DGA reaches tentative deal with AMPTP

In the first dramatic stroke toward ending the writers strike, the DGA’s reached a three-year deal with the AMPTP that offers key advances in jurisdiction and payment for programming on the Internet.

The deal, announced Thursday afternoon, capped six days of talks and opened the door for the Writers Guild of America to reach a similar pact. Minutes after the DGA deal was announced, the moguls asked WGA leaders to start informal talks that could lead to the end of the strike — noting that such informal talks had helped lead to a deal with directors.

“We hope that this agreement with DGA will signal the beginning of the end of this extremely difficult period for our industry,” the moguls said. “Today we invite the WGA to engage with us in a series of informal discussions similar to the productive process that led us to a deal with the DGA to determine whether there is a reasonable basis for returning to formal bargaining.”

The move by the moguls may also smooth the path to a WGA deal by creating a de facto set of negotiations under which the major points would be hammered out before a return to formal bargaining with the AMPTP. Such a step could heighten chances for a WGA deal given the hostility that dominated last year’s negotiations.

Even before the Directors Guild deal was announced, the town’s focus had shifted to whether its gains would be enough to satisfy the WGA — which departed from its usual fiery rhetoric in its first statement reacting to the pact while still grousing that the AMPTP ditched negotiations six weeks ago.

Execs on both sides expressed only muted hope that the WGA will accept the DGA deal terms, with even optimists guessing it may take two to three weeks. And it remains an open question whether the WGA can reach a deal in time for a picket-free Oscarcast on Feb. 24.

WGA West president Patric Verrone told Daily Variety that it’s crucial the guild closely examine terms of the DGA deal before responding to the moguls invitation to return to bargaining.

Verrone acknowledged that the development will have a major impact on the 10,500 WGA members who have been on strike for 11 weeks.

“We need to assess how this impacts our members,” he added. “The temperature of the members is obviously going to be changed by the DGA deal and the invitation to return to bargaining. I continue to believe that the members want a fair deal and want to get back to work.”

According to top talent reps, the DGA pact also will resonate significantly within SAG, with some predicting several top stars will lobby SAG leaders to assume a more moderate stance in relation to the major companies.

SAG — which has been staunchly supportive of the WGA throughout the strike — had a wait-and-see response Thursday. Its contract expires June 30, and studios have amped feature production as a hedge against a possible actors strike.

“We are interested in thoroughly reviewing and carefully analyzing the terms of the DGA’s tentative agreement with the AMPTP. Thus far, all we have is a press release. We look forward to seeing more specifics. Now is the time for the AMPTP to return to the bargaining table they left, and negotiate a new deal with the WGA that provides for fair compensation for writers,” SAG said.

Even before the DGA deal announcement, strike-weary showrunners and screenwriters were pressuring Verrone and his allies to accept the DGA deal and back off the issues of jurisdiction over reality and animation and of sympathy strikes. But it’s far from certain the scribe leaders will follow that path given the WGA’s long history of cool relations with the DGA plus the emotional investment in a strike singular for its animosity.

The WGA’s talks collapsed Dec. 7 after the AMPTP demanded that the writers remove six proposals from the table. The WGA reiterated Thursday that it views the stalled talks as the congloms’ fault, urging them to return to the table and “bargain in good faith.”

“They have chosen to negotiate with the DGA instead,” the WGA said. “Now that those negotiations are completed, the AMPTP must return to the process of bargaining with the WGA. We hope that the DGA’s tentative agreement will be a step forward in our effort to negotiate an agreement that is in the best interests of all writers.”

The DGA deal contains new-media gains that significantly improve upon what was being offered the WGA when the scribe talks imploded six weeks ago. And the DGA touted its agreement Thursday as a breakthrough.

“Two words describe this agreement — groundbreaking and substantial,” said Gil Cates, chair of the DGA’s negotiations committee. “The gains in this contract for directors and their teams are extraordinary — and there are no rollbacks of any kind.”

