The DGA Agrees to a Huge, Not-Actually-A-Big-Deal-At-All Deal
The Most Important Story of the Week For 7-Jun-2023
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When I saw the news that the DGA had announced a deal with the AMPTP—though it still needs to be ratified by the membership and we need to see the actual terms—my exact thoughts were, “Hoooooooo boy, this is big news!”
I was also fairly surprised, since I anticipated the DGA would use up all their negotiating time. (Since that’s what negotiators do. Normally.) The town had (seemingly) been abuzz for the last six weeks that all the unions were finally rowing in the same direction to work together against the studios. Sure the DGA “never” strikes, but this time could be different.
So I expected to see headlines Monday morning everywhere…
…instead the biggest news story of the week was The Idol on HBO? And the latest social media inspired “controversy” it generated? That was more newsworthy than the DGA averting this strike? Admittedly, Deadline at least led with the DGA strike in their “breaking news” header. But still only barely.
The DGA announcing a deal with the AMPTP is obviously the “most important” story of the last two weeks, so let’s dive in to figure out why I think this is a bigger deal than the trades. That, plus thoughts on the latest price increases in streaming, the launch of “Max”, and Netflix password sharing.
Most Important Story of the Week - The DGA Announced a Deal with the AMPTP
Like the Hollywood trades, the WGA (both its representatives and members on Twitter) didn’t think that the DGA signing a deal wasn’t a very big deal, which you’d expect.
But imagine the opposite scenario. Imagine a world where the DGA shuts down talks early because they don’t think a deal will happen. In this scenario, I think we would have seen a lot of headlines like “The DGA Goes on Strike: This is Great News for the WGA!” right?
This always sets my Spidey sense tingling. During the early days of the streaming wars, I think a few analysts sometimes approached a certain streamer—*cough* Netflix *cough*—with a “heads they win, tails the traditional studios lose” mentality. Is Netflix binge-releasing shows? Yep, because that’s cause they’re smart. Are they releasing shows is smaller batches now? Yep, that’s because that’s even smarter. What if they go weekly? Then they’ll be smarter still.
This DGA news reminds me of that. If the DGA had gone on strike, it would have been huge news and a coup for the writers. If they don’t go on strike, it means nothing and the writers are if anything in a stronger position. (Fine, no one made that last point.)
But let’s be fair: the writers may not be entirely wrong. In particular, the DGA going on strike could have had an asymmetric impact.
I toss around “asymmetry” as a term a lot, and it’s probably used a bit incorrectly in some cases, but in this case, it actually applies. (Not to go too back-to-basics, but if something is “symmetric”, we’d expect the same impact on each side. If it is asymmetric, the impact is uneven.)
In this case, yes, the DGA going on strike is asymmetric, because the moment the DGA announces that they are walking off sets, all production halts immediately, including many reality series. Yes, the WGA has been very successful at picketing productions, and the Teamsters in particular don’t cross picket lines, so productions have been halted or shut down across town. But a DGA strike would go further and shut the town down immediately, including lots of reality television. Plus, the AMPTP would have had to negotiate with two recalcitrant unions, not just one. That just makes things harder.
Of course, that makes the impact of losing the DGA as a striking partner, if anything, a bigger deal to me. Indeed, I might actually be wrong that this is asymmetric in the first place. In particular, the DGA just set a template that the other unions could follow. The Screen Actors Guild can look at what the DGA negotiated and say, “Hey, give us that.” And then some writers may (quietly) make the same points to the WGA.
So what comes next? Well, first the WGA and AMPTP will continue to hold out. Until the two sides actually start talking again, very little progress can be made. Meanwhile, the WGA is now going to full-court press the actors (SAG-AFTRA) because again, if they walk out all scripted production immediately stops.
Interestingly, the majority of the trades have focused on the fact that SAG membership voted to give their negotiating committee authorization to strike if a deal is not reached—which is NOT the same thing as going on strike—by calling it a very, very, very big deal. The coverage framed the SAG vote as a huge coup for the WGA. So how is the DGA settling not a big deal, but the SAG-AFTRA authorizing a strike (if need be) a big deal?
Either way, as we have since May, we’ll wait to see if the WGA and AMPTP start negotiating again, which likely won’t happen until the end of the month.
Some Other Notes:
I’m fairly hesitant to celebrate when I got a call “right”—besides my regular column on what I got right and wrong—but when I last wrote on the WGA strike, I modeled a scenario where the WGA and AMPTP “met in the middle” for annual pay increases. That meant raises of 5%, 4% and 3.5 (Half way between the WGA and AMPTP’s demands.) And basically yeah the DGA met right in the middle with their increases where I thought/think the WGA will eventually meet. In this case, I think this is just how typical negotiations work.
Will I compare/model the DGA’s deal to the writer’s demands? Maybe, but that’s another big data task to swallow. (I don’t know the DGA releases as much data as the WGA, who already doesn’t release much.) If folks want me to, then I will.
The biggest difference between the DGA and WGA probably boils down to the extra staffing requirements and guaranteed weeks. The DGA had a few deal points like this (for example, more pre-production days for feature directors and shorter workdays), but the extra staffing commitments on writer’s rooms could have impacts that are multiples larger in cost. That’s still the biggest sticking point.
What about AI? This point feels somewhat moot to me. Writers are much more likely to be replaced by AI in AI’s current “large language model” state. The directors won’t be under threat until AI can replace the entire production process, which still feels years away. Maybe the DGA will strike on that next time. (Yes, the DGA has some language on AI, but it did not seem very strong or prohibitive.)
The DGA had two other big wins. First, they got a 76% expansion on foreign residuals. But as I’ll warn until I’m blue in the face, I’m more worried that this means less shows will be streamed globally than that directors will see a big increase in paychecks. Though the upside could be a more rational film market, as streamers only sell shows into territories where they’ll make their money back.
Second, the DGA also expanded its member base into variety and reality TV on streaming. This also applies to “AVOD” or ad-supported viewing. This seems pretty smart to me. I think all of the unions should work to increase their membership!