DGA about to announce a deal?

thekidslepthere

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Not the WGA but the DGA, the directors guild, whose contract doesn't even expire until June is rumored to be coming to terms with the AMPTP. They just started negotiating on Saturday, but had told their members they were supposedly within "shouting distance".

Lending some credibility to the rumor is that all the big studios are axing under performing production deals with writers. Finally cleaning house. The thinking is they wouldn't want to do this after the DGA makes a deal and when hopefully the WGA is in talks again.

Is this thing finally coming to an end? Hopefully we'll know more in the coming days...

Monday, January 14, 2008

DGA Deal To Be Announced Tomorrow?

This is still a rumor, but it's definitely gaining steam -- word is spreading that the DGA has finalized a deal with the congloms, and will announce the deal tomorrow.

We don't know what the terms of the deal will be, if indeed it does exist. We're not going to speculate because, if it's true, we'll find out the specifics soon enough.

But we over at UH will make one suggestion: everyone stay calm. That's the only way we can really be prepared for the unexpected -- is to stop expecting anything.

When and if the DGA announces their deal, it will take some time for all of us to analyze the terms of that deal and see if they're acceptable to us as a guild or not. We're inevitably going to argue and disagree; we'll need to do it civilly, and calmly.

If they have made a deal, remember the WGA is not bound to whatever the DGA has committed to; however, the DGA deal can be used as a template to jumpstart our negotiations with the corporations. We certainly won't get less than what the DGA gets; that's how pattern bargaining works.

The one thing I think we can say for certain is that there will be aspects of any deal -- even one we negotiated ourselves -- that will be painful and disappointing for all of us. The roller-coaster emotions of the strike can be devastating. Whatever happens, we have to ride it out, think clearly, argue and discuss -- and then make the best decision we can, for our Guild and for the town.
UPDATED 8:40 p.m.
The cutting of even more overall deals could be seen to support the contention that the DGA and AMPTP are about to announce a deal. The following is reprinted from today's Variety:
Citing fallout from the WGA strike, Warner Bros. TV, CBS Paramount Network TV, Universal Media Studios and 20th Century Fox TV have decided to follow the lead of ABC Studios by terminating a big batch of deals.
At 20th, about 15 pacts have been shed, while insiders describe the Warner Bros. cuts as less than a half-dozen so far. CBS Par has trimmed more than a half-dozen deals (though it has a much smaller roster from which to cut).
No word yet on the extent of the NBC U cuts. ABC Studios slashed nearly two dozen deals on Friday.
Agents around town began getting calls and letters from studio execs on Monday afternoon.
Among the scribes and producers cut from the CBS Par roster: Mark Johnson, John McNamara, Rene Echevarria, Barry Schindel, Jennifer Levin and the team of Sivert Glarum and Michael Jamin. Eye unit has also scrapped its pact with Hugh Jackman's company, which recently produced "Viva Laughlin."
Among the departed at 20th: Jonathan Lisco, whose fall drama "K-Ville" was canceled by Fox, and the team of Gretchen Berg and Aaron Harberts ("Pepper Dennis"). They're staffers on a show that will return, "Women's Murder Club," but will no longer be developing new projects for the studio. Other scribes let go include Larry Kaplow ("K-Ville") and Paul Redford ("Journeyman").
Studios issued statements Monday blaming the cuts on the strike. “Production companies in the entertainment industry continue to feel the impact of the ongoing writers strike,” CBS Par said. “As a result of this change in development and production activity, we have made a difficult decision to discontinue ‘overall deals’ with a number of writers and producers whose talents we greatly value and respect.”
UMS also praised its writers and producers, but said that “the duration of the WGA strike has significantly affected our ongoing business.
Regretfully, due to these changed business circumstances, we've had to end some writer/producer deals. We wish these colleagues the very best and thank them for their contributions."
WBTV was more succinct: “As an unfortunate but direct consequence of the strike, we have been forced to release some of the valued members of our roster from their development deals.”
 

