Streaming giant Netflix has lost a case against the Writers Guild of America and has to pay $42 million in unpaid balances.
A recent WGA arbitration over Bird Box starring Sandra Bullock has resulted in the organization securing $42 million in unpaid writer remnants.
“Netflix argued that the WGA should accept a substandard formula that the company has negotiated with DGA and SAG-AFTRA,” reads a WGA memo from President Meredith Stiehm. “However, after a hearing, an arbitrator ruled otherwise: that the license fee should have been higher than the film’s gross budget.”
The arbitrator forced Netflix to pay $850,000 in leftovers to Bird Box writer, Eric Heisserer, as well as $350,000 in interest — a total of $1.2 million.
The ruling applies not only to Bird Box, but also to many other titles. Essentially, the arbitrator ruled that writers of Netflix original titles should receive the same level of licensing fees as the third-party streaming service. This means that the ruling applies to a total of 139 Netflix original feature films.
As an example, the WGA cited Red Notice, whose authors will receive $2.78 million from the arbitration instead of the $850,000 originally proposed.
The 216 writers of those films are lining up to receive a total of $42 million in unpaid remnants. The WGA is also seeking an additional $13 million in interest, meaning the writers involved 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 fee only covered the theatrical runs of the films. When those films are licensed or released in other markets, residuals must 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 the same deal.
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Arbitration over Birdbox resulted from the WGA contesting this deal. Now the guild has insured its members a massive $20 million more than they would have received under the DGA and SAG-AFTRA deal.
“The upcoming MBA negotiations in 2023 challenge us to address the industry’s rush to use the growth of the streaming model to lower wages and benefits for Hollywood talent,” the WGA said. “It is our hope that writers and all Hollywood workers will receive their fair share of the value we create together.”
Netflix recently lost more than 1 million subscribers and has since resorted to cost-cutting measures, such as scrapping its animation projects and layoffs at its editorial website, TUDUM.
Ryan Leston is an entertainment journalist and film critic for IGN. You can follow him on Twitter.