Blueprint 26: What the DGA Actually Closed

Reid Mercer: Welcome back to Blueprint. I'm Reid Mercer, joined as always by Grant, and today we are sitting in the middle of something that doesn't happen often. Three above-the-line guilds, three deals, all wrapped inside of two months. Grant: WGA in April; SAG-AFTRA in May; and the DGA ratification vote closes today, June twenty-fifth. That's the whole above the line cycle done. Reid Mercer: Four year terms, all three. Grant: All three. Studios pushed for five, didn't get it. Reid Mercer: Didn't get it." And DGA president Christopher Nolan-yeah, that Christopher Nolan-sent the member memo himself calling the committee's work "outstanding." Bold word choice when your members are still casting ballots. Grant: Nothing boosts Yes votes like a letter from the guy who made Oppenheimer. Reid Mercer: Right? Okay, so three things we're getting into today: the health plan math, the DGA put a number on those contribution increases, and it is not a small number. Grant: Twenty-four percent range. We'll dig into whether that actually stabilizes the plan or just delays the conversation. Reid Mercer: Then the AI language, Deadline called the directorial authority clause meaningful. I want to put that to the test. Notice rights aren't revenue; we'll get there. And then, the stuff nobody's really talking about: multi-hyphenate guardrails, the overseas directing bulletin, a federal tax credit side letter where studios agree to lobby alongside the Guild—that last one is either clever leverage or a press release with a signature on it. Grant: The math on commitment to lobby is roughly zero until a bill moves. Reid Mercer: Which is exactly the argument. And then we close by zooming out. What does all of this mean when IATSE sits down in twenty twenty-seven? Grant: That's the one I want to get to. Reid Mercer: All right, the cycle's almost closed. Let's follow the money and find out what actually got won. Okay, so the scoreboard on this 2026 labor cycle. WGA went first, ratified in April at 90.4%. SAG-AFTRA closed in May, and now the DGA ratification vote wraps today, June 25th. Three guilds, all four-year deals, current contract expiring June 30th. Speaker 3: Mm-hmm. Reid Mercer: That's a remarkably clean finish. Grant: Relatively clean. Deadline reported the board voted unanimously to recommend ratification—that's Russell Hollander presenting the deal to the board after eighteen months of preparation. When you see unanimous board votes, it usually means the internal opposition got managed early. Reid Mercer: Or that the deal was actually good. Grant: Or that. But read the four year term—that's the part I keep coming back to—three guilds, all accepted four years. Studios originally pushed for five. Deadline confirmed it. Studios wanted four, landed on four, and Deadline noted the WGA leadership wasn't keen on a longer deal going in. The AMPTP president, Gregory Hessinger, pushed them across. So the studio's got longer stability. The Guild's get? What, exactly? Fewer negotiation cycles and a period of maximum disruption. Reid Mercer: That framing cuts both ways though. You can also read it as "4 years of locked in contributions during a period when every Guild health plan is bleeding." The WGA plan got three hundred and twenty one million dollars from studios to stabilize it. Different problem than the DGA's situation but same likely logic. That's the thing: the DGA's health plan wasn't at near term insolvency the way the DGA Speaker 4: a's. Grant: the WGA's was) lost thirty eight point eight million in twenty twenty four, four point six million in twenty twenty three-serious, but not emergency level. So the DGA didn't need a cash infusion; what it needed was a contribution rate increase that compounds over four years, which is a structurally different ask. Right—and according to Yahoo's reporting on the deal details, the DGA secured what the Guild called the largest employer health health plan contributions Reid Mercer: Wow. Grant: in the plan's history. Reid Mercer: That's a headline number. The actual percentage, what it means for members out-of-pocket costs, that goes to the health plan trustees to finalize. The members don't know those numbers yet. Grant: And Christopher Nolan's letter to members which Deadline published, list health plan, jobs, and AI as the three main priorities, in that order. Reid Mercer: So the DGA president and director of Oppenheimer is negotiating labor. labor contracts? That's a sentence I didn't have on my bingo card. Checks out, though. The man understands long timelines. Okay, but the health plan contributions are the largest in history, and still nobody knows what members will actually pay. So what did the guild prioritize getting right? The employer's side of the ledger or the member's side? That's the