What the Directors Guild Will Fight for as Talks With Studios Begin

Katie Kilkenny
·8 min read

On Wednesday top negotiators for the Directors Guild of America will travel to Sherman Oaks to begin hammering out a deal with studios and streamers that is sure to be one of the most momentous in the union’s recent history.

The union is embarking on negotiations with the Alliance of Motion Picture and Television Producers at a moment when around 11,500 Hollywood scribes are on strike after their own contract talks with the business coalition collapsed. (While the directors’ and writers’ labor groups are prioritizing separate issues, there is some key overlap on agenda items like streaming residuals and data transparency.) And the DGA is starting to negotiate less than two months before its contract expires on June 30, an unusual step for the union, which in recent cycles has reached a consensus earlier as part of its philosophy that sometimes such advance deals improve worker leverage. This time around, entertainment companies were “not yet prepared to address our key issues” months ahead of the contract’s due date, the guild warned its 19,000 members in February.

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Ever since, the union has been preparing its members for a fight, with union leaders most recently sending a video message on Tuesday that acknowledged, “We know there will be conflict. The battle will test us.” The stakes are “pretty dire,” says one of several DGA members who spoke with The Hollywood Reporter in advance of negotiations, citing peers who have left the Los Angeles area due to attributes of this current iteration of the streaming era, including shorter TV seasons and lower residuals.

While the DGA has been characteristically quiet about the specifics of its proposals before talks begin, a major issue on the table is instituting a streaming residual formula that accounts for the global growth of platforms. Currently, as the guild explained to its members in an April communication, the union’s SVOD residual is “based largely on the number of subscribers in the United States and Canada,” with services with more of these subscribers offering higher residuals to members. Still, “under our current formula, no matter how many millions of global subscribers a service might have, the Studios only pay you a fraction of the domestic residual to compensate you for all of the global audiences that enjoy your work.” (The current DGA contract states that when a program is distributed on a “worldwide” basis on an affiliated or related SVOD platform, the employer pays 35 percent of the domestic SOVD residual.) The DGA has been consistently messaging that it’s looking to change that status quo, posting on Instagram in April that it wants a formula that “provides our fair share of the global growth of this industry.”

Other important items on the agenda for the union include gaining more data transparency from companies, shoring up the union’s health and pension plan, boosting wage floors, protecting contractual creative rights for directors, expanding diversity, equity and inclusion initiatives, and instituting new safety standards. “As a director, that’s one of the things that I really am concerned for,” says dual WGA and DGA member Thom Harp (The Donor Party) of the guild’s push to improve safety on sets, citing his experience working 16-18 hour days as a former production assistant and his investment in leading secure sets as a director. On long work days, “You do get paid more [in overtime], but money isn’t worth a life.” (The DGA is already backing a California bill this year that is seeking to institute a “safety advisor” pilot program on select film and television sets — and in Tuesday’s video message, co-chair of the DGA negotiations committee Todd Holland specifically said that in these talks the union is also looking to address “dangerously long workdays.”)

One emerging issue the DGA has not discussed publicly as a topline priority in these negotiations is artificial intelligence. Before their discussions broke on May 1, the AMPTP and the WGA butted heads on the latter’s attempt to regulate the use of AI in scriptwriting, with the AMPTP allegedly countering with a proposal to meet annually to discuss the developing technology (the group said earlier this month that it’s a topic that “requires a lot more discussion”). That response alarmed some members of the DGA, who now say they would like to see the issue addressed in their own talks: “One of the issues on my mind is how to achieve a balance between the positive uses of AI and the possible disruption of the job force,” writes one DGA member in an email, requesting anonymity. “We need to figure out how to keep it from taking control of us,” says another. (In a statement, the DGA told THR, “As AI continues to rapidly develop, the DGA continues to research and monitor the potential creative and economic impact of AI on directors and their teams.”)