Mindslayer

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Hopefully this will get the writers and the studios back to the bargaining table, but at this point does it even matter as far as this season goes ? Personally I think its just about beyond saving at this point.
 

domelogic

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imagine how bad tv is going to get. some of it has already started but can not survive on reality type tv only. thank god we are in an era of dvd's and i can start shows i havent seen before.

but you are right this season is done and so might the interest for some of the shows
 
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If true, this might impact the writer's support from the general public. If the DGA could work out a deal in such a short period of time why couldn't the WGA even come close in all of the talks both before and after the strike.

In addition, you have to think that the studios are not going to give the writers any more than they give the directors so its almost as if the writers are stuck with whatever deal the directors get.
 

thekidslepthere

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If true, this might impact the writer's support from the general public. If the DGA could work out a deal in such a short period of time why couldn't the WGA even come close in all of the talks both before and after the strike.

In addition, you have to think that the studios are not going to give the writers any more than they give the directors so its almost as if the writers are stuck with whatever deal the directors get.
While directors and writers deals are often similar, they are still very different.

The big difference being that in TV it's usually one director who directs each episode, but a team of writers create a season together, then split up who is writing which episode and how the credit breaks down.

Also I'm pretty sure a show like Survivor or American Idol uses DGA members to direct episodes, but they get around using WGA members, even though there are writers putting words in the hosts mouths. How the fuck is that fair?

The DGA always comes to terms quick because it's very clear cut what a director does, but with WGA members there's a lot more gray area.

Also the thing to think about is that nearly every working director will get above the base points on their union contract, while the majority of WGA members working in TV don't get above the base points, so that is also why the membership of the DGA is more willing to quickly approve what ever is thrown their way.
 

thekidslepthere

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Here's the deal, thought some of you might want to look over what's been released so far. The WGA is looking it over to see what they can work with. Hopefully this will lead to them getting back to the table.

DGA Official Announcement

We're working on analysis now, as is the WGA and pretty much everyone else in town. Here's the DGA's statement:

DGA AND AMPTP REACH TENTATIVE AGREEMENT
ON TERMS OF NEW CONTRACT

DGA Gains Solid Wage Increases with No Rollbacks Plus Precedent-Setting Jurisdiction Over New-Media and a Doubling of EST Residuals Rate

LOS ANGELES – The Directors Guild of America (DGA) announced today that it has concluded a tentative agreement on the terms of a new 3-year collective bargaining agreement with the Alliance of Motion Picture and Television Producers (AMPTP).

Highlights of the new agreement include:

Increases both wages and residual bases for each year of the contract.

Establishes DGA jurisdiction over programs produced for distribution on the Internet.

Establishes new residuals formula for paid Internet downloads (electronic sell-through) that essentially doubles the rate currently paid by employers.

Establishes residual rates for ad-supported streaming and use of clips on the Internet.

"Two words describe this agreement - groundbreaking and substantial," said Gil Cates, chair of the DGA's Negotiations Committee, in announcing the terms of the new agreement. "The gains in this contract for directors and their teams are extraordinary – and there are no rollbacks of any kind."

Formal negotiations between the DGA's 50-member Negotiations Committee and the AMPTP began Saturday, January 12, and were concluded today. Talks were led by Cates and DGA National Executive Director Jay D. Roth. They were preceded by months of informal discussions and nearly two years of preparation and research by Guild staff and consultants.

"This was a very difficult negotiation that required real give and take on both sides," said DGA president Michael Apted. "Nonetheless, we managed to produce an agreement that enshrines the two fundamental principles we regard as absolutely crucial to any employment and compensation agreement in this digital age: First, jurisdiction is essential. Without secure jurisdiction over new-media production—both derivative and original—compensation formulas are meaningless. Second, the Internet is not free. We must receive fair compensation for the use and reuse of our work on the Internet, whether it was originally created for other media platforms or expressly for online distribution."

The agreement includes the following gains in New Media:

· Jurisdiction: The new agreement ensures that programming produced for the Internet (both original and derivative) will be directed by DGA members and their teams. The only exceptions are low-budget original shows on which production costs are less than $15,000 per minute, $300,000 per program, or $500,000 per series—whichever is lowest.

