The Directors Guild of America has reached a tentative agreement with the Alliance of Motion Picture and Television Producers (AMPTP), ending the threat of two major Hollywood talent guilds being on strike at the same time. 

The DGA’s deal includes not just improvements in wages and benefits, but also a major bump in foreign residuals from subscription streaming companies and protection of replacement threats from artificial intelligence.

In fact, foreign streaming residuals received one of the biggest pushes from DGA leaders, who complain that the current rules dramatically undervalue international distribution. 

“Every member of our union can be proud of the gains we’ve achieved across the board,” said Russell Hollander, national executive director of the DGA, in a statement. “Significantly, and for the first time ever, global SVOD residuals will be paid based on the number of international subscribers. The result is a 76% increase in foreign residuals for the biggest services. As our industry becomes increasingly global, these gains are imperative to ensuring our members are valued and compensated for their incredible work.”

The DGA brass now must sell the agreement to the guild's 19,000 members and get it ratified. 

The template effect of the agreement is said to be minimal in solving the month-old Writers Guild of America strike. 

But here are the major deal points for the DGA:

• Big gains in wages and benefits include a 5% increase in the first year of the contract, 4% in the second year and 3.5% in year three. And an additional 0.5% was kicked in to fund a new parental leave benefit.

• DGA members won a substantial increase in the foreign residuals for dramatic programs made for SVOD by securing a new residual structure to pay foreign residuals. This amounts to a 76% increase in foreign residuals for the largest subscription streaming platforms. Residuals for a one-hour episode will now be roughly $90,000 for the first three years of exhibition.

• The agreement also establishes the industry’s first-ever terms and conditions for directors and their teams on non-dramatic (variety and reality) programs made for subscription streaming. Also for the first time, associate directors and stage managers will now get a piece of residuals.

• The agreement stipulates that artificial intelligence is not a person and that generative AI cannot replace the duties performed by DGA members.

• The deal stipulates the industry’s first-ever terms, creative rights protections, working conditions and residuals for scripted dramatic projects made for free-to-consumer ad-supported streaming. Unit production managers and assistant directors will share in the residuals.

• For pay TV and SVOD, episodic directors receive expanded paid post-production creative rights. They also added an additional guaranteed shoot day for one-hour programs. That's the first additional day added in more than 40 years.

• For the first time, feature film directors will receive compensation for the months of “soft prep” they have to perform — currently for free — prior to the start of the director’s official prep period.

• DGA member assistant directors won an unprecedented one-hour reduction in the length of their work day.

• The agreement outlines safety advancements, including the first-ever pilot program to require the employment of dedicated safety supervisors. Also included are expanded safety training programs for both directors and their teams, as well as the ban of live ammunition on set.

The Directors Guild of America has hired Rebecca Rhine as its new Western executive director, reporting to DGA National Executive Director Russell Hollander.

Among her duties will be to oversee the contracts department and agency relations, as well as working with government affairs on state/local issues.

Rhine was most recently national executive director of the International Cinematographers Guild, where she negotiated and enforced contracts. Her resume also includes executive director of the San Francisco Municipal Executives Association and assistant national executive director of AFTRA for public policy and strategic planning.

"She is a skilled organizer and negotiator, and with three decades working for labor unions, she has demonstrated her substantial ability to take on difficult battles and achieve remarkable success," said Hollander.

DGA represents almost 20,000 directors in TV, new media and film. ￭

Almost a third of TV episodes in 2019-20 were headed up by directors of color, according to the latest Directors Guild of America Episodic Television Director Inclusion Report*, and more than a third by women.

That was the progress. But where progress remains is among Latinos and women of color, who continue to be "severely underrepresented." Employment of Asian Americans continued to be flat.

Also Read: Telling Stories Sans Stereotype

DGA pointed to some remaining obstacles in the pipeline for first-time directors. “It’s hard enough to achieve success in the competitive world of TV directing,” said DGA President Thomas Schlamme. “Therefore, it is vitally important that no group should be disadvantaged when it comes to developing a career...we will not be satisfied until we see fairness for all. Inclusion is not about one group or another, inclusion means everyone.”

Of the 4,300 episodes produced in 2019-2020, 32% were directed by people of color, up from 27% the season before and from 18% five seasons ago, according to DGA.

Also Read: Black Voices Rising

Episodes directed by women were up to 34% in 2019-2020 from 31% the season before and more than double the 16% of the 2014-2015 season.

Given that the major studios were responsible for almost 75% of that output, DGA ranked them by percentage of directors of color and women for their respective episodes. 

Also Read: CPB Boosts Funding for Content Diversity

Sony and WarnerMedia tied atop the directors of color list, each with 33% of their episodes directed by people of color, followed by Netflix and Disney close behind at 32% apiece and CBS rounding out the top five at 28%, followed by NBCU at 27%, Paramount at 19% and HBO at 18%.

