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, Jan. 17, 2008 (PRIME NEWSWIRE) -- 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 1/2 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.

            

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