· Electronic Sell-Through: EST is the paid download of features and TV programming. The agreement more than doubles the EST residual for television and increases the feature film residual by 80% over the rate currently paid by the employers.

Specifically, the EST residual rates will be .70% for television downloads and .65% for film downloads, above a certain number of units downloaded. Below that, residuals will be based on formula employers currently pay.

Payments for EST will be based on distributor's gross, which is the amount received by the entity responsible for distributing the film or television program on the Internet. Having distributor's gross as the residuals basis was a key point in our negotiations.

The companies are now contractually obligated to give us unfettered access to their deals and data. This access is new and unprecedented and creates a transparency that has never existed before. Additionally, if the exhibitor or retailer is part of the producer's corporate family, we have improved provisions for challenging any suspect transactions.

· Ad-Supported Streaming: After an initial 17-day window for free promotional streaming of Internet programs, companies must pay 3% of the residual base (approximately $600 for network prime time 1-hour drama) for 26 weeks of streaming. They can continue to stream for an additional 26-week period by paying an additional 3% -- 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.)

· Sunset Provision: Allows both sides to revisit new media when agreement expires.

"Our fundamental goal in these negotiations was to protect our interests in the present while laying the groundwork for a future whose outlines are not yet clear," said Cates. "We knew that gaining jurisdiction over new-media production and winning fair compensation for the reuse of our work on the Internet were the key issues for setting a framework for the future, but we also had to secure real gains for our members in today's world."

The new tentative agreement includes the following:

Annual wage increases of 3% for primetime dramatic shows and daytime serials and 3.5% for all other covered programming.

Outsized increase in director's compensation on high-budget basic cable for series in the second and subsequent seasons.

Annual residual increases of 3% for primetime shows and 3.5% for all other covered programming.

Specific advances that pertain to members of the director's team.

PLEASE SEE FACT SHEET BELOW FOR MORE DETAILS

Details of the new agreement will be submitted to the Guild's National Board for approval at its regularly scheduled meeting on Saturday, January 26, 2008. The DGA's current contracts expire on June 30, 2008.

FACT SHEET
DGA Tentative Agreement
January 17, 2008

Basic Agreement

Wage Increases
Compensation for all categories except directors of network prime time dramatic programs and daytime serials increases by 3.5%, each year of the contract.

Compensation for directors of network prime time dramatic programs and daytime serials increases by 3%, each year of the contract.

Outsized increase in director's compensation on high budget basic cable dramatic programs for series in the second and subsequent seasons:
For ½ hour programs: 12% increase in daily rate and increase in guaranteed number of days to 7 days.
Results in show rate increasing from $9,009 to $11,760.
For 1-hour programs: 12% increase in daily rate and increase in guaranteed number of days to 14 days.
Results in show rate increasing from $18,010 to $23,520.

Residual Increases
Residual bases increase by 3.5%, each year of the contract, except for reruns in network prime time. Residuals for reruns in network prime time increase by 3%, each year of the contract.

Healthcare
Employers continue to make health care contributions at specially negotiated rate of 8.5%, secured in the 2005 Basic Agreement to address the impact of the growing cost of health care on the DGA Plan. Provisions permitting decrease in contribution rate by employers removed.

Other Provisions
Second Assistant Directors to manage locations in New York and Chicago.
Establishes a wrap supervision allowance of $50/day for the Second Assistant Director who supervises wrap on local and distant locations.
Increases incidental fees and dinner allowances for Unit Production Managers and Assistant Directors.

New Media

Jurisdiction over:
All new media content that is derivative of product already covered under current contracts.

Original content:
All original content above $15,000/minute or $300,000/program or $500,000/series, whichever is lowest.

Original content below the threshold will be covered when a DGA member is employed in the production.

Electronic Sell-Through (Paid Downloads)
More than doubles the rate currently paid by the employers on television programming to .70% above 100,000 units downloaded.