The DGA deal came amid widespread expectations that the helmers would quickly reach an agreement with the majors. Accord, if ratified by the 13,500 DGA members, will take effect July 1.

The DGA, which will send the pact to members for ratifications after its Jan. 26 board meeting, highlighted a trio of new-media gains:

  • Establishing DGA jurisdiction over programs produced for distribution on the Internet;

  • Boosting the residuals formula for paid Internet downloads (electronic sell-through) by double the current rate;

  • Establishing residual rates for ad-supported streaming and use of clips on the Internet.

In addition, the language on electronic sell-through spells out that payments are based on “distributors’ gross.” According to Cates, that represents a particularly crucial advance for the DGA that’s designed to preclude any attempt to mask actual revenues.

DGA leaders also stressed the pact’s provisions for transparency via heightened access to the congloms’ data. And, in a nod to the uncertainty of the new-media landscape, both sides noted that the deal sunsets in three years.

Company execs noted Thursday they were comfortable making compromises on new-media issues — which had been logjams in the WGA negotiations — because the DGA was clear on defining revenue sources and how the information would be shared.

One exec noted that both sides wrapped up the new-media points a few days ago, but they kept going over and rehashing them to make sure everyone was comfortable with the terms and that there were no surprises.

And, most crucially, insiders said the moguls see the DGA pact as the template for WGA and SAG deals. The DGA terms won’t be put forward in “take it or leave it” fashion, but the CEOs have indicated they’re not going to “stray” too much from the pact.

Talks, launched Saturday, were led on the directors’ side by Cates and DGA national exec director Jay D. Roth. The key informal talks — which laid the groundwork for the deal — took place in recent weeks with Fox topper Peter Chernin and Disney chief Robert Iger.

“This was a very difficult negotiation that required real give and take on both sides,” said DGA president Michael Apted in a statement. “Nonetheless, we managed to produce an agreement that enshrines the two fundamental principles we regard as absolutely crucial to any employment and compensation agreement in this digital age: First, jurisdiction is essential. Without secure jurisdiction over new-media production — both derivative and original — compensation formulas are meaningless. Second, the Internet is not free. We must receive fair compensation for the use and reuse of our work on the Internet, whether it was originally created for other media platforms or expressly for online distribution.”

AMPTP prexy Nick Counter praised the pact, indicating that the DGA had come to the table without peripheral issues.

“Of the 307 labor agreements the AMPTP has negotiated since 1982, this new DGA-AMPTP pact surely dealt with some of the most challenging issues we’ve ever faced,” he said. “The formal negotiations that led to this agreement were preceded by weeks of tough and candid informal discussions. In the end, though, both parties were determined to focus on the core issues that are most important to all of us, and the result is an agreement that breaks important new ground for our entire industry.”

The Assn. of Talent Agents — which had served as a conduit for restarting the last round of WGA talks in late November — also praised the deal.

“This creative and innovative approach to new media would not have been possible absent WGA’s fierce and determined effort to bring these critical issues to the bargaining table,” the ATA said. “Today’s tentative agreement creates positive momentum for progress in the writers’ negotiations. While the WGA will have to evaluate this agreement in light of its own needs, ATA is very hopeful it will be the breakthrough that gets our industry back to work.”

The DGA deal also opens the door for AFTRA to launch its delayed network code negotiations. AFTRA prexy Roberta Reardon delivered the first official reaction to the deal and said the net code talks will start by Feb. 19.

“AFTRA is encouraged by the news that the DGA has reached a deal with the AMPTP,” she said. “We have yet to have an opportunity to review the specifics of their deal, but we remain optimistic that the Writers Guild will soon resume negotiations with the studios so people can return to work. AFTRA’s priority is to negotiate strong wages, residuals, benefits and working conditions for talent in all TV dayparts and formats, and we intend to resume our own negotiations with the networks and major producers for the network code on or before Feb. 19.”

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