Members of the Directors Guild have voted by an overwhelming margin to ratify a new three-year film and TV contract that includes big gains in residuals for members working on top-tier subscription video-on-demand shows. The new deal was approved unanimously last month by the DGA’s national board of directors, but the guild’s didn’t release the vote of the membership, other than to say it was approved “overwhelmingly.”
The contract establishes a new residuals formula that takes into account substantial subscriber growth in order to compensate members working on original content for established streaming services. According to the guild, it “more than triples residuals for members working on original content in the highest subscriber tier, while also allowing new and emerging entrants to the market the opportunity to grow as they develop their services.”
Under the old contract, three years of reuse of original content on a high-subscriber SVOD platform would yield less than $15,000 in residuals, whereas under the new pact, that same three years of reuses more than triples to $50,000. “That’s a real, measurable and meaningful increase that goes a long way toward addressing how people make and consume television content these days,” said Michael Apted, co-chair of the DGA negotiating committee.
“Our major gains in SVOD residuals, together with our improvements in wages and pensions, were the result of our forward-thinking preparation,” said DGA president Paris Barclay. “With the groundwork already laid in previous negotiations, this new contract embodies what we knew was possible when we established our first New Media agreement nearly a decade ago.”
“This is a ground-breaking, important deal, said Thomas Schlamme, the negotiating committee’s other co-chair.
This was the last film and TV contract negotiation for DGA national executive director Jay Roth, who led the guild’s talks with management’s AMPTP but will be retiring later this spring. Calling it a “forward-looking” contract, he said that the guild began laying the groundwork for it nearly 10 years ago “as the course of the industry began to shift – technologically and globally.”
The new deal, which calls for wages increases of 2.5% in the first year of the contract and 3% pay hikes in the second and third years, also establishes, for the first time, residuals payments for related foreign SVOD services; significantly increases the residuals for high-budget feature-length projects; and establishes, also for the first time, a share of the made-for-high-budget SVOD residuals for unit production managers and assistant directors.
And to further secure the long term viability of the guild’s pension plan, the employer contribution rate will increase by one-half percent in the first year of the agreement from — from 5.5% to 6% — and the guild will have the right to allocate up to 0.5% of the negotiated increases in salary rates in the second and third years of the agreement to either the guild’s pension plan or its health plan.
The new deal also establishes, for the first time, residuals on high-budget basic cable variety programs; increases the residuals formula for the reuse of television programs on ad-supported free streaming services, and addresses the lack of opportunities for those who aspire to become career directors by seeking to curb what the guild calls “the practice of gifting limited first-time directing opportunities to individuals who are not serious about a career in directing.” The guild said the new agreement also includes provisions addressing safety and improvements in creative rights.
And for better or worse, the new pact, which takes effect July 1, sets the pattern of bargaining for the WGA and SAG-AFTRA as they prepare for their own upcoming film and TV talks with the AMPTP.