Below 100,000 breakpoint: rate will be paid at the current rates of .30% until worldwide gross receipts reach $1 million and .36% thereafter.

Increases rate paid on feature films by 80% to .65% above 50,000 units downloaded

Below 50,000 breakpoint: rate will be paid at the current rates of .30% until worldwide gross receipts reach $1 million and .36% thereafter.

Distributor's Gross
Payments for EST will be based on distributor's gross instead of producer's gross, a key point in our negotiations. Distributor's gross is the amount received by the entity responsible for distributing the film or television program on the Internet. We would not have entered the agreement on any other basis.

Companies will be contractually obligated to give us access to their deals and data, enabling us to monitor this provision and prepare for our next negotiation. This access is new and unprecedented.

If the exhibitor or retailer is part of the producer's corporate family, we have improved provisions for challenging any suspect transactions.

Ad-Supported Streaming:
17-day window (24-day window for series in their first season).
Pays 3% of the residual base, approximately $600 (for network prime time 1-hour dramas), for each 26-week period following 17-day window, within first year after initial broadcast.
Pays 2% of distributor's gross for streaming that occurs more than one year after initial broadcast.

Clips
· Provides the companies with limited windows where they can distribute clips of feature films and television programs in new media to promote a program. Provides for payment for all other uses in New Media.

Sunset Provision
Allows both sides to revisit new media when the agreement expires.
 

LiddyRules

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Here's the deal, thought some of you might want to look over what's been released so far. The WGA is looking it over to see what they can work with. Hopefully this will lead to them getting back to the table.
In your opinion, do you think this might lead to a WGA deal soon or will the effect be minimal at best?
 

thekidslepthere

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Hey Liddy, everyone I've talked to so far seems to be excited but has a let's wait until the whole contract is released to go over it with a fine tooth comb before we really get a boner.

The AMPTP did just release this...

We hope that this agreement with DGA will signal the beginning of the end of this extremely difficult period for our industry. Today, we invite the Writers Guild of America to engage with us in a series of informal discussions similar to the productive process that led us to a deal with the DGA to determine whether there is a reasonable basis for returning to formal bargaining. We look forward to these discussions, and to the day when our entire industry gets back to work.
That's really positive, they aren't making the demands like we take the six provisions off the table before we ever talk again (reality writers, animated writers, those things) that they were back on December 7th. This has been the best sign so far.

With all the bad press the Studios have been getting, the debacle of the Golden Globes, everyone thinks it should have to end sooner rather than later. Also the Studios don't want this going until June when SAG's contract is up, if all three major Hollywood Unions had their contracts ending at the same time the Studios would be in an even worse place when the contracts expire in 2011.
 

Mindslayer

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Hopefully the writers respond positively to this and decide to sit down again, even though the season is probably unsalvagable at this point
 

thekidslepthere

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Agencies Confer About DGA Deal

We've learned that a conference call took place this afternoon, with the heads of all the Hollywood agencies, to go through the DGA deal summary point by point.

Among other things that happened on that call was a unanimous feeling that the DGA deal was one they all felt was a good one, considering how entrenched the AMPTP has been up until now. Some aspects of the deal are even surprising (although they noted that some, specifically the ad-supported streaming payments, are not what TV writers had hoped for.) The agents all felt the gains made in the DGA deal would never would have been reached without the WGA strike and SAG's support.

In that call, they also discussed that Peter Chernin called John Bowman today to tell him that the same deal is on the table for the WGA, and to try and open communications for new negotiations between the WGA and the congloms in a positive way.
So that seems pretty positive, and Mindslayer, there is still a chance for shows to be brought back, I know there has been talks to at least try and bring back those "Heroes: Origins" eps that had been scrapped and then to start the next Heroes season early, or least that's the rumor I heard. If this thing is over in a couple weeks they'll at least do a handful of more eps to cover May sweeps for every network that doesn't run American Idol.
 

Mindslayer

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I guess youre right, but will certain shows - like Heroes, for example - that set-up their final episodes before the strike as season finales bother coming back for, say, three or four more episodes, only to have to construct another 'season' finale ?

