DGA National Executive Director Jay D. Roth, Negotiating Committee Chairman Gil Cates and AMPTP President Nick Counter upon reaching tentative agreement. click photo for larger view

"We were able to achieve this successful new agreement under difficult circumstances because we were extraordinarily well-prepared," DGA Negotiating Committee Chairman Gil Cates said. "It is a tribute to the farsighted leadership of the Guild that we could negotiate this agreement in two weeks, something that would have been impossible had we not begun our internal preparations as far in advance as we did."

In early September 2001, the AMPTP sent a letter to DGA President Jack Shea and National Executive Director Jay D. Roth indicating a desire to quickly initiate and conclude negotiations for the new DGA Basic Agreement (BA) and Freelance Live and Tape Television Agreement (FLTTA). On September 29 the DGA's National Board voted to authorize the DGA leadership to hold exploratory meetings with the AMPTP and networks to determine whether early contract negotiations were possible. An unprecedented meeting with many of the industry's top executives was then held at the DGA on November 2. At that meeting, both the DGA leadership and the AMPTP signaled the desire to avoid production slowdowns and economic uncertainty — but the DGA also emphasized that early talks would not and could not result in an agreement that fell short of successfully addressing the key concerns of its members.

"You don't start negotiations without knowing what it is you want to accomplish," Roth explained. "You go in with proposals, some of which are musts, some of which are maybes, and some of which are reaches, but you never go in without a clear set of goals. Then, if you accomplish what you set out to do, you've made a good deal. Whether you make it seven months before your contract expires or on the eve of a strike, ultimately it doesn't matter. The only thing that matters is the deal you've made."

"It was truly remarkable to see the cohesion on the part of our Negotiating Committee," Cates added. "We had members from every category, members who flew in from New York and spent two weeks with us, members who cared as much about the future of the Guild as they did their own issues. We also had the scores of members who worked on the Contract Restructuring Committee, the Bi-council Committee, and all the other various Guild councils and committees. These devoted members spent many, many hours of their lives over the past several years to ensure that we were incredibly well-prepared for these negotiations, and the remarkable deal we were able to reach is a tribute to all of them."

	From left: Director Steven Soderbergh, DGA President Jack Shea, DGA First Vice President and Creative Rights Co-chair Martha Coolidge, directors Garry Marshall, Todd Holland and Penelope Spheeris at an early DGA negotiations meeting. (Photo: Ryan Miller/Capture Imaging). click photo for larger view

The decision to explore early negotiations was based in part on the AMPTP's commitment to seriously consider the blended contract issues. "We actually presented our blended contract proposal to the AMPTP in June," said Roth. "By doing so, we in effect gave the producers six months to study the proposal before the beginning of formal negotiations. This, in turn, went a long way toward enabling us to conclude negotiations in an expedited manner."

As soon as the 1999 negotiations were completed, the Guild's leadership and staff began working in earnest toward establishing the framework

of a blended contract. A Contract Restructuring Committee was set up, chaired by John Rich. This Committee then referred the important below-the-line issues to a 21-member Bi-council Committee comprised of AD/UPMs and AD/SMs. The leadership of this Committee was initially set up to rotate among the category representatives, with 1AD/UPM Bob Lewis and Associate Director Barbara Roche assuming leadership in the final months. This Committee met regularly to hammer out the details of the blended agreement, and in December 2000 made its recommendations to the DGA's National Board. The Board approved the recommendations of the Bi-council Committee, at which point the Contract Restructuring Committee was reactivated, now chaired by Lee Shallat Chemel. This Committee put all the pieces together and took the proposed new blended agreement back to the DGA's National Board, which approved it in March 2001.

	From left, back row: Gil Cates, Thomas Carter, Warren Adler, Ron Underwood, Yudi Bennett, Steven Soderbergh, Jon Turteltaub, Bob Butler, Jack Shea, Martha Coolidge, Garry Marshall and Todd Holland. Front row: Jay D. Roth, Kim Kurumada, Burt Bluestein, Barbara Roche and Jonathan Mostow. (Photo: Ryan Miller/Capture Imaging) click photo for larger view

Another significant improvement gained in the negotiations was the increase in residuals secured by the Guild. In 1999, the DGA, along with SAG, AFTRA and the WGA, received a contractual agreement from the studios and networks that they would participate in a residuals study. (The WGA later decided not to participate in the study with AFTRA, SAG and the DGA.) As part of this study, the studios and networks pledged to open their financial books so that the Guilds could better quantify the economic aspects of TV programming. The DGA formed a Residuals Study Oversight Committee, co-chaired by Hal Cooper and Mel Damski, retained the legal consulting services of Ken Ziffren, and hired the Monitor Company to design and create the study. Once the study was set up, the Guild brought in the financial analysis firm of Gerard, Klauer, Mattison to help analyze the data collected from the studios' distribution and production arms. This data included economic details to which the DGA had never previously had access. The residuals study has been ongoing, and helped establish the residual pattern set in this round of Guild negotiations.