number that actually lands in someone's wallet. So the numbers. Deadline reported that DGA locked in a 24.4% total increase in employer health contributions over the four-year term. But Guild's calling it the largest contributions in plan history. Grant: That's a real headline, but I want the unit economics behind it, because 24.4% over four years sounds big until you ask, big compared to what? Reid Mercer: Yeah, the baseline matters, and Variety laid out exact... Exactly why the DGA situation is structurally different from the WGA's The DGA health fund lost $38.8 million in 2024, $4.6 million the year before, painful, but not near near terminal solvency. The WGA was basically running out of runway. Grant: Right. The WGA came in with the hair on fire. Four years of deficits averaging around $50 million a year. Reserves almost gone. Gone. That's why the studios agreed to fork over $321 million-a cash infusion, direct bailout. Reid Mercer: The DGA didn't need a bailout, so instead of a lump sum they got a contribution rate increase. Different problem, different fix. Grant: Follow the math on that. My issue is what happens next, because according to the BAA, the exact premium increases and out-of-pocket cap changes the stuff members actually feel in their wallets-that wasn't decided in AMPTP negotiations. That goes to health plan trustees. Reid Mercer: That's a structural thing. The trustees, half guild, half studios-they finalize those numbers separately. Grant: Okay, but is that process or is that kicking the can? Because members ratifying this deal right now don't actually know what their premiums are going to be. Reid Mercer: That's fair, and I don't think the guild would love me saying this, but there's a real gap between the headline, Largest Contributions in Plan History, And the actual member wallet question, which is still open. Grant: So the Guild secures Reid Mercer: Purity of record number that unlocks a separate negotiation that members don't get to vote on-that deal taught me a lesson: always read the second page. Grant: Yeah, yeah, the press release leads with the win; the trustees meeting is where it gets real. Reid Mercer: And the money, honestly, that was the easy part. Both sides had an interest in stabilizing the health plan. Grant: Which is why AI is where this gets interesting-the studios drew a hard line, and what the DGA actually walked away with on that front- is a whole different conversation. So, the money question out of the way, now comes the one where the studios didn't flinch. Reid Mercer: AI And this is where I get skeptical fast. Grant: Okay, so here's what Deadline actually reported: the new agreement confirms (and this is contract language) directorial authority over AI generated footage, treated like footage from a camera, meaning it's the director's call. Reid Mercer: I'll give them that-that's enforceable text. Grant: That's not nothing, Grant. A studio can't hand a director a bunch of AI generated shots and say: "Cut around it." The director controls it. That's creative authority on paper. Reid Mercer: On paper, yes; but look at what's sitting next to it transparency provisions. Studios have to disclose if a job involves AI. Notice and meeting rights if member work gets licensed to AI It's to train a public generative AI model and a skills enhancement program, Grant: which you hate. Reid Mercer: A studio funded program to teach directors how to use tools that replace directors. I mean, I'm sure the studios had zero ulterior motive on that one. Grant: Okay, but skills training isn't nothing either. Reid Mercer: Read: notice rights are not revenue. A meeting is not a check. The studios agree to notify, bargain in the future if AI training becomes a revenue source. source, and refuse to put any number on what that training is worth now, that's the line they would not cross. Grant: That part is real. Pre-negotiation reporting was pretty clear. The AMPTP would not prejudge the value of training data, full stop. Reid Mercer: So what the DGA actually got: creative control downstream, process rights upstream. What they didn't get: a dollar figure attached to any of it. Grant: Which might be the right call, honestly. Locking in a bad royalty rate now could be worse than leaving it open. Reid Mercer: Or the studios get four years of AI training on member work and the next negotiation starts from zero again. You either see it coming or you don't. Grant: And that's the gap that survives this deal, not the directorial authority clause-that's solid-it's the revenue sharing piece. that went nowhere. The AMPTP drew the line and nobody moved it. Reid Mercer: So the guild pivoted: if you can't win on AI money, protect the jobs AI threatens (multi-hyphenates, directing opportunities abroad); that's where we go next. Grant: And that section, that's