DGA Board Approves New Contract That Includes Big Gains in SVOD Residuals

DGA Awards Winners List

The DGA’s national board of directors unanimously approved the terms of a new three-year film and TV contract today. It includes wage increases of 2.5% in the first year of the agreement and 3% in the second and third years and a provision that more than triples the residuals for members working top-tier original subscription video–on-demand shows.


Calling it an “excellent deal,” DGA President Paris Barclay said: “When it comes to our major gain, SVOD, our approach can best be summed up by the famous words of hockey great Wayne Gretzky: ‘Skate to where the puck is going, not where it has been.’ Protecting our future is the goal of all our negotiations, and the end result is a stellar contract with substantial gains.”

The new pact, which now must be ratified by the guild’s membership, establishes new subscriber tiers to account for substantial subscriber growth and appropriately compensate members working on original content for established SVOD 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.”

The new deal 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.


“Much like in 1981 with pay TV, this is a groundbreaking, important deal – with SVOD now moving toward converging with the subscriber-based pay TV formula established by the DGA,” said Thomas Schlamme, the co-chair of the DGA’s negotiating committee. “In the future we’ll look back and give thanks for the flag that the DGA planted in 2008 establishing jurisdiction in New Media.”

Said negotiating committee co-chair Michael Apted: “In addition to pension and wage increases, our new high-budget SVOD residuals formula is a tremendous gain. Whereas three years of reuse of original content on a high-subscriber SVOD platform would yield less than $15,000 in our current formula, that same three years of reuse more than triples to $50,000 under this new contract. That’s a real, measurable and meaningful increase that goes a long way toward addressing how people make and consume television content these days.”


The guild said that another major priority going into the talks with management’s Alliance of Motion Picture and Television Producers was to “further secure the DGA-Producer Pension Plan, the best-funded retirement plan in the industry, against future unknowns such as market volatility.”

To that end, the employer contribution rate to the Pension Plan now will increase by one-half percent in the first year of the agreement from 5.5%-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 Directors Guild of America-Producer Pension Plan or the Directors Guild of America-Producer Health Plan.

“After intense preparation, and a tough negotiation centered on complex issues, what we have achieved in high budget SVOD, together with significant pension and compensation gains, is historic in terms of setting the tracks deeper and wider for all our Guild’s members,” DGA National Executive Director Jay Roth said. “We began laying the groundwork nearly a decade ago as the course of the industry began to shift – technologically and globally – and today we’ve taken a huge leap forward in realizing that vision. I am proud of the work accomplished to protect the future through this forward-looking contract.”

The new pact, which if ratified goes into effect on July 1, 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.”

To address this concern, the DGA obtained a provision requiring all first-time TV drama directors who do not have prior directing experience – or who have not completed or enrolled in a studio-sponsored Television Director Development Program – to attend an orientation program provided by the DGA before their employment begins.

The guild said the new agreement also includes provisions addressing safety, improvements in creative rights – including expanded rights of members when their work is shown theatrically as well as provisions addressing late scripts – and specific advances that pertain to members of the director’s team.

This article was printed from https://deadline.com/2016/12/dga-board-approves-new-contract-wage-hikes-svod-residuals-1201876926/