As far as this shit ending in a month or so, maybe there's still a possibilty that we may get all 16 episodes of Lost after all, which would make me a VERY happy boy indeed....
 

thekidslepthere

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This is long, but it's broken down pretty easily to scan through, this is the unofficial opinion of a group of WGA strike captains...

Thursday, January 17, 2008
First Glance at the Deal Summary

Before we begin, here's a caveat: WE ARE NOT LAWYERS. WE ARE NOT BUSINESS AFFAIRS EXECS. WE ARE NOT PROFESSIONAL NEGOTIATORS.

We're a group of volunteer WGA strike captains, and we're posting our reactions to the DGA deal summary that was released today. These are our thoughts alone. They are not official, they don't reflect the WGA's opinion, and frankly, they will probably include a few mistakes.

Which brings us to our second caveat: The DGA deal summary is just that, a summary. It's not the final comprehensive contract. That document, we've been told, is still being drafted by the DGA. So the unclear items in the summary will remain so until the DGA releases the contract.

Since the conversation is raging already, we want to weigh in with our preliminary thoughts. Caveats in mind, here we go:

Issues of Wage Increase, Residual Increase and Healthcare
From what we can see in the summary, there are no rollbacks and some decent increases. As rollbacks on just about everything were such a big part of the congloms' proposal to the WGA, we are, cautiously, optimistic here.

Jurisdiction on Internet Productions
The good: Content that is derivative of something already covered would likewise be covered. In other words, mobisodes, webisodes, whatever-isodes based on something that's already a series or a movie are automatically covered, no matter what the budget.

The bad: We can't tell from the deal summary language if that includes the WGA concept of "separated rights." And there are few concepts more important to writers than separated rights. When you create a character, you have merchandising, sequel and other exploitation rights to that character. Those rights can be a very important source of income -- just ask the creators of a character named Captain Jack Sparrow.

Original Internet-first content
The good: there's coverage for productions costing $15,000/minute, when before there was no coverage at all.

The bad: No minimums are mentioned. We don't know for sure, but that could mean the DGA didn't negotiate any. Also, no mention of separated rights in the summary for Internet-first.

Here is a nightmare scenario: Networks start making inexpensive pilots with a budget of $299,000 and put them up on the Internet (on say, Hulu) to gauge their popularity. It's bargain-basement R&D. If a pilot hits, it gets aired on conventional TV, but pays no residuals, contributes no health & pension, provides no separated rights... provides no protections at all. Fifty years of hard-fought creator rights would vanish.

The ambiguous: Regarding coverage of original content below $300,000 per episode, the summary says: "Original content below the threshold will be covered when a DGA member is employed in the production." That language is unclear. If a single DGA member is employed in a sub-$300,000 production, is the whole production covered (including btl crew)? Or just the DGA member? If it's the whole production, that's a "good." But if it's just one person? That's a "bad."

Electronic Sell-Through (aka downloads)
For the first 100,000 downloads of a TV show, the payment is the DVD rate: 0.3%. After the first 100,000, it rises to .7%

For features, the rate is 0.3% for the first 50,000 downloads and 0.65% thereafter.

The good: It's more than twice what we had before.

The bad: What we had before was based on the miserable DVD formula. WGA, SAG and DGA had all agreed that that number really should be 1.2%, and the unions have actually sued the congloms over it, claiming that the use of the DVD formula for downloads is a misinterpretation of their respective MBAs.

So the 0.7% and 0.65% numbers are still terribly low. In addition, many downloads will not reach the 100,000 or 50,000 threshold, and will generate only the abysmal 0.3%.

It's frustrating to us that the DGA couldn't increase that number out of the DVD range. The DVD formula was based on the notion that "home video" meant a bulky plastic VHS tapes with enormous manufacturing and transportation costs. Those costs decreased dramatically over the years. But no increase in residuals. They decreased dramatically again with birth of DVDs. (You can slip them under a door!) But no increase in residuals. With downloads, the manufacturing cost is exactly zero dollars. And terabytes of storage are getting cheaper by the hour. But we still can't improve that DVD formula? Really?