In addition to the issues regarding the blended contract and residuals improvements, for the first time ever the DGA secured a payment of $20,000 for feature film directors when a sequel is made to one of their films. This is particularly significant in that it effectively recognizes the contribution made by a director as a creator of his or her film.

	DGA member Christian Von Tippelskirch, DGA Assistant Eastern Executive Director Fern Wakneen and DGA Second Vice President Larry Auerbach. click photo for larger view

Additionally, a mechanism has now been put into place to better quantify and police the problem of late script delivery on prime time dramatic programming.

On December 15, 2001, the DGA National Board voted unanimously to recommend ratification of the new three-year collective bargaining agreements between the DGA and the AMPTP. Details of the agreement have been sent to DGA members for their scrutiny and approval.

	DGA National Executive Director Jay D. Roth, AMPTP President Nick Counter and DGA Negotiations Committee Chairman Gil Cates. click photo for larger view

Among the highlights of the terms of the agreement are:

WAGE INCREASES*

• Minimum salaries and residual base rates (except for directors of network prime-time and daytime serial programs) will increase by 3.5% per annum 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 and daytime serial programs (including residuals base rates) will increase by 3.0% per annum in each year of the Agreements, effective July 1, 2002, 2003 and 2004. This amounts to a compounded increase of 9.27%.
  

*(DGA residuals in 2001 will total approximately $180 million.)

	Gil Cates, Martha Coolidge and Jay D. Roth at DGA Board Meeting. (Photo by Joe Coomber) click photo for larger view

• 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 90% rate until January 1, 2005. In 2001, Fox residuals amounted to $1,261,000. In 2004 they will amount to $1,994,000, an increase of 58% for DGA members
  
• Effective July 1, 2004 Fox Broadcasting Corporation will be considered a network for all purposes.
  

• The 2002 Contracts add a fourth level of residual payments. In previous contracts, there were three separate levels: an initial residual payment and two additional payments to be made when certain levels of Distributor's Foreign Gross receipts were exceeded. Once those three payments were made, no more followed, regardless of the profitability of the show. The fourth level of residual payments added by the 2002 contract extends into perpetuity, and consists of 1.2% of the Distributor's Foreign Gross receipts in excess of a certain amount based upon the length of the program.
  

• The improved residual schedule for programming made for basic cable gains more money faster for directors by increasing residuals for runs 2–5 by 40%. All subsequent runs have gained increases as well at an overall rate of 14% across the board.
  
  

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 by the same company, utilizing the same characters, etc. This is the first time such a concept has been achieved in the DGA Basic Agreement.
  

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

RESIDUALS STUDY

• The Employers and the DGA agree to continue to participate, together with the Screen Actors Guild, in the Industry Residuals Study.
  

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. This is the first time such a provision has been included in the DGA contracts.
• The AMPTP will, as soon as practical, consult with DGA representatives for the purpose of issuing a safety "checklist" in connection with long hours, to the Employers it represents. This "checklist" 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.

The agreement applies to free television dramatic programs intended for initial broadcast on prime-time, made-for-pay/home video dramatic programs of a type made for network prime time and basic cable "high budget" dramatic programs one half-hour or more in length.

The Terms of the Interim Settlement Agreement are:

• Any prime-time dramatic program shot "single-cameraS style will continue to be governed by the terms of the Basic Agreement, no matter how the images are recorded.
  
• Any existing multi-camera series now recorded on film will continue to be covered by the BA regardless of any technological change in production of the series.
  
• Any existing multi-camera series now recorded on tape or broadcast live shall continue to be covered by the Freelance Live and Tape Television Agreement.
  
• All other multi-camera programs or series covered by this agreement will be governed by the BA, with the following provisions:
  
• DGA has UPM jurisdiction on all productions.
  
• Directors' minimum compensation will be according to the BA. Directors' residuals will be increased an average of 20% more than FLTTA rates.
  
• The duties of First Assistant Directors, Second Assistant Directors and Associate Directors/Technical Coordinators employed on programs or series produced under this Interim Agreement are specifically defined.
  

A primary issue in the creative rights discussions involved the industry-wide problem of late script delivery in television, which impacts production costs and the ability of TV directors to do their jobs. The Guild and the AMPTP agreed on a process to address this situation:

• Beginning September 30, 2002, the Employer will provide information to enable the Guild to monitor timeliness of script delivery on all dramatic series.
  
• 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 showrunners, network and production executives, individual writers, and/or the Writers Guild of America.
  
• The AMPTP and DGA agreed to an arbitration to determine the appropriate relief for late script delivery.
  
• The Employers have also agreed to meet with the DGA's TV Creative Rights Committee to review progress on this issue.
  

The Creative Rights Committee also discussed concerns regarding the transmission of images (other than promotional material and dailies) from the set or location. It was agreed that the Guild will bring any instances of abuse to the Creative Rights Committee, which will address the situation promptly.

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