where things get genuinely interesting. So the multi-hyphenate guardrails. Deadline called this one of the toughest deal points to close, and when you read why it makes sense. Reid Mercer: Right. TV production dipped forty per cent over the last four years, Variety reported that. So you've got fewer shows, fewer episodes per show, and now actors and writers are doubling as directors on the same series. Career directors are getting squeezed from every direction. Grant: Okay, so the provision per Deadline limits affiliated hires to two episodes Speaker 4: per Grant: --Episodes per season on a scripted series: no directing track record, already drawing a paycheck in another capacity on the same show: two max. Reid Mercer: two. Which sounds reasonable until you do the math on a six-episode limited series. Grant: Yeah, that's a third of the season right there. Reid Mercer: And this is the part that bothers me. Guardrails protect the slots that still exist. They don't create new ones. TV employment down 35% in 2024. Hollywood Reporter had Nolan saying that before negotiations even started, a cap on affiliated hires doesn't reverse that curve. I'm not arguing it does. But look, if you shrink a pool and then let it drain faster by handing the money to the bank, it's not going to work. It's not going to work. It's not going to work. It's Speaker 4: not going to work. Grant: In adding slots to non-directors, you've got a pipeline problem on top of a volume problem. The guardrail stops the compounding. Reid Mercer: Fair point. You either stop the bleeding first or there's nothing left to grow back. Grant: The Overseas Bulletin is the other piece. The AMPTP agreed per Deadline to explicitly prohibit studios and agents from excluding DGA members from directing opportunities outside the U.S. and Canada. DGA sources say this had been increasingly happening as runaway Runaway production expanded. Reid Mercer: Which, to be blunt, is a reminder bulletin, not a jurisdiction expansion. Grant: A hundred percent. The studios didn't grant broader territorial coverage; the Geographic Scope Committee meets later this year to keep talking about it; so process, not victory. Reid Mercer: The Geographic Scope Committee-that's doing a lot of work as a sentence. Grant: It really is. Reid Mercer: Now, the pilot directed by Credit-this one's actually kind of fun. Studios agreed a separate card of This part appears on every episode of a series, crediting whoever directed the pilot. Grant: Wait, so the studios agreed to a permanent on screen credit before they agreed to any revenue sharing on AI training? Reid Mercer: Correct-the credit card before the cash. Great trade! Look, for a mid career director who helms a pilot that runs five seasons, that's real visibility. Casting directors and show runners see your name on two hundred episodes, that's a career springboard. I'll give 'em that. Visibility is currency when the industry is contracting. So the real question the DGA is betting on-and this sets up what comes next-is whether the Though the actual job creation lever isn't contractual at all; it's legislative, the federal production tax credit side lever. Grant: Studios send senior executives to Capitol Hill to lobby alongside the MPA and the guilds. That's where they place the biggest chip. Reid Mercer: And that's a very different kind of argument than anything we've seen in this contract so far. Grant: So, the side letter: studios committing senior executives, not just the Motion Picture Association, to personally lobby alongside the DGA for a federal production tax credit. Reid Mercer: And Variety confirmed it: the studio's top executives, Capitol Hill, alongside Hollywood's labor unions. That's the detail that actually surprised me. Grant: Okay, but here's my problem: a commitment to lobby is not a commitment to produce. You can spend a year on Capitol Hill and walk away empty handed. Side letter language doesn't have an enforcement clause for outcomes. Reid Mercer: No argument there. But read Getting Senior Studio Executives On Record As Co-Lobbyists For Federal Incentive. That's a non-trip. If you align their money and the guild's money pointing at the same legislative target for the first time.... Grant: Which matters if Congress actually moves our federal film credit, and right now that's a big if. Reid Mercer: Sure, could take years, could take never; but the DGA can't negotiate productions into existence through contract language alone. We established that last segment. So this is the workaround: get the studios lobbying muscle in the room. Grant: I'll grant that. The MPA lobbying solo has a mixed record on domestic production incentives. Adding actual studio CEOs changes the optics, maybe the pressure. Still speculative, but not nothing. Reid Mercer: Not nothing, Grant: Yeah. Reid Mercer: right. Grant: Okay, here's what the press release buried, and this one's actually enforceable. Deadline reported the residuals provision. If a film made for one streaming platform gets moved to another, Other, the studio has to keep paying the higher fixed exhibition residual, not a gross-based residual, the higher one. Reid Mercer: Wait, so you can't just merge your streaming services and quietly downgrade the residual class? Grant: Exactly. The Wrap flagged this explicitly. This closes a loophole that could have been used in something like a Paramount-Warner streaming consolidation. Reid Mercer: Huh; so that one has actual teeth. Grant: Not in contract language; specific, measurable. The side letter is a press conference; that residuals clause is a lawsuit waiting to be filed if anyone tries to dodge it. Reid Mercer: So two very different things dressed in the same announcement; I can work with that framing. Grant: That's the whole deal in miniature: some of it's real leverage, some of it's a letter of intent with a nice signature on it; the question now is whether any of this holds when the crews come to the table. THE TABLE. Reid Mercer: IATSE, their 2024 basic agreement runs through late 2027, and every AI protection the DGA just locked down becomes the floor they're negotiating from. Grant: A floor, Grant, not a ceiling, and their members are a lot more directly in the path of the AI tools than any director sitting in a chair behind the monitor. So IATSE runs through July twenty twenty-seven. That's the clock ticking in the background on everything we just talked about. Speaker 3: Right, and the DGA just handed them a floor. Notice-and-bargain on AI. Skills training programs. The framework is set. That's the inheritance. The question is whether it's a foundation or a ceiling. For cinematographers, editors, VFX workers, the people whose raw creative output literally feeds generative AI systems, I don't think the DGA floor holds. Walk me through it. Variety reported that back in 2024, even as IATSE members were voting to ratify, the Art Directors Guild, Local 800, Reid Mercer: BGHOST1mhm. Speaker 3: some board members, people who sat on the AI task force, called the AI language toothless. That's before the DGA deal existed as a template. And now it does. The AMPTP's position, we won't prejudge the value of AI training data, that became the opening bid in every conversation that follows, which is a master class in buying time. Four years of labor peace and no revenue sharing commitment. That's the trade the studios made across all three guilds. I mean, I'd take that deal if I were a studio CFO. You set the pattern, you hold the line on the one thing that actually costs money. AI. revenue. Grant: Exactly. Process rights are cheap. Revenue sharing is not. Speaker 3: So the DGA gets notice and consult, IATSE will get notice and consult, and meanwhile the model trained on an editor's timeline or cinematographer's dailies just keeps running. Grant: IndieWire noted the 2024 IATSE deal was described as a starting point on AI. Their own leadership said that at the ratification town hall. Speaker 3: A starting point that expires in July 2027. Grant: Right. Speaker 3: With the DGA deal now defining what progress looks like. So the central question for the next cycle: can IATSE move the line on revenue sharing when the members most exposed to displacement are the ones bargaining? Or does the pattern hold because no individual union wants to be the one that breaks the streak of ratified deals? Studios bought four years; whether that's enough depends on how fast the technology moves and how patient f Grant: Should fifty thousand West Coast crew members stay? Speaker 3: That math could get uncomfortable fast. Grant: Yeah, the check arrives before anyone wins this argument. Alright, that is a wrap on this one. And honestly, Grant, the DGA deal ended up being a more layered story than the headlines suggested. Speaker 3: Right. The piece that keeps sticking with me, members are ratifying right now without knowing their actual premium cost. The trustees handle that downstream. You want process? Fine. But that's a real information gap. Grant: And on the AI side, notice rights and future bargaining commitments are a framework. Teamwork, not revenue. Studios never moved on what training member work is actually worth. That math is still unresolved. Reid Mercer: Four years is a long time to wait for the next crack at it. Grant: If this episode helped you see the business differently, tell us, email us at Blueprint at heymeadow.com, tag us on social, or drop a review. New episodes every Tuesday. Reid Mercer: IATSE's 2027 cycle is next. The framework these Guilds built... Built either holds or it doesn't. We'll be watching. Grant: Thanks for listening to Blueprint. See you Tuesday.