DGA Rejects Five-Year Contracts, Focuses on Industry Challenges

Directors Guild of America (DGA) President Christopher Nolan has stated the union does not anticipate accepting five-year contracts with Hollywood studios. While the DGA remains open to discussions, Nolan believes a five-year extension is unrealistic, citing the rapid pace of change within the industry.

He indicated that agreeing to a long-term contract could be problematic given market turbulence and shareholder influence.

Health and Pension Plans

The DGA, along with the WGA and SAG-AFTRA, requires additional funding for health and pension plans. The DGA's health plan has operated at a deficit for the past two years, with increasing projected losses.

Nolan confirmed cuts to the union's health plan due to rising healthcare costs. He stressed that employers must increase their contributions, as their fixed contributions within current contracts have depleted reserves. Nolan views the AMPTP's focus on this issue as an encouraging sign toward a meaningful solution.

Backend Profit Participation

Nolan highlighted the need to reevaluate old compensation models in the streaming era. He noted a disconnect where companies are rewarded by Wall Street for long-term future investments, while union members require present income. He pointed to the constant undervaluation of traditional cable assets as an example.

Nolan emphasized the critical role of the residual structure, which has developed over decades to support middle-class members, stating it must be preserved.

AI Protections

As chair of the DGA's AI committee, Nolan discussed the union's efforts to understand and address the evolving technology. The 2023 contract established biannual meetings with studios on AI developments.

Nolan stated the DGA aims to have a voice in how AI tools are used and in shaping the legal framework, particularly concerning copyright monetization. He sees licensing deals, such as Disney's with OpenAI, as positive for establishing licensing principles, but noted the need to ensure creatives benefit.

He also raised concerns about AI's impact on ad placement in content, which can disrupt the creative flow of films and television, particularly with the rise of ad-supported platforms. The DGA seeks to guide legal frameworks for companies like OpenAI, which he says are positioning themselves as distribution platforms.

Domestic Production Issues

The DGA supports a federal film tax incentive, advocating for a stackable 25% rebate to enhance competitiveness with other global production locations. Nolan discussed proposals from President Donald Trump's