Distributor's Gross
Payments for EST and, we assume, downloads will be based on distributor's gross, which is much better than producer's gross.

The good: This is what the WGA was asking for, and up until now, the congloms said it was a non-starter.

The bad: How will the accounting be kept transparent? The deal summary doesn't provide any guidance. Until we know how the DGA plans to guarantee that the distributor's gross is an accurate number, we can't know if this is meaningful. ("Net profit" points, anyone?)

Ad-Supported Streaming
For the first 17-24 days, no residual payments at all. After that first run, $600 for six months, up to $1200 for the first year of unlimited streaming. After the first year, 2% of distributor's gross.

The good: 2% of distributor's gross is a meaningful number, again with the caveat that the accounting has to be transparent.

The bad: In the near future -- and in some cases, the present -- rerunning television shows on the Internet will replace conventional reruns. This structure, as described in the summary, to our eyes appears to be the end of television residuals. Whereas a primetime network rerun would be worth $20,000, unlimited streaming on the Internet would be worth only $1200, assuming the episode is kept available for an entire year.

Now, as the companies point out, the current Internet streaming market cannot support a residual level that conventional TV can. It may in the near future, in the distant future, or never. So that's why it seems to us (as the WGA NegComm has said in the past) that the best strategy here is to grant the writer a percentage of real revenue. That is not only the best way to fairly compensate writers, but also a hedge for the companies. If and when the streaming market takes off, flat fees for reuse will be egregiously unfair. The percentage model could, in time, make up for the loss of TV residuals as advertising moves solidly to the Internet.

In years two through infinity, 2% of distributors gross is a meaningful formula. But 2% of what? Even if an episode is kept online for more than one year (and who's to say it would), the demand to view it will be minimal. After a year, the episode will likely be available on a DVD set, and has probably been available as a paid download for some time. The minimal number of streams will mean a minimal ad rate. So enjoy your 2%, writer.

If the ad revenue even in the first year of streaming turns out to be negligible, then giving writers a percentage is insurance that the congloms won't have to overpay. But if something takes off and becomes wildly successful, then a percentage-of-revenue model would reward the writer appropriately.

Sunset Provision
This provision apparently tries to address the fear that the unions will again fall into the DVD trap. It is meant to provide a framework to reevaluate the state of the market and adjust for it in three years.

The problem is, a contract expiring is supposed to provide exactly that structure and that insurance. If you've made a bad deal, you get to revisit it in a few years. We're unsure how the sunset provision is any more insurance or provides any more "teeth" than the ordinary process of a contract expiring. And, of course, we're concerned that all the assurances that the DVD deal was temporary were, in the end, empty promises.

In conclusion... There are some genuine gains here, some issues that need clarification and some points of grave concern that threaten to drastically undercut writers' compensation. The DGA deal, as we understand it, is neither reason for celebration nor mourning. Writers (and actors!) must resist the urge to get entrenched in a position on this too quickly. Parts of this deal will be the basis for a meaningful resumption of talks with the WGA, parts of this will not. Let's discuss it, let's debate it, but let's keep it civil and understand that the deal that gets everyone back to work will be the one that no one loves, but everyone can live with.
 

Mindslayer

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Best case scenario both sides agree to meet in early February after two more weeks of posturing and rhetoric. Then, if both are willing to compromise, maybe a deal can be struck by March 1st, although that will probably be too late to save the current season, but it may allow for an early start to next season, which both the writers and the studios are probably going to have to agree to in order to garner some goodwill from the viewers, who have been largely ignored in all of this.
 
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Best case scenario both sides agree to meet in early February after two more weeks of posturing and rhetoric. Then, if both are willing to compromise, maybe a deal can be struck by March 1st, although that will probably be too late to save the current season, but it may allow for an early start to next season, which both the writers and the studios are probably going to have to agree to in order to garner some goodwill from the viewers, who have been largely ignored in all of this.
I've heard that they could meet as early as this week