A Closer Look at the DGA’s Tentative Agreement

By Daniel Jason Ain

As the Writers Guild of America strike continues into its second month, with no immediate end in sight, it looks as though members of the Directors Guild of America (DGA) will likely avoid a similar fate. Last week, the DGA National Board unanimously recommended to its 19,000 members a tentative agreement with the Alliance of Motion Picture and Television Producers. Ratification of this new three-year agreement is expected before the current agreement expires on June 30th.

A few of the most noteworthy changes to the status quo presented in this tentative agreement are summarized below.

Compensation:

  • Wages: Wage minimums for DGA directors, with a few exceptions, will be over 13% greater by July 1, 2025 than they are today due to scheduled annual wage increases in 2023, 2024 and 2025, including a 5% increase effective July 1, 2023.
  • SVOD (Subscription Video on Demand) Residuals: A new residual structure will provide directors with increased residuals.  As one example, SVOD features with $13M+ budgets will have a three-year worldwide residual of $230,250, a 34% increase.  Note, however, that while certain residuals will be based on platform subscribers (e.g., the largest streamers will now pay 76% more in foreign residuals), it does not appear that SVOD viewership data of a film/series will affect residual amount.
  • “Soft Prep” (for feature directors): The agreement guarantees compensation for work done prior to the pre-production start date. If certain conditions are met, directors will be paid a $5,000 weekly fee (up to a $50,000 cap). In the event that the director receives an overscale fee for their subsequent directing services on the film, this “soft-prep” compensation can be credited against overscale.
  • Post-production payments (for episodic television directors): High Budget SVOD and Pay TV episodic directors will be entitled to paid post-production compensation. Specifically, episodic directors will be paid for 2 post-days (for one-hour series) and 1 post-day (for half-hour series), with these post-days to be used to incorporate producer notes and collaborate on a second cut.  However, the DGA made a significant concession in order to achieve this: the wage increases for these directors will only be 6.6% over the next three years, rather than the 13% increase noted above.

Artificial Intelligence (“AI”):   Duties that have customarily been assigned to DGA directors must continue to be assigned to a “person” and may not replaced by or assigned to AI.  To avoid any possible ambiguity, the new agreement will make clear that AI “does not constitute a person.” Additionally, recognizing the rapid pace of AI development, DGA and employers (including senior studio executives) have agreed to meet twice annually to discuss and continue negotiations over AI uses and potential payments for DGA directors who direct material which is used to train AI systems.

Diversity:  A Joint Diversity and Inclusion Committee will be established.  There will also be an expansion of studios’ obligations to create hiring opportunities for underrepresented groups. Currently, the DGA Basic Agreement requires that employers “work diligently and make good faith efforts to increase the number of working racial and ethnic minority and women directors.”  In the new agreement, these employers will also have the obligation to increase the number of LGBTQIA+ directors and directors with disabilities. It remains unclear what reporting is required (quantitative or qualitative), and what repercussions exist, if any, for failure to meet the seemingly subjective standards. Certain studio employers (i.e., CBS, ABC, NBC, Sony, Warner Bros, Paramount, and Netflix) are also guaranteeing that participants in their television director diversity programs will direct a minimum of one episode.

The above only scratches the surface of new terms that, pending ratification, will go into effect in July.  Changes to pension and health plans, safety rules, and creative rights, among other terms, have also been negotiated.  It will be important for DGA directors to understand their new rights and entitlements, and for employers to educate themselves on their new obligations.

This article is intended as a general discussion of these issues only and is not to be considered legal advice or relied upon. For more information, please contact RPJ Senior Associate Daniel Jason Ain who counsels clients in areas of entertainment, media and literary, intellectual property and employment law. Mr. Ain is admitted to practice law in the State of New York and the District of Columbia (admission pending).