Directors Guild of America Board OKs New Contract, Triggering Member Vote

Wage increases of 2.5% in first year, 3% in second and third

Image courtesy of the Directors Guild of America

Showing typical solidarity, the Directors Guild of America’s national board has unanimously approved a three-year successor deal to its master contract — triggering a ratification vote by the 15,000 DGA members.

The new deal contains sweeter terms than the current three-year pact on wage minimums, pension contributions and subscription video on demand (SVOD).

The board vote came Saturday, a day after DGA negotiators reached a tentative deal with the Alliance of Motion Picture and Television Producers following two and a half weeks of contract talks.

If approved by members, the new deal will go into effect July 1 — a near-certainty, given that the DGA leaders’ actions generally do not generate any significant dissent from members. Saturday’s announcement included the first disclosure of specifics of the successor deal.

Key points of the deal call for wage increases of 2.5% the first year and 3% for the second and third years; a  0.5% increase in the pension plan with the DGA able to divert that increase to wages in the first year if it chooses; residuals will also increase 2.5% the first year and go up 3% in the second and third years except for network primetime, which will increase by 2% each year.

The tentative pact also includes — for the first time — specific wages, terms and conditions for “high-budget” original and derivative dramatic new media productions made for SVOD. Additionally, the free streaming window for TV programs has been reduced to seven days after the first seven episodes of a new series.

For services with more than 15 million subscribers, original and derivative new media productions above a specified budget level will receive network prime-time rates and conditions while basic cable rates will apply to lower-budget shows. Thomas Schlamme, co-chief of the negotiating committee, touted that aspect of the deal.

“What we have established in new media, advances for the first time minimum wages, terms and conditions for high budget original and derivative dramatic new media productions made for subscription video on demand,” he said. “This new agreement ensures that as premium programming continues to be developed for streaming video services, the creative and economic rights of directors and their teams are protected with similar terms and conditions in network, pay television and basic cable.”

Currently, the free streaming window is 24 days for series in first season and 17 days thereafter. Those terms were established by the 2008 deal worked out by the DGA during the final weeks of the Writers Guild of America strike.

VOD residual rates will increase to 4% in the first year, 4.5% in the second year and 5% in the third year of the agreement for programs exhibited during the first year following the free streaming window. After that first-year period, residuals will be paid at 2%.

The DGA deal also requires major TV studios to maintain or establish a program designed to expand opportunities for directors in episodic television with an emphasis on increasing diversity.

The DGA terms are crucial for Hollywood’s other two major unions —SAG-AFTRA and the WGA — because they have not yet locked in a start date for negotiations for their successor deals to master contracts covering features and primetime TV. The WGA deal expires May 1 and the SAG-AFTRA deal runs out June 30.

The AMPTP, which serves as the negotiating arm for the industry’s production companies, will come to the bargaining table with the assertion that the DGA’s new pact should also serve as the template for the successor deals for performers and writers.

The new terms represent improvements over the DGA’s current three-year pact — negotiated at the end of 2010 – which contains a 2% annual wage hike and a boost to 15.5% from 14% in pension and health contributions. Under the new DGA deal, the employer contribution to pension and health will be hiked to 16%.

The DGA has tended to be the first of the major Hollywood unions to reach a deal on its master contract with the congloms during each negotiating cycle, though SAG went first during the 2010 cycle. Both SAG and the DGA then reached a deal before the end of 2011 — more than six months before the master contracts expired.

The last round of negotiations in 2010-11 with the AMPTP was completed largely under the radar and without controversy. In all three successor contracts, the key gains were a 2% hike in minimums and a 1.5% increase in employer contributions to the pension and health plans.

DGA leaders have long backed the strategy of negotiating well before expiration as a method for extracting the best terms from the AMPTP with a “premium” in exchange for the guarantee of labor peace.

The DGA board met Saturday morning to approve the tentative deal at DGA headquarters in Hollywood. President Paris Barclay praised his fellow members.

“A deal like this doesn’t happen by wishful thinking,” Barclay said. “It accomplishes our most important objectives thanks to the leadership and wisdom of Negotiations Co-Chairs Michael Apted and Thomas Schlamme and National Executive Director Jay Roth. And our Negotiations Committee, made up of more than 65 members, was extraordinarily dedicated, and the DGA staff worked tirelessly for months to support this work – well before the first day of official negotiations.”