In the women directors category, Paramount was tops at 47% of its episodes directed by women, followed by HBO at 44%, Disney at 41%, WarnerMedia at 38%, and Netflix rounding out the top five at 37%, followed by BCU at 34%, Sony at 32% and CBS at 30%.

Companies that oversaw fewer than 70 episodes--Amazon, Viacom and Lionsgate prominently among them--were not included in the ranking.

*The DGA report data includes "foreign series shot abroad with one or more episodes made under a DGA agreement" and only episodes shot under a DGA agreement, wherever they were produced, are included.

The Directors Guild of America has lobbed the latest complaint against WarnerMedia over the media company’s landmark announcement last week that it will release its entire 2021 Warner Bros. slate on streaming service HBO Max, the same day it premieres these movies in theaters. 

Citing unnamed sources, The Hollywood Reporter said the DGA sent a “sharply worded letter, ”  signed by DGA national executive director Russell Hollander, to Warner Bros. CEO Ann Sarnoff, expressing consternation over how films will be valued in the business model. 

Notably, the guild seems to accuse WarnerMedia of reneging on agreements hammered out by the conglomerate’s previous top-level leadership, former WarnerMedia Entertainment Chairman Robert Greenblatt and ex-HBO Max Chief Content Officer Kevin Reilly, who were both pushed out in August. 

Also read:  WarnerMedia's Math Problem: It Needs 8.4 Million More HBO Max Customers

The  THR source said that in a “wide-ranging” meeting on Nov. 17, 2019, Greenblatt and Reilly laid out agreeable basic valuation terms for content featured in WarnerMedia’s new subscription streaming platform, HBO Max, which would launch seven months later.

WarnerMedia, of course, has pursued a much different content agenda under new CEO Jason Kilar, one in which the DGA said it wasn’t offered a role in helping to shape. 

“The spirit of it was to get a fair, free-market value,” the THR source said of the November 2019 meeting. “What they’ve done is a departure from anything discussed in that meeting.” 

As expected, WarnerMedia’s decision to go “day-and-date” with 17 movies in 2021, extending well beyond the expected end of the current pandemic, has produced a lot of public commentary from relevant stakeholders. 

In his own public letter, filmmaker Christopher Nolan lambasted WarnerMedia’s decision as making “no economic sense.” Meanwhile, high-profile equity analyst Richard Greenfield responded with an investor note of his own, suggesting that WarnerMedia was embarking on the only coherent distribution strategy left, given the state of consumer demand, a model with common sense already laid bare by Netflix.

Speaking to investors Tuesday, WarnerMedia CEO John Stankey also defended the strategy, saying, “because we care about theatrical and we care about streaming, it ensures that we’re doing this in a way that we still show respect for theatrical venues and distribution, and not go and push all of our content on a direct  to streaming exclusively construct, or hand it off to our competitors that aren’t as invested in the theatrical business.” 

Regardless, this DGA press release, dated March 7, 2020, and headlined “Significant Gains Made in Streaming Residuals, Pension, Wages, and TV Creative Rights,” seems to show that the guild was genuinely caught off guard, believing it had basic deal points for “made-for-SVOD” services, including HBO Max, already secured, only to have them reneged upon. 

That announcement touted, “ A nearly 50% increase in residuals for members working on original SVOD series, bringing the three-year residual for a 60-minute series on the highest subscriber SVOD services to more than $73,000. To put the accomplishment in perspective, when combined with the gains from the 2017 agreement, the residual is up nearly fivefold from under $15,000 in 2016, and exceeds the average residuals earned from all markets for the most popular network series.”

The major issue is now, not only is  the definition of “made for SVOD” now skewed, there doesn’t seem to be a ton of clarity on projected revenue for each title. 

MoffettNathanson does seem to concur with movie maker Nolan on the broad assumption that the movies will bring in less money, with the equity research firm projecting a $1.2 billion revenue hit for WarnerMedia in 2021. 

Films that get their first viewing on streaming services or VOD will be eligible for Directors Guild of America 2021 awards under a temporary exception related to COVID-19.

Ordinarily, a theatrical film has to have a seven-day in-theater run before any streaming or VOD window to qualify for the awards.

But with theaters shutting due to the coronavirus, DGA said an exception is warranted and will apply it to the relevant categories--Theatrical Feature Film, First-Time Feature Film, and Documentary.

The DGA Board approved the exception unanimously. It will apply to theatricals that can show they had a planned theatrical release with a "commercial motion picture theater distribution chain in Los Angeles or New York"; that it was for after March 13, when theaters were closed, and that they were then instead streamed or offered on pay-per-view for at least seven days.

DGA is still working on the precise wording of the eligibility criteria given that the pandemic is still a moving target.

The Directors Guild of America has voted unanimously to approve a new three-year agreement with the Alliance of Motion Picture and Television Producers, including streaming residuals topping traditional TV.

The agreement includes wage and residual base increases of 2.5% in the first year and and 3% in the second and third years. 

Negotiations began Feb. 10 and the perspective side's negotiating teams struck the deal March 5. The current contract expired June 30; the new contract expires June 30, 2020. 

