Hollywood directors reach labor pact, writers remain on strike

© Reuters. FILE PHOTO: People stand above the Hollywood sign under a cloudy sky in Los Angeles, California, U.S., May 31, 2023. REUTERS/Mike Blake/File Photo

By Lisa Richwine and Maria Caspani

(Reuters) -Hollywood's major studios reached a tentative labor agreement with the union representing film and television directors, likely averting a work stoppage that would have piled pressure on media companies to settle with striking writers.

The Directors Guild of America (DGA) will ask its 19,000 members to approve the three-year contract, which was announced late on Saturday after three weeks of talks.

The agreement includes gains in wages and residuals plus guardrails around the use of artificial intelligence, according to the DGA and the Alliance of Motion Picture and Television Producers (AMPTP), which represents Netflix (NASDAQ:NFLX), Walt Disney (NYSE:DIS) Co and other major studios.

The Writers Guild of America (WGA) has been on strike since May 2, shutting down several TV and film productions, and has no new talks scheduled with the studios.

During the last WGA strike in 2007 and 2008, a studio deal with the DGA prompted writers to head back to the bargaining table. On Friday, WGA negotiator Chris Keyser argued that strategy would not work this time.

"Any deal that puts this town back to work runs straight through the WGA, and there is no way around that," Keyser said in a video posted on YouTube.

The DGA's board will consider whether to approve the deal on Tuesday before it goes to members for ratification. No date has been set for the ratification vote.

If approved, the deal could offer a blueprint for the striking writers and upcoming talks between studios and SAG-AFTRA, the union representing Hollywood actors.

WGA representatives did not respond to requests for comment on Sunday, but some writers voiced reaction on social media.

"Spartacus" creator Steven DeKnight called the DGA deal "disappointing, but not surprising."

Writer Bill Wolkoff said he had mixed emotions. "Happy for gains DGA members made, frustrated we were stonewalled on all our asks. My resolve is only stronger," he wrote.

In the DGA's agreement, directors secured wage increases starting at 5% the first year, an increase in residuals from streaming, and a guarantee that "generative AI cannot replace the duties performed by members."

AI has emerged as a major concern of writers and actors, who see their jobs as especially vulnerable to the new technology.

Both the WGA and SAG-AFTRA are seeking protections from AI in their negotiations as well as increases in compensation that they say has lagged as companies have benefited from the rise of streaming television.

SAG-AFTRA has asked members to give its negotiators the power to call a strike if needed, and results of that vote are expected to be announced on Monday. Contract talks between the actors and studios begin on Wednesday. The current labor agreement expires on June 30.

The WGA work stoppage has disrupted production of late-night shows and shut down high-profile projects such as Netflix's "Stranger Things" and a "Game of Thrones" spinoff.