Runaway train could derail DGA talks

Guild opts for early negotiations with AMPTP

HOLLYWOOD — Hollywood’s next major negotiations won’t necessarily be a slam dunk.

The Directors Guild, citing the need to avoid protracted contract sagas like those played out on the SAG and WGA fronts earlier this year, has opted for early negotiations with the Alliance of Motion Picture & Television Producers. The guild, facing a June 30 expiration of its current three-year pact, will hold discussions soon to lay ground rules for formal contract talks.

That’s the easy part.

Even with the slimmed-down packages that are the hallmark of early talks, negotiations could cover extraordinarily difficult issues. Some believe the powerful helmers’ guild, in keeping with its can-do image, will seek ways to slow runaway production and hammer out specifics of coverage for projects made for digital delivery.

Some observers believe the DGA, already a longtime backer of legislative efforts on runaway production, may ask for some kind of study or a contract language commitment from companies.Neither the DGA nor AMPTP will comment officially beyond the Sept. 30 announcement of early talks.

“We think it is particularly important given the current events taking place throughout the country to make every reasonable effort to reach an early and fair deal — for our members and our industry,” said Gil Cates, who has been tapped as chief of the DGA’s negotiating team.

Insiders believe the guild’s strategy of ramping up early talks makes sense for several reasons:

  • The Sept. 11 terrorist attacks have kicked up uncertainty to unprecedented levels.

  • The economy, and the ad industry in particular, may be in even worse shape next year.

  • The DGA won’t gain much negotiating flexibility by waiting. Indeed, the AMPTP will still expect to fashion a deal on a par with those reached by the Writers Guild of America and Screen Actors Guild earlier this year.

Implicit in the AMPTP’s invitation to enter early negotiations is the understanding that studios and nets will not seek a rollback of fees or benefits from the 12,000 DGA members.

What’s uncertain is whether the DGA could be asked to counterbalance any contract gains with cuts in especially favorable areas of the contract, such as pay TV and rates for below-the-line members such as assistant directors. Companies may even be tempted to argue that the DGA’s success in negotiating past contracts has helped fuel runaway production by making use of foreign crews more attractive.

Here’s what the DGA and the AMPTP probably can agree on, based on what the WGA and SAG negotiated in their most recent contracts:

  • annual hikes in minimums of at least 3%.

  • an increase in residuals paid by the Fox Network from the current 66% of the Big Three to 100% by the third year of the new deal.

  • a removal of caps on foreign TV residuals, with additional payments once sales targets are met.

  • a reduction in residuals rates for syndicated programming that has not met specified distribution thresholds.

  • pension and health coverage for Internet work.

Insiders believe the selection of Cates, currently secretary-treasurer, makes sense because of his clout as a longtime DGA leader. Cates was prexy in 1987 during the DGA’s only strike, a work stoppage so effective that it lasted only a few hours before a settlement was reached.

Negotiations vet

Indeed, Cates’ experience is seen as a positive influence. Hollywood vets view him as able to effectively mix practicality and demonstrable resolve — attributes likely to be valuable in the current negotiating climate.

The AMPTP, too, is looking to balance a practical need to hedge its bets in the current economic uncertainty with a realistic view of the long term.

“It’s important in guild negotiations that you find a way not to just phone it in,” says one union vet. “But you also can’t pick fights that are hard to win.”

The DGA has opted for early talks in every negotiation since 1987 and reached a deal on its most recent deal in January 1999 — more than five months prior to the last contract’s expiration. So the practical side will probably outweigh any tendency to dig in — unless the current economic and political climate improves dramatically.

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