The Directors Guild of America has released its tentative bargaining agreement to its members after a meeting with its national board, revealing details of its four-year contract with the Alliance of Motion Picture and Television Producers.
“We entered this negotiation with three main priorities: secure our Health Plan, protect jobs and ensure that our members remain secure as AI continues to impact our industry. We succeeded in these areas and gained in many others,” said DGA President Christopher Nolan. “I am pleased to present the results of the Committee’s outstanding work to the membership for approval and ratification.”
As with its sister unions, the Writers Guild of America and SAG-AFTRA, the DGA’s health plan was a major point of discussion at the negotiating table over the past several weeks.
While the DGA Health Plan is not at risk of near-term financial insolvency like the WGA’s was before its recently negotiated infusion of $321 million in new studio contributions and pension plan reallocations, both sides were looking to negotiate a long-term deal that could help the plan withstand rising healthcare costs in the United States.
To that end, studio contributions to the health plan will increase by 2.25% in the first year of the new contract to 13.5% and another half percent in year two to 14%. Over the term of the agreement, studio contributions will increase by 24.4%, and the guild will have the option to move a half-percentage of contributions to the pension plan or to wages if the health plan is in a healthy financial state.
But like their actor and writer counterparts, DGA members will also see increased costs as part of the health plan changes, though unlike the WGA, the exact increases in premiums and out-of-pocket caps was not determined during negotiations with the AMPTP. That will be determined in later talks by the health plan trustees, which consists of members from both the guild and studios.
On the residual front, the studios agreed that if films made for a specific streaming service get moved to another platform, they must continue to pay a higher fixed exhibition residual rather than a gross-based residual. This closes a potential loophole that could be used in mergers like the potential Paramount-Warner merger, where companies that merge streaming services can cut back on residuals in an effort to reduce costs.
On artificial intelligence, the DGA and AMPTP renewed their subletter from the 2023 contract — the first deal negotiated by any union on AI — which includes language explicitly saying that the work done by their members cannot be delegated by a studio to generative AI.
The contract also grants directors control over any AI-generated footage created for a project, requires studios to disclose to directors while negotiating employment how and whether AI will be used on the project, and establishes a new employer-funded skills enhancement program.
And while the DGA had limited options in collective bargaining side to increase the number of jobs for their members, the guild negotiated a sideletter that will see the studios send their top executives to Capitol Hill to lobby for a federal tax credit alongside Hollywood’s labor unions and studio-side lobbying groups like the Motion Picture Association.
The guild is also taking measures to expand opportunities for directors, particularly those in television, to boost their careers. New guardrails have been implemented on the instances in which a person, like a lead actor, can take two jobs on the same television series. This will ensure that both veterans and up-and-coming directors can get more opportunities for employment.
Directors of TV pilots will also be guaranteed a credit that will be featured across the length of a series and will receive expanded publicity requirements, allowing guild members who direct a pilot for a hit series to use that as a springboard for their careers.
Members will have until June 25 to vote on whether to ratify the contract. If ratified, the DGA’s contract will signal the end to the first labor cycle for above-the-line unions since the 2023 WGA and SAG-AFTRA strikes, which shut down the industry for a combined 191 days.
Under new president Greg Hessinger, the AMPTP struck a more diplomatic tone than in years past, offering more generous terms in certain areas on top of record studio health plan contributions with the goal of attaining a four-year contract length instead of the usual three. To sweeten the deal, the AMPTP agreed to certain concessions that it had not been willing to discuss in previous contract cycles, such as recognizing choreographers as part of the SAG-AFTRA contract.
But one issue that the AMPTP did not budge on was revenue sharing for public-facing generative AI models, such as the one that Disney was set to launch via partnership with OpenAI that fell apart earlier this year after the AI company shut down its generative video software Sora. According to insiders, the AMPTP argued that studios had not yet figured out how to make licensing of IP to AI companies into a tangible revenue stream yet, and did not want to negotiate around hypothetical licensing agreements.
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