"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..." said DGA president Thomas Schlamme. 

No surprise given the billions of dollars being spent on streaming originals, but DGA said that since 2016 the number of made-for subscription video on demand (SVOD) episodes has doubled, and that isn't even taking into account new streaming services Disney+, HBO Max Apple TV+ and Peacock. 

Among the highlights of the deal, according to DGA. 

Made-For-SVOD: 

o "A nearly 50% increase in residuals for members working on original SVOD series, bringing the three-year residual for a 60-minute series on the highest subscriber SVOD services to more than $73,000. To put the accomplishment in perspective, when combined with the gains from the 2017 agreement, the residual is up nearly fivefold from under $15,000 in 2016, and exceeds the average residuals earned from all markets for the most popular network series. 

o "Lower budget made-for-SVOD series will now also be captured under the new contract – expanding the scope of coverage to many more series and ensuring the vast majority of members working in this space benefit from DGA-negotiated terms, residuals and creative rights. 

o "Elimination of 'grandfathering," by which series that began production during a prior contract continued to be governed by the terms of that prior contract, even in subsequent seasons. Under the new agreement, grandfathering will be eliminated,enabling more members working on SVOD series to benefit from the newly negotiated terms."

Pension plan: 

o "Increased funding for the DGA-Producer Pension Plan. Even though it is the best- funded in the industry, the Guild sought to further secure the Plan from potential downturns in the market. 

  ▪ "The Employer contribution rate to the Pension Plan will permanently increaseby one percent (1%) in the first year of the agreement from 7% to 8%.

  ▪ "The DGA will also have the right to allocate up to .5% of the negotiatedincreases 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. 

  ▪ "Increases in the caps upon which pension contributions are made.

TV Director Creative Rights:

o "Gains to address the continuing and growing problem of late scripts – which result in reduced prep time, and negatively impact a director’s ability to deliver the most compelling episode possible on time and on budget.

o "The creative rights negotiation also made progress in restricting electronic transmissions from set, securing additional cutting time for directors of pilots and first episodes of series without pilots, and protecting the director’s right to participate fully in the casting process."

The Directors Guild of America said it has struck a tentative agreement with the Alliance of Motion Picture and Television Producers on a new, three-year contract. 

Negotiations began Feb. 10. The current contract expires June 30, so they are ahead of the game.  

The agreement must still be submitted to the guild's national board, which will hold a special meeting March 7 to vote on the agreement, after which details will be released. Both sides agreed not to talk to the media until that vote.

The Directors Guild of America reported Tuesday that the number of minority and female directors increased during the 2016-17 television season.

According to the DGA 2016-17 Episodic TV Director Diversity Report, the percentage of episodes directed by ethnic minorities rose by 3 points to a record 22% of all episodes, while the share of episodes directed by women jumped 4 points to an all-time high of 21% of all episodes.

The increases comes as more content is being produced across the board. During the 2016-17 season more than 4,482 episodes were produced, an increase of 10% in total episodes compared with the 2015-16 season, and a 42% increase compared with five years ago, according to the report.

Related: New York Backs TV Production Tax Break for Hiring Diverse Writers, Directors

Among studios producing content, Twentieth Century Fox Cos. was the most diverse among the top 10 largest studios, with 45% of its content directed by women and minorities, the DGA found. Netflix finished 10th with only 20.5% of its shows helmed by a minority or female director.

"While this report, and our recent report on hiring of first-time TV directors, reflect some progress overall, there are stark disparities among the major studios that raise questions about how committed to inclusion some employers really are," said DGA president Thomas Schlamme. "We want to make sure that every talented individual has an equal shot, and a path forward. But for that to happen, employers must expand their hiring processes to discover the world of capable directors hiding in plain sight. Frankly, it’s hard to understand why they're not doing more. Even if all the right reasons are not enough for them, they should at least be motivated by the bottom line – inclusion just makes good business sense."

The New York State legislature has passed a bill that would provide tax incentives for hiring diverse writers and directors for TV productions in New York, according to the unions that have been pushing the legislation.

The bill was backed by the Writers Guild of America, East (based in New York) and the Directors Guild of America.

Related > The Production Issue

New York Governor Andrew Cuomo still needs to approve the new tax credit, and it must be included in the state budget, but the passage was a milestone being hailed by WGAE and DGA.

"People in the TV industry have understood for years that enhancing the diversity of writing and directing improves the stories that appear on screen,” said Lowell Peterson, executive director of WGAE in a joint statement. “The missing link for policymakers has been putting money at the point of hire, and this legislation is an important step in that direction.”

Neil Dudich, eastern executive director of the DGA, said: "For years the DGA has pushed the industry to change their imbalanced hiring practices -- so that talent, and talent alone, is the defining factor. By encouraging studios, networks and producers to discover the talented New York TV directors and writers that are out there in abundance, this bill can be a meaningful step forward in establishing a level playing field for all."