Studios, Directors OK New Contract

Hollywood studios and directors agreed Wednesday on a new three-year contract more than six months before their current deal expires, heading off the kind of labor uncertainty that triggered Hollywood’s current production slowdown.

The two sides had been expected to reach an agreement on the deal, which is similar to the contracts studios negotiated with actors and writers this year. It does, however, include some unique clauses, including a promise by the studios to meet with Hollywood’s labor guilds on how to ease the problem of runaway production to foreign countries.

The agreement stands in sharp contrast to the 11th-hour studio negotiations with writers and actors that weren’t completed until after each contract expired.

Directors and studios sought to resolve their differences well in advance of the June 30 expiration date to prevent a so-called de facto strike like the one by writers and actors whose effects continue to plague Hollywood production in the second half of this year.

Even though no walkouts occurred before the May deal with writers and the July agreement with actors, anxiety about possible strikes prompted studios to stockpile films in advance as a precaution.

That has resulted in a sharp production fall-off that is expected to last into next year. Last month, for example, the number of days spent by productions shooting on the streets of Los Angeles dropped nearly 40% from November 2000, according to the Entertainment Industry Development Corp. permit agency.

Negotiators for both the 12,000-member Directors Guild of America and the Alliance of Motion Picture and Television Producers acknowledged that the slowdown provided an incentive to resolve their differences early.

“We were very motivated to reach a conclusion,” said director Gil Cates, who headed the DGA’s negotiating committee

Studio negotiator J. Nicholas Counter added that he believes the current slowdown shows that the uncertainty created by last-minute negotiations hurt the industry. “What we predicted would happen happened,” Counter said.

The deal between directors and studios includes an unusual clause requiring studios to convene a meeting with Hollywood’s labor guilds within six months to discuss ways to thwart runaway film and TV production to foreign countries, notably Canada.

Cates said it is significant because the studios are formally acknowledging that runaway production is a major issue.

Money issues agreed to are similar to those in the pact with actors and writers this year, including one key concession by studios that the Fox television network will pay full freight on residuals and be considered a full-fledged network by the third year of the contract. Fox had enjoyed a discount dating back to the 1980s, when it was considered a fledgling network.

Film directors also will receive a sweetener if a sequel is made of one of their movies, although details were not released on how that will be structured.

Both sides also agreed to put under one umbrella all TV contracts, regardless of whether a production is shot on film, on tape or in new digital formats. Previously, taped and filmed shows operated under separate contracts, with different rules regarding such issues as preparation time.

Directors and studios also agreed to address one major “creative issue” involving the late delivery of TV scripts, although they did not detail how they would do that.

Directors complain that late scripts hurt their ability to do their best work. Studios complain that it costs them money. A spokeswoman for the Writers Guild of America said the guild had no comment.

Members of the DGA’s national committee are expected to approve the contract in a meeting Saturday.