Members of the Directors Guild of America recently voted to ratify proposed three-year agreements with major Hollywood studios. The approved DGA contracts contain fresh terms designed to address some of the most critical issues facing the industry today.
In this post, we’ll dig into the new DGA contracts and highlight the key changes that could affect your next production. We’ll cover everything you need to know about the new terms, from the reconstruction of international residual rates to the DGA’s new policy on artificial intelligence.
On June 23rd, 2023, DGA members voted to ratify a new collective bargaining agreements with the Alliance of Motion Picture and Television Producers (AMPTP). The ratification vote is the latest and final step in a formal negotiation process that began on May 10th. It validates tentative agreements whose terms were made public after approval by the DGA National Board on June 6th.
Specifically, the newly ratified agreements are the DGA Basic Agreement and the Freelance Live Television and Tape Agreeement (FLTTA).
The new DGA contracts were approved by an impressive 87% of votes. Approximately 41% of the DGA’s 16,321 eligible members participated, a turnout rate that DGA officials say exceeds that of any other ratification vote in Guild history.
The DGA hails the agreement as achieving breakthroughs on key issues that have come to define the present era of filmmaking.
Here’s how DGA President Lesli Linka Glatter described the occasion:
“I’m proud to report that DGA members have joined together to ratify a new contract that will allow every Director, Assistant Director, Unit Production Manager, Associate Director, and Stage Manager to share in the success of what we create. Our new contract secures gains on wages, global streaming residuals, safety, diversity, and creative rights that build for the future and impact every category of member in our Guild.”
Ratification of the new DGA contracts concludes the AMPTP’s first successful negotiation with a major film union or guild this year. It comes during both a parallel contract negotiation with SAG-AFTRA and a high-profile strike by members of the Writers Guild of America.
The new DGA contracts are set to go into effect on July 1st, 2023. Their terms will be valid for three years following.
The new DGA contracts are packed with fresh policy changes of all shapes and sizes. Below, we’ll help you cut through the noise by highlighting key contract terms that might affect your future productions.
Please note that the following sections do not represent an exhaustive list of contract modifications. For complete information, review the new contract directly or reach out directly to the Directors Guild of America.
With that in mind, let’s start with a change that could affect your bottom line.
The new DGA contracts effectively update the DGA rate card. It guarantees a series of annual increases to minimum salaries for the next three years.
The Guild and the AMPTP will implement these increases in the following order:
Together, these updates will constitute a compounded wage increase of over 13% through the contract’s term limit. The DGA notes that this represents the highest three-year wage increase in more than 30 years.
Heading into negotiations, foreign streaming residuals were a high priority for the DGA. The new DGA contracts are designed to secure Guild members’ financial futures by restructuring residual payments for platforms that provide subscription video on demand (SVOD) services.
In other words, streaming services will now have to pay global residuals according to new rules.
For the first time, the residual structure for SVOD services will be based on the platform’s number of foreign subscribers. This contrasts with prior residuals policy, under which foreign residuals were determined simply as a percentage of domestic residuals.
The result is a residual formula that will keep payments in proportion to the growth of streaming platforms. More immediately, this new residual structure will create a significant increase in foreign residuals compared to the previous DGA contracts.
For a one-hour program made for the largest platforms, the DGA estimates that the new structure will cause a 76% increase in foreign residuals payments and a 21% increase overall. Half-hour and feature-length programs will likewise experience sizable increases.
As artificial intelligence finds its place in the entertainment industry, production unions and guilds face increasing pressure to protect their members against disruptive technology. The new DGA contracts tackle the issue by establishing guidelines that limit the use of AI without prohibiting it altogether.
Specifically, the contracts note that all duties performed by DGA members must be performed by a person and that generative artificial intelligence (GAI) “does not constitute a person”. The DGA contracts further prohibit employers from using GAI in connection with creative elements without first consulting the director or other DGA-covered employees.
Critically, the new DGA contracts also mandate twice-yearly meetings with the Studios to discuss and negotiate artificial intelligence issues. This term creates a formal structure that protects Guild members from AI while preserving the opportunity to seek its advantages.
The new contract leaves the door open for directors to experiment with neural radiance fields and other AI-powered virtual production tools through the foreseeable future. However, the subject will likely be revisited in more detail when the next contract negotiations roll around in 2026.
On feature films, directors often perform work before the start of their official pre-production period. Known as “soft prep”, this work is often unpaid and may go on for months per project.
The new DGA contracts seek to remedy this challenging situation by establishing clear guidelines for soft prep compensation on theatrical motion picture productions.
The new contract mandates that directors be paid a weekly salary starting at a minimum of $5,000 and scaling up to $50,000. In order to qualify for soft prep compensation, three of the following four individuals must be engaged on the project prior to the official prep period:
Up to 10 weeks of soft prep are permitted under the new contract. The DGA notes that soft prep compensation may be credited against any above scale amounts if the same director provides directing services on the project. This further incentivizes personnel consistency from soft prep through production.
The new DGA contracts outline several steps designed to increase inclusivity within the production industry.
Most notably, the DGA and the AMPTP have agreed to establish a joint Diversity and Inclusion Committee. Through the new committee, DGA representatives plan to engage in regular meetings with studio executives to improve directorial opportunities for underrepresented groups.
CBS, ABC, NBC, Sony, Warner Bros., Paramount, and Netflix have taken a further step on their own. They will now guarantee that participants in their television director diversity programs have the opportunity to direct at least one episode of television as part of the program.
Additionally, Studios have agreed to expand their obligation to improve hiring opportunities for more underrepresented groups than previously defined.
The new DGA contracts establish the first-ever terms and conditions for all high-budget “non-dramatic” programs made for SVOD services. Non-dramatic programs are essentially any shows that are not built around a fictional narrative.
In this case, that includes variety, reality, quiz, game, and other unscripted programs specifically made for streaming platforms.
The contract carries basic minimums over from network non-dramatic programs and only applies exceptions under select conditions. According to the DGA, these new terms significantly increase the number of programs that will now pay residuals to Guild members.
In another first, non-dramatic SVOD residuals will now be shared by directors and the other members of their directorial team. Associate directors and stage managers of non-dramatic SVOD programs will receive compensation that did not exist under the previous DGA contract.
The ratified DGA contracts contain a wide variety of individual terms and conditions. Beyond the major policies described above, here’s a quick rundown of other notable changes that might affect your next production:
Again, this list is not exhaustive. For more information, check out the official DGA Summary of Agreement or contact a qualified DGA representative.
The new DGA contracts go into effect on July 1st, 2023. For the following three years, this contract will dictate the relationship between producers, directors, and the rest of the directorial department. Before your next production, be sure to review the contracts and take steps to simplify union compliance.
At Wrapbook, we pride ourselves on providing outstanding free resources to producers and their crews, but this post is for informational purposes only as of the date above. The content on our website is not intended to provide and should not be relied on for legal, accounting, or tax advice. You should consult with your own legal, accounting, or tax advisors to determine how this general information may apply to your specific circumstances.