Directors Guild Board Approves New Studio Deal

Hollywood sign
ROBYN BECK/AFP via Getty Images

Hollywood sign

The union achieved a substantial increase in SVOD residuals.

The Directors Guild of America’s board of directors unanimously approved a new three-year agreement reached several days earlier with the Alliance of Motion Picture and Television producers, the DGA announced Saturday.

The new pact features what the union described as "a nearly 50 percent increase in residuals" for work on streaming video platforms such as Netflix and Disney+, as well as healthy compensation gains that effectively equal or exceed three percent per year.

The tentative deal now goes to the union’s membership for ratification, which is also expected. The current contract expires June 30.

"The future is what drives us, and that’s what you see in this agreement," said DGA president Thomas Schlamme. "As the streaming sea change we anticipated for so long is now overhauling the industry, and new services continue to enter the market, this pivotal deal boosting streaming residuals beyond traditional TV levels is a major victory for our members thanks to our Negotiations Co-Chairs Jon Avnet and Todd Holland, and our fearless chief negotiator National Executive Director Russ Hollander."

Under the new residuals formulas, which were not disclosed, the DGA said a 60-minute show on a platform with many subscribers would earn a $73,000 residual over three years, up nearly fivefold from 2016.

The new deal also brings lower-budget SVOD series under the terms of the new contract, including its residuals provisions. Meanwhile, basic wage increases are 2.5 percent in the first year (plus a one percent increase in pension contributions) and 3 percent in each of the following two years. The residual bases — figures used to determine some of the residuals — increased by the same amount. The union also achieved improvements in creative rights, and agreement to meetings and a committee regarding diversity and inclusion.