Following complaints by directors from the features "Suicide Squad", "Godzilla vs Kong" and "Dune", the Directors Guild of America (DGA) sent a letter to WarnerMedia, regarding their decision to release the entire 2021 Warner Bros movie slate on HBO Max at the same time the films will be released in theaters, calling the move "unacceptable" :
From Russell Hollander, DGA National Executive Director to Anne Sarnoff, chair and CEO of WarnerMedia Studios and Network Group:
This letter is written in response to
WarnerMedia’s recent decision to release its entire 2021 slate of Warner
Bros. theatrical motion pictures day-and-date on the HBO Max streaming
service. The DGA first learned of WarnerMedia’s decision through press
accounts starting on December 3. It is an understatement to say the
Guild was taken aback by the lack of transparency exhibited by
WarnerMedia regarding this significant decision, which is contrary to
both the long-standing relationship between the DGA and Warner Bros. and
explicit representations made by senior executives to the DGA on this
"WarnerMedia’s reversal on theatrical release patterns, not only restricts our members’ ability to have their films seen in the manner in which they were intended, it also affects their income. With respect to the latter, the DGA’s residuals formula for feature films are based upon a percentage of gross receipts paid to the Director, in some instances members of the directorial team, and our pension plan.
"The Guild is concerned about the manner in which the
rights to the feature films were provided to HBO Max, the valuation
methodology, and the implications of such transfer pricing to the long
term valuation of the asset. Accordingly the DGA must take steps to
protect its members.
"The Guild has discussed the issues raised
by the day-and-date releases with the agents and representatives of the
affected Directors. We are aware Warner Bros. has made a proposal on
how it intends to impute a license fee for the HBO Max simultaneous
release for the purposes of determining profit participations. That
proposal would result in an unacceptable and inadequate valuation for
the license fee. While the conversations with our members’ agents and
representatives may focus on profit participation and similar issues, we
want to be clear that the proposal, as we understand it, is inadequate
as it relates to residuals payments, and is unacceptable to the DGA.
"It is difficult to overstate the importance of these issues, including the impact on the theatrical experience and the potential loss of income due to reduced revenue streams to DGA members. We intend to take appropriate actions to protect the rights and interests of our members and request an immediate meeting to discuss this matter.
I look forward to your response.