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DGA and AMPTP Reach Tentative Agreement

The Directors Guild of America has reached a tentative agreement on a new three year contract with the Alliance of Motion Picture and Television Producers.

The press release from the DGA follows below.

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.

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.

Source: Directors Guild of America