Hollywood directors avert strike after reaching contract deal with studios

Hollywood studios have reached a tentative contract deal with the union representing directors, easing fears of a shutdown as the industry contends with a writers strike and prepares to enter labour negotiations with screen actors. 

The Directors Guild of America said it had reached agreement with the Hollywood studios early on Sunday over some of the most contentious issues facing the industry, including streaming royalties and protecting jobs from advances in artificial intelligence. 

“We have concluded a truly historic deal,” said Jon Avnet, chair of the DGA’s negotiations committee.

The agreement secured a “substantial increase” in royalties for dramatic programmes on streaming services, the 19,000-member DGA said. The gains represented a 76 per cent increase in foreign residuals for the largest streamers, which translated into gains of $90,000 for one-hour episodes over three years. Those royalties will be determined based on the streaming service’s number of international subscribers.

The two sides also agreed that “generative AI cannot replace the duties” performed by directors, the DGA said. The union will vote on the contract proposal on Tuesday. 

The move comes as the strike by the 11,500-member Writers Guild of America stretches into its second month after failing to reach a deal with the Alliance of Motion Picture and Television Producers, a group that represents Hollywood studios and streamers.

Like the directors, some of the writers’ biggest concerns revolve around streaming royalties and the use of AI. The actors union, SAG-AFTRA, is due to enter talks with the studios later this week, with AI also expected to be a focus of discussions.

In recent weeks, studio executives have expressed hope that the directors could reach a deal, which would then serve as a template for agreements with the writers and actors. The writers union has no talks scheduled with the studios.