Justine Bateman (Violet), a member of the WGA, DGA and SAG-AFTRA, believes all three unions are at a “hinge moment in our business” due to the technological shift that AI promises. “It seems like a bigger moment than making sure you’ve got your own members covered for each of the guild leadership,” she says.

How the writers’ strike could play a role in the DGA’s negotiations, or vice versa, remains an open question. When the DGA last negotiated during a writers’ strike, in 2008, it ultimately hammered out a deal on compensation for work distributed over the internet that gave the WGA a template for its own talks and helped bring an end to the 100-day work stoppage. Though specifics of the DGA’s priorities remain scarce for now, history seems unlikely to repeat itself this year, as studios and writers remain far apart on a host of very scribe-specific matters like minimum staffing sizes and durations for writers rooms.

But on some issues, the DGA and WGA are aligned, such as their mutual interests in significantly boosting wage floors and refashioning residuals norms to reflect global streaming growth. Before the WGA went on strike, the union pushed to create a new high-budget SVOD residual where foreign payment would depend on a platform’s number of international subscribers (those with more than 75 million, for instance, would pay the most, while those with fewer than 20 million would pay the least). Prior to May 2, the employers’ coalition did agree to a residual based on the number of foreign subscribers for large global streaming platforms. That exchange potentially bodes well for the DGA’s push for a residual formula that takes global viewership into account.

Data transparency is another shared issue. During its early negotiations, the WGA says it argued for a viewership-based streaming residual that would remunerate writers with successful projects and would “require transparency” on viewership data. (The AMPTP allegedly rejected the proposal and did not make a counteroffer.) “Without data transparency, we are kind of operating blind while the other side has the whole picture,” says one dual WGA-DGA member, calling the need for data transparency “one of the few things the WGA and DGA have in common.”

Even before the WGA went on strike, some in the industry began speculating that the DGA and the union that is scheduled to negotiate after it, SAG-AFTRA, could call their own work stoppage. The DGA isn’t exactly known for being trigger-happy when it comes to striking — its only one, in 1987, lasted three hours and five minutes on the East Coast and five minutes on the West Coast — and the DGA’s chief negotiator, Russell Hollander, and the AMPTP’s Carol Lombardini have a long history of working together without much public friction.

In apparent anticipation of a potential need to mobilize members fast, however, for the first time in recent history the union has set up a contract-captain system. Led by former DGA presidents Paris Barclay and Thomas Schlamme, the “outreach team” will communicate negotiations updates to members and endeavor to keep them united and engaged during talks with management. This approach echoes the WGA’s captain system, a team of hundreds of member volunteers that has organized and internally communicated with large groups of peers during negotiations and the current strike.

And on Wednesday, multiple labor-friendly politicians weighed in publicly on the DGA’s talks, including Sen. Bernie Sanders, Sen. Elizabeth Warren, Rep. Adam Schiff and Rep. Jerry Nadler. “Directors and their teams are creative forces. They deserve a share of the billions in profits they create for the global entertainment industry,” Sanders wrote. “I urge both sides to come to a fair deal.”

To Harp, who only recently joined the union, this DGA negotiation — his first — feels like it’s happening at an “inflection point.” “Some of the companies [involved] are the legacy companies that we’ve been negotiating with forever; they understand what this dance is. But places like Netflix and Amazon and Apple don’t have to deal with this in any of their other areas,” he says. “That’s why [with] this negotiation, it doesn’t matter how many times you’ve done it, I think it’s going to be different.”

The dual WGA-DGA member has a different point of view. “While the DGA is going into this with demands that try to address the ever-changing landscape of TV and film, I still believe it will be a ‘normal’ negotiation,” they say. “It’ll likely be tougher this time around than in the past, but I think they will ultimately get some hikes in minimums and eventually get a new contract that addresses the changing landscape.”

Carolyn Giardina and Kim Masters contributed reporting.

May 10, 11:22 a.m. Updated with politician messages about the start of DGA talks.

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