-by-company basis to discuss ongoing efforts to develop and expand theatrical feature film directing opportunities for individuals from underrepresented groups.
- Establish a Joint Diversity and Inclusion Action Committee to discuss strategies and best practices to increase directorial opportunities for under-represented groups. The committee will consist of representatives from the DGA and the major theatrical studios including senior level executives.
- Term:
- The term of the agreement is three years, July 1, 2020 – June 30, 2023.
The new agreement also includes a number of other improvements related to SVOD features, non-dramatic programs, and safety.
"What we accomplished in streaming cannot be overstated. With the continued spike in streaming production, this deal further entrenches our members' ability to share in the success of their work, increasing residuals by nearly 50% to more than $73,000 for three years of exhibition," added Avnet. "And with the elimination of grandfathering, our members working on existing series will also benefit. It wasn't easy, but we had over 80 sets of hands in the negotiating room to push that daunting boulder out of our path. Our members are in prime position for the future."
"We have reached an outstanding deal for our members, and for the industry. Together with these impressive gains in SVOD residuals, we broke through the impenetrable 3% ceiling in our economic package in the first year of the agreement, attaining strong wage gains while also achieving another major priority: securing our members' retirement plans well into the future," said Holland. "Additionally, we made strong advances in TV director creative rights and attained the near impossible on theatrical feature film director inclusion after many years of pushing employers to budge on the issue. This is the start of a new day."
"The issues we dealt with in this negotiation were complicated and intense," said Hollander. "But in the end we came out on the other side with significant gains in SVOD, wages, pension and creative rights. This is a forward-looking agreement that will keep our members working and well protected for many years to come."
Formal negotiations with the Alliance of Motion Picture and Television Producers began on Monday, February 10, 2020 and concluded on March 4. Talks were led by Negotiations Committee Co-Chairs Jon Avnet and Todd Holland and the DGA's Chief Negotiator, National Executive Director Russell Hollander. Television Creative Rights Negotiations were Chaired by Paris Barclay and Matthew Penn.
Details of the new agreement were presented to the Guild's National Board for approval at a special board meeting on Saturday March 7, 2020. A ballot and ratification materials will next be sent to the DGA membership. The DGA's current contracts expire on June 30, 2020.