DIRECTORS UNION : GUILD CUTS LOW-BUDGET MOVIE RATES

In an effort to check the epidemic of non-union film making both in Hollywood and on location, the Directors Guild of America is slashing its rates for low-budget movies.

In a new plan beginning today, the union will reduce the up-front pay for directors, assistant directors and unit production managers by 50% for movies that cost less than $1.5 million, and by 40% for feature films that cost between $1.5 million and $2.5 million.

The guild characterizes the plan as “an unprecedented move for the motion picture industry.”

The balance of the salaries, plus a 10% premium, will be due only if the movie breaks even, which the guild figures can happen after twice the cost of the film is recovered by the producer.

“The time has come to recognize the problem that there are a lot of productions out there that are not using our people,” Michael Franklin, national executive director of the guild, said Monday. “Non union films are increasing. We have to start coming to grips with this.”

No reliable figures are available for the number of non-union movies made each year, but union officials agree that the total is steadily rising.

(The only valid indicator for independent production is the number of movies rated by the Motion Picture Assn. of America’s Classification & Rating Administration. It rated 146 films from independent distributors last year, as opposed to 167 films from major studio distributors. Many of the independent movies were made by non-union crews.)

Especially disturbing to the major unions, including the International Alliance of Theatrical and Stage Employees, the Screen Actors Guild, the Writers Guild of America and the International Brotherhood of Teamsters, is the proliferation of non-union movies that are acquired for release by major studio distributors, or by smaller companies such as New World Pictures.

These deals, called negative pickups, enable the studios to acquire movies made for less than $5 million that would cost two or three times that if fully staffed by union personnel. The result, union leaders acknowledge, is that many of their members are working more on non-union films than on sanctioned productions.

Franklin said that the proposal has been in the planning stages for almost 1 1/2 years, and was presaged by a similar guild arrangement early last year with Cannon Films when its movies were being released by MGM/UA Entertainment Co.

The new proposal will be available to any film maker who has signed a contract with the Directors Guild, Franklin said, including the major movie studios.

Several studio executives reached this week said that they would reserve comment on the union plan until they could study it, although one privately questioned whether the guild’s $2.5-million ceiling was realistic. Few studio movies cost as little as $2.5 million, of course. A few recent films, such as “Police Academy” ($3.9 million) and “Purple Rain” (an estimated $6-million production) might have benefited from the directors’ new plan, but the primary appeal of the new plan should be to independent film makers.

Directors Alan Rudolph (“Choose Me”) and John Sayles (“Brother From Another Planet”) both recently made movies that cost less than $1 million. In a recent interview, Sayles said he had to resign from the Directors Guild because he could not afford to pay his own guild-mandated salary, plus that of an assistant director and unit production manager, from the $750,000 budgeted for “Brother.”

“This will give film makers more leeway,” Franklin said. “Maybe it will set an example for some of the other unions to do this, too. We’d like to see that happen.”

A spokesman for the international alliance of film workers declined comment on the proposal until it could be studied. Spokesmen for the writers and actors could not be reached Monday.

The most controversial part of the directors’ proposal will come in the determination of when a film breaks even. Rather than computing it on the basis of the revenues received by the movie’s distributor from its share of ticket sales, the guild is basing its break-even calculation on all the money returned to the producer by the distributor, and from sales to network and cable television and the home video market.

In other words, the remainder of the director’s salary will have to come from the money that’s left after all the distribution expenses, including prints of the movie and advertising costs, plus a distribution fee (usually between 30% and 40%), have been deducted.

How can the guild be sure the accounting is accurate? “We’re going to have the right of audit,” Franklin explained. “The production costs will be certified by the company, and we have a degree of protection because we have our own member (the unit manager) working on the budget of the picture.”

Franklin said that the guild will pay for an accounting audit of the money made by a movie under the proposal, but if the audit reveals that money is due the guild’s members, the producer will have to bear the cost of the audit.

The determination that a film will have to make twice what it costs before it “breaks even,” and the imposition of the additional 10% surcharge, came from the guild’s beliefs that many of its members working on low-budget movies will end up making only half their usual salaries.

“A lot of our guys will never get it all,” Franklin said. “But something had to be done. This low-budget film proposal is a first in our industry. It’s good for all film makers.”