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WGA STRIKE UPDATE: DGA, AMPTP Reach Deal

Will Directors Guild of America-Alliance of Motion Pictures and Television Producers Pact Prompt Return to Table by Writers Guild of America? 1/18/2008 03:30:00 AM Eastern

The DGA deal is done, and now the waiting begins to see what it means for the WGA: As expected, the Directors Guild of America and the Alliance of Motion Pictures and Television Producers came to an agreement, which happened Thursday after six days of talks.

Now the entertainment industry will see if the DGA deal gets the Writers Guild of America and the AMPTP back to the table. The WGA has been on strike since Nov. 5, and the sides have not met since early December.

Many industry insiders have hoped that a DGA-AMPTP would get the writers and conglomerates back to the table. In recent weeks, multiple factions of writers have developed, with some wanting the DGA deal to get the WGA back to the table, while others strongly believe that the WGA should hold out for exactly what it wants.

"Of the 307 labor agreements the AMPTP has negotiated since 1982, this new DGA-AMPTP pact surely dealt with some of the most challenging issues we've ever faced," AMPTP president Nick Counter said in a statement. "The formal negotiations that led to this agreement were preceded by weeks of tough and candid informal discussions. In the end, though, both parties were determined to focus on the core issues that are most important to all of us, and the result is an agreement that breaks important new ground for our entire industry."

“We will obviously look at the deal very closely,” WGA West president Patric Verrone said in an interview Wednesday, one day before the DGA deal was announced.

Late Thursday, the WGA West and East issued the following statement: "Now that the DGA has reached a tentative agreement with the AMPTP, the terms of the deal will be carefully analyzed and evaluated by the WGA, the WGA’s negotiating committee, the WGAW board of directors, and the WGAE council. We will work with the full membership of both guilds to discuss our strategies for our own negotiations and contract goals and how they may be affected by such a deal."

The statement continued, "For more than one month, we have been urging the conglomerates to return to the table and bargain in good faith. They have chosen to negotiate with the DGA instead. Now that those negotiations are completed, the AMPTP must return to the process of bargaining with the WGA. We hope that the DGA’s tentative agreement will be a step forward in our effort to negotiate an agreement that is in the best interests of all writers."

The terms of the three-year deal that Verrone and company will review include increases in wages and residual bases for each year of the deal, DGA jurisdiction over programs produced for Web distribution, a new residual formula for electronic sell-through that doubles the current rate and a new residual rate for ad-supported streaming on the Web.

The CEOs of the AMPTP released the following statement Thursday, offering to open informal talks with the WGA:

“The agreement between the Alliance of Motion Picture and Television Producers and the Directors Guild of America establishes an important precedent: Our industry's creative talent will now participate financially in every emerging area of new media. The agreement demonstrates beyond any doubt that our industry's producers are willing and able to work with the creators of entertainment content to establish fair and flexible rules for this fast-changing marketplace.”

The AMPTP statement continued, “We hope that this agreement with DGA will signal the beginning of the end of this extremely difficult period for our industry. Today, we invite the Writers Guild of America to engage with us in a series of informal discussions similar to the productive process that led us to a deal with the DGA to determine whether there is a reasonable basis for returning to formal bargaining. We look forward to these discussions and to the day when our entire industry gets back to work.”

DGA negotiating chief Gil Cates called the deal “groundbreaking and substantial,” adding, “The gains in this contract for directors and their teams are extraordinary and there are no rollbacks of any kind.”

A DGA press release outlined several details of the deal:

• Jurisdiction: Programming produced for the Internet (both original and derivative) will be directed by DGA members and their teams except for 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 (Paid Downloads): The deal more than doubles the EST residual for television (to 0.7% of distributor’s gross) and increases the feature-film residual by 80% (to 0.65%) over the rate currently paid by the employers, above a certain number of units downloaded. Below that number, residuals remain unchanged.

• Ad-Supported Streaming: After a 17-day window for free promotional streaming, the companies must pay 3% of the residual base (approximately $600 for network primetime one-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. However, during a program's first season, the 17-day window is expanded to 24 days to help grow viewership.

Other deal points include an annual wage bump of 3% for primetime dramatic shows and daytime serials and 3.5% for all other covered programming; an increase in director’s compensation on high-budget basic cable for series in the second and subsequent seasons; and annual residual increases of 3% for primetime shows and 3.5% for all other covered programming.

For full coverage of the strike, click here.

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