Directors reach deal with Hollywood
Los Angeles, January 18, 2008 "Two words describe this agreement - ground breaking and
substantial," said Gil Cates, chairman of the Directors Guild of
America's negotiations committee. "There are no rollbacks of any
kind."
Among other things, the three-year agreement establishes key
provisions involving compensation for programs offered on the
Internet. That issue has also been a key sticking point between striking writers and the studios, which broke off talks on Dec. 7.
In announcing the deal with directors, the Alliance of Motion
Picture and Television Producers, which represents studios,
expressed hope that it would help end what it called an extremely
difficult period for the industry. It also called on the writers guild to engage in informal discussions to determine if there was a reasonable basis for returning to the bargaining table.
The Writers Guild of America said it would evaluate the terms of
the directors' deal. It also reiterated that it has been calling on
the studios to resume negotiations.
"We hope that the DGA's tentative agreement will be a step
forward in our effort to negotiate an agreement that is in the best
interests of all writers," the writers guild said in a statement.
Writers previously said directors do not represent their
interests. The deal with directors gives their union jurisdiction over
programs produced for distribution on the Internet and sets a new
residuals formula for some paid Internet down loads that essentially
doubles the rate currently paid by employers, the guild said.
In addition, it sets residual rates for ad-supported streaming
and use of clips on the Internet.
"Our industry's creative talent will now participate
financially in every emerging area of new media," the studio
alliance said in a statement. The deal was welcomed by others in Hollywood. "I'm very pleased with the new agreement and I hope it helps speed up the negotiations" with the writers guild, George Clooney said. Clooney has often commented on the need to resolve the strike to put thousands of people back to work in Hollywood.
The directors guild was well-prepared when it started
negotiations Jan. 12. It had spent $2 million researching the potential value of new media over the next decade and held a series of meetings with key studio heads to establish a basis for the formal talks.
Cates, who's been involved in union contract negotiations for
three decades, served as lead negotiator for directors.
He is also producing this year's Academy Awards program, which is imperiled by the writers standoff.
Sunday's Golden Globes were reduced to a news conference after
actors refused to cross writers' threatened picket lines.
NBC lost millions of dollars in ad revenue, and award winners
were deprived of instant publicity that could have provided a
box-office bump.
New media issues also were expected to dominate negotiations
with the Screen Actors Guild, whose contract expires in June.
The directors guild said late last year that it would delay the
start of talks to give writers a chance to come to an agreement
with studios.
But the guild clearly lost patience after negotiations between
the writers and studios broke off last month and the strike dragged
on.
Among other things, the studios' deal with directors says:
- Programs produced for the Internet will be directed by guild
members, with the exception of low-budget shows.
- Residuals for down loaded movies will be increased by 80
percent over the current rate paid by employers. Those payments
will be based on a distributor's gross, which the guild said was a
key point in negotiations.
- Companies are contractually obligated to provide the guild
"unfettered access to their deals and data," the guild said,
calling that unprecedented transparency.
- For ad-supported streaming of Internet programs, an initial
17-day free window will be followed by a requirement that companies
pay 3 percent of the residual base - about $600 for a network
prime-time drama - for 26 weeks of streaming. Companies can
continue to stream for another 26-week period by paying an
additional 3 percent, or a total of $1,200 for one year's worth of
streaming. During a program's first season, the 17-day window is
expanded to 24 days to help build audience.
In their talks, the writers guild and studios have clashed over
using a percentage of a distributor's gross receipts to determine
Internet compensation.
The guild said it sought that approach but was told by the
alliance it was an unworkable and unacceptable formula. Instead,
the studios offered a flat $250 payment for a year's use of an
hour long TV show on the Web.
The guild balked, citing the $20,000-plus residual that writers
now earn for a single network rerun of a TV episode.
Also at issue for the writers guild is unionization of reality
and animation writers.
Talks broke down after the alliance demanded the guild take that
and other issues off the table, claiming there had been an
agreement to drop it.
The guild's next move may be influenced by history.
There's a lingering resentment among members over what they
considered raw deals in the 1980s involving what eventually became
lucrative home-video and DVD markets.
The writers guild home-video deal was shaped by a deal made
previously by the directors guild, following an industry practice
of pattern bargaining.
That created resentment among some writers guild members toward
the directors.