The new Contract includes an historic Interim Settlement Agreement (ISA) that addresses the changes in television production resulting from the adoption of new technologies. Because the DGA wanted the terms of the ISA to be in place before the advent of the new pilot season, the ISA went into effect upon ratification. The new Basic Agreement (BA) and Freelance Live and Tape Television Agreement (FLTTA) go into effect July 1, 2002.

The new Agreement also includes improved residuals in free television, made-for-basic-cable and foreign free television markets. In addition, for the first time, directors of feature films will receive a bonus payment when a sequel is made based on their film. These and other highlights of the new Agreement are detailed as follows:

The Interim Settlement Agreement became effective upon the February 6, 2002, ratification by the DGA membership. The "blended contract" deals with new technology related issues that could not be addressed under the terms of the BA and FLTTA, both of which recognize only film and tape as a means of recording.

The ISA impacts your DGA clients working on new multi-camera and single-camera prime-time dramatic series on a "going forward" basis. The key features of the ISA include the following:

• Any single-camera prime-time dramatic program will be governed by the terms of the BA, no matter how the images are recorded—in the past, projects shot on film were covered under the BA while those shot on tape came under the FLTTA.
  
• Any existing multi-camera series now recorded on film will continue to be covered by the BA regardless of any technological change in the production of the series.
  
• With the exception of any existing multi-camera series now recorded on tape or broadcast live, multi-camera programs or series covered by this agreement will be governed by the BA, with the following provisions:
  

*Directors' minimum compensation will be according to the BA, and
*Directors' residuals will be increased an average of 20% over FLTTA rates.

WAGE INCREASES

• With the exception of directors' rates on network prime-time programs and daytime serials, all minimum salaries and residuals base rates will increase by 3.5% in each year of the agreements, effective July 1, 2002, 2003 and 2004. This amounts to a compounded increase of 10.87%.
  
• Directors' initial minimums for network prime-time programs (including residuals base rates) and daytime serials will increase by 3.0% in each year of the Agreements, effective July 1, 2002, 2003 and 2004. This amounts to a compounded increase of 9.27%.
  

RESIDUALS

• MADE-FOR-BASIC-CABLE: The improved residuals schedule for programming made for basic cable will generate more money faster for directors by increasing residuals for runs 2 through 5 by 40%.
  
• MADE-FOR-PAY-TELEVISION: The system for payment of residuals in Foreign Pay Television will change from a subscriber-based approach to a payment of 2% of gross receipts. In Domestic Pay Television we have preserved our existing lucrative subscriber-based formula, but the percentages will be reduced starting in year five. We expect this will extend the commercial life of pay television product.
  
• HALF-HOUR SYNDICATED PROGRAMS: Residuals for a half-hour series, which is syndicated in markets representing 50% or fewer of U.S. television households, will be paid at 20% of the base rate for syndication residuals. If the program is further syndicated and exceeds 50% of U.S. television households, full syndication residuals rates will apply.
  
• FOX BROADCASTING: Effective July 1, 2002, the residuals for programs broadcast on Fox Broadcasting Corporation will be 80% of the residuals for programs broadcast on ABC, CBS or NBC. This number will increase to 90% effective July 1, 2003, and to 100% effective July 1, 2004. Reruns of programs produced in 2003 will remain at the 90% rate until January 1, 2005. Fox residuals for DGA members in 2004 will amount to an increase of 58% over Fox residuals in 2001. Effective July 1, 2004, Fox Broadcasting Corporation will be considered a network for all purposes.
  
• FOREIGN RESIDUALS FOR TELEVISION PROGRAMS: The 2002 Contract adds a fourth level of residuals payments. In previous contracts, there were three separate levels: an initial residuals payment and two additional payments to be made when certain Distributor's Foreign Gross amounts were met. Once those three payments were made, no more followed, regardless of the profitability of the show. The fourth level of residuals payments added by the 2002 Contract provides for payment of 1.2% of the Distributor's Foreign Gross in perpetuity above the specified amounts of Gross. This provision is similar to those negotiated by the WGA and SAG in their new agreements.
  
• RESIDUALS STUDY: The Employers and the DGA agreed to continue participating, together with SAG, in the Industry Residuals Study.
  

THEATRICAL SEQUEL PAYMENTS

• The Director of a theatrical motion picture based on an original script will receive a payment of $20,000 if a sequel is produced, utilizing the same characters, etc. This is the first time such a concept has been achieved in the DGA Basic Agreement.
  

DGA HEALTH PLAN

• The Trustees of the DGA–Producers Health Plan have the authority to divert up to 0.5% of the salary increase effective July 1, 2004, if they determine that such an increase is needed to maintain the level of benefits in existence on July 1, 2002.
  

SAFETY

• When members of the shooting crew have worked 16 hours from crew call, the First Assistant Director may call a meeting to discuss safety issues involved with the continuation of production.
  
• The AMPTP will, as soon as practicable, consult with DGA representatives for the purpose of issuing a safety "check list" to the Employers it represents. This "check list" should be distributed to Employers on or before February 15, 2002.
  

EQUAL EMPLOYMENT OPPORTUNITY

• Each Employer agreed to designate one or more high-level creative, production or programming executives to meet on an individual Employer basis at least once per year with designated representatives of the DGA to discuss how to improve opportunities for women and other minority members of the Guild in all categories.
  

RUNAWAY PRODUCTION

• No later than January 1, 2003, the AMPTP will convene a meeting with Employer representatives and representatives of the DGA, SAG, WGA, IATSE, the Teamsters, AFTRA and other affected unions to discuss the problems of "runaway production" and ways of resolving or mitigating these problems.
  

As you may already know, as compared to the FLTTA, the BA guarantees television directors much stronger and more enforceable protections of their creative rights, such as the right to a director's cut, designated cutting time, consultation rights, etc. We are proud to announce that perhaps the most significant achievement of the new contract is its guarantee of BA creative rights for directors of all prime-time dramatic productions, including digital and videotape productions.

Other highlights of the Creative Rights Agreement include:

LATE SCRIPT DELIVERY

• For dramatic series that begin principal photography on or after September 30, 2002, the Employer will provide the information to enable the Guild to monitor the timeliness of script delivery.
  
• The Employers will meet with DGA representatives on a company-by-company basis to consider solutions to the problem of late script deliveries. These meetings may involve show runners, network and production executives, individual writers, and/or the Writers Guild of America.
  
• The Employers have also agreed to meet with the DGA Television Creative Rights Committee to review progress on this issue.
  
• The AMPTP and DGA agreed to an arbitration to determine the appropriate relief for late script delivery. If the arbitrator rules in favor of the DGA, a sliding scale has been set up under which, after a certain number of late script deliveries on a series, the Employer will make payments to the Motion Picture and Television Fund.
  

IMAGES FROM THE SET

• The Creative Rights Committee and the Producers discussed concerns regarding the transmission of images (other than promotional material and dailies) from the set or location. The DGA and its Creative Rights Committee will monitor this situation on an on-going basis and will promptly bring any instances of abuse to the attention of a show's producer so that redress can be made.
  

For more information on the Interim Settlement Agreement and the changes in the economic and creative rights of DGA members, please click here to visit the Contract Ratification Info Page

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