DGA Board Approves Three-Year Collective Bargaining Agreement

Directors Guild of America
DGA President Paris Barclay

The deal includes increases in wages and residuals, additional new media terms and conditions, and advances in diversity.

DGA president Paris Barclay announced Saturday that the DGA National Board voted unanimously to approve and recommend for ratification a new three-year collective bargaining agreement with the AMPTP, composed of the major studios and representing motion picture and television producers. The deal includes 3 percent wage increases and additional new media terms applicable to programs like Netflix’s House of Cards and Amazon’s Betas.

“A deal like this doesn’t happen by wishful thinking. 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,” said Barclay. “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.  I thank everybody involved for their commitment and devotion to achieving a great new contract.”

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Highlights of the new agreement:

* Wage increases: A 2.5 percent increase in the first year of the agreement and 3 percent in the second and third years of the agreement, with certain limited exceptions. Those figures contrast with 2 percent annual increases in the last contract negotiations (in 2010), and represent a de facto loosening of the studios’ cost control mantra.

* Increase in employer contributions to Pension Plan:  The Employer contribution rate to the Pension Plan will increase by 0.5 percent in the first year of the agreement.  The DGA has the option to divert this increase to salary, in which case the wage increases would increase by an additional 0.5 percent in the first year.

Residuals increases:  Mirroring the wage increase, residuals will increase 2.5 percent in the first year of the agreement and 3 percent in the second and third year of the agreement for all residuals bases other than network primetime, which will increase 2 percent in each year of the agreement.  This affects residuals that are calculated with reference to a residual base, which is generally residuals for television program reruns. Residuals for motion pictures are calculated based on gross receipts or license fees (light blue areas in this residuals chart) and are not affected by the increase in residual bases.

* Basic cable wages:  Out of pattern wage increases for directors employed on one-hour basic cable programs.

* SVOD new media – wages:  Established, 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 (SVOD) that exceed certain minimum budget thresholds. For SVOD services with more than 15 million subscribers, original and derivative dramatic new media productions above a second budget level will receive network primetime rates and conditions.  Productions below that second budget level will receive basic cable rates and conditions. For SVOD services with fewer than 15 million subscribers, original and derivative dramatic new media productions will receive basic cable terms and conditions. Below the minimum budget thresholds, rates and conditions will remain freely negotiable.

* SVOD new media – residuals: Residuals for high budget original and derivative dramatic new media productions made for SVOD will be paid as a percentage of the applicable network prime time residual base starting in the second year of exhibition.

* Ad-supported streaming and cable AVOD residuals: The free streaming window for television programs has been reduced to seven consecutive days for programs after the first seven episodes of a new series, including for cable ad-supported video on demand (AVOD). After the free streaming window, residual rates, which will now include payment for cable AVOD, will increase to 4 percent of the residual base in the first year of the agreement, 4.5 percent in the second year of the agreement, and 5 percent in the third year of the agreement for programs exhibited for each 26-week period during the one year period following the free streaming window.  (The current rate is 3.5 percent.) After the one year period, the Employer will pay residuals at the rate of 2 percent of Employer’s gross (unchanged from the current formula).

* Diversity:  Each of the major television studios has agreed to maintain or establish a Television Director Development Program designed to expand opportunities for directors in episodic television with an emphasis on increasing diversity. The deal also establishes an Industry-Wide Joint Diversity Action Committee which will meet at least once every four months.

* Term:  The term of the agreement is three years, July 1, 2014 – June 30, 2017.

* Other: The new agreement also includes provisions addressing improvements in theatrical and television creative rights, including the pseudonym process and the director’s role in casting; amended residual provisions to encourage sale of library product for second sales in basic cable and secondary digital networks; and compensation for table reads that fall outside of the guaranteed prep period.

Negotiations with the Alliance of Motion Picture and Television Producers lasted three weeks, beginning on Monday, November 4 and concluding on Friday, November 22.

“We have reached an excellent deal on behalf of DGA members and the industry,” announced Apted.  “With significant wage gains for our members, increases in residual bases, improvements in basic cable, and advances in the efforts to increase diversity in the industry – I am proud of our fine accomplishments over the last three weeks.”

“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,” stated Schlamme.  “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.”

“The issues we negotiated in this round were difficult, complex and not limited to one specific area as in previous negotiations where health and pension or jurisdiction in new media was a singular focus,” said Roth.  “In this round, we sought to protect the future by making significant advances that protect our members working in new media, and securing substantial wage gains to benefit our members working in all areas.  This is a very forward looking agreement.”

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