This time around in the DGA’s contract negotiations with the majors, concerns about new media and future earnings potential are taking a backseat to present-day bread-and-butter issues. A key focus of the guild’s negotiating platform will be shoring up the financials of the guild’s pension and health plans.
Gil Cates, who is heading the DGA’s negotiating committee for the fourth consecutive round of contract negotiations, has made it clear that the guild will be focusing on securing an increase in the contributions from employers to the pension and health plans.
Like other union benefit plans, the DGA’s plans have been battered in recent years by the twin blows of stock market declines and sharply rising health care costs.
During the 2007 and 2008 round of contract negotiations, the emphasis on carving new templates for compensating directors, writers and actors for new media exploitation of their work added exponentially to the complexity of the negotiations for all guilds — and to the tension among labor and management, which boiled over into the 100-day writers strike.
Cates and other DGA negotiators were instrumental in eventually wrangling agreements on new media compensation formulas with the majors, though the specter of a renewed showdown has lingered ever since the current contracts were inked by WGA, SAG and to a lesser extent, DGA.
In preparation for the DGA talks that are expected to begin in November, Cates noted that employers haven’t increased their contribution to the DGA plans since 2005 while benefits have been tightened.
“We’ve been responsible stewards of the plan and we’ve made some benefit changes and taken other measures to keep the plan solvent,” Cates said in a Q&A published in the October edition of the DGA’s monthly magazine. “But the situation is unsustainable and we think it’s time for the companies to shoulder their share of the burden.”
The guidance echoed what Cates had told members a month ago — that the DGA pension and health plans would be a top priority at upcoming contract negotiations with the Alliance of Motion Picture & Television Producers. The DGA’s scheduled to begin its negotiations following seven weeks of AMPTP contract talks by the Screen Actors Guild and the American Federation of Television & Radio Artists, which start next week amid expectations that pension and health will be a major focus of the performer unions proposals. (AMPTP and SAG-AFTRA reps met on Monday for a get-to-know-you luncheon.)
The DGA, SAG and AFTRA master contracts all expire on June 30. Employers’ contributions to union pension and health plans are calculated as a percentage of the total compensation paid to members of that union for the year. For the DGA, employers contribute an additional 14% of the total compensation paid to directors to the DGA plans — 8.5% to health and 5.5% to pension. for the DGA. The WGA receives 14.5% (8.5% health, 6% pension), while SAG receives 15% (9.25% health, 5.75% pension) as does AFTRA (9.75% health, 5.25% pension). Those plans are operated separately from the unions, and are overseen by a board comprised of reps from the studios and the unions.
Cates said that in addition to pension and health, those talks will cover rates, residuals, basic cable, new media and diversity. But for all the drama that enveloped the previous contract and the battle for residuals on web streaming and download-on-demand the previous contracts, new media has yet to yield a windfall for creatives, Cates noted.
“For all the talk about new platforms and the new business models that supposedly will monetize them, the fact is that from a business point of view, new media remains an unsolved puzzle,” he said. “Because it so clearly plays a significant role in the future of our industry, it’s a major focus of our research and something that we’re watching closely. At the same time, however, it’s important to recognize that the vast majority of our members’ earnings still come from traditional media.”
However, that doesn’t mean the DGA will ignore the question of how alternative distribution systems are developing in its talks with Hollywood’s largest employers.
“Even though it was clear to us in our last negotiation that the ‘watershed’ moment (for new media) had not yet arrived, that didn’t mean we weren’t keenly aware that new media will one day provide a real and substantial revenue stream for our members,” he said. “That’s why we fought so hard to include in the new media provisions of the contract two fundamental principles critical to any employment agreement — compensation and jurisdiction. Our deal established these principles with respect to new media and created formulas for payment that are now in play not only for our members, but for our sister guilds as well.”
The WGA, which shares about 1,000 members with the DGA, still hasn’t set negotiations with the AMPTP in keeping with its strategy of negotiating with a far shorter period than the DGA before the contract expiration. The current WGA pact expires May 1.
“Each guild has a responsibility to do the best it can for its members and each guild develops its own strategy for how to achieve that,” Cates noted.
The message from Cates – posted Monday on the DGA web site — comes a week after the SAG-industry health plan announced it will be cutting benefits, hiking premiums and tightening eligibility next year. The SAG plan notified its 40,000 participants that it was facing a $30 million deficit this year with projections of a $50 million deficit next year (Daily Variety, Sept. 14).