Netflix Must Pay $42 Million In Writer’s Residuals – IGN
Streaming giant Netflix has lost a case against the Writers Guild of America, and must pay $42 million in unpaid residuals.
A recent arbitration with the WGA over Bird Box starring Sandra Bullock has resulted in the organization securing $42 million in unpaid writer residuals.
“Netflix argued the WGA should accept a substandard formula the company negotiated with DGA and SAG-AFTRA,” reads a WGA memo from president Meredith Stiehm. “After a hearing, however, an arbitrator determined differently: that the license fee should have been greater than the gross budget of the film.”
The arbitrator forced Netflix to shell out $850,000 in residuals to Bird Box writer, Eric Heisserer as well as $350,000 in interest – a grand total of $1.2 million.
The ruling not only affects Bird Box but many other titles. Essentially, the arbitrator ruled that writers on original Netflix titles should be paid the same level of licensing fees that the streaming service pays for third-party titles. This means that the ruling applies to a total of 139 Netflix original feature films.
As an example, the WGA mentioned Red Notice, whose writers will receive $2.78 million thanks to the arbitration instead of the originally proposed $850,000.
The 216 writers of those films are in line to receive $42 million total in unpaid residuals. The WGA is also pursuing an additional $13 million in interest, meaning the affected writers could receive a total of $64 million in residuals after the WGA’s action.
Netflix began producing films written by WGA members in 2016, but the guild’s original compensation only covered the films’ theatrical runs. When those films are licensed or released in other markets, residuals need to be paid on those revenues. However, Netflix negotiated new deals with SAG-AFTRA and DGA that allowed them to pay significantly lower residuals and tried to force the WGA to accept this same deal.
Arbitration over Birdbox was a result of the WGA disputing this deal. Now, the guild has secured its members a massive $20 million more than what they would have received under the DGA and SAG-AFTRA deal.
“The upcoming 2023 MBA negotiation challenges us to address the industry’s rush to use the growth of the streaming model to depress pay and working conditions for Hollywood talent,” said the WGA. “It is our hope that writers and all Hollywood labor will receive their fair share of the value we together create.”
Ryan Leston is an entertainment journalist and film critic for IGN. You can follow him on Twitter.