WGA Wins $42 Million “Self-Dealing” Arbitration Against Netflix

WGA said today that it has prevailed in a huge “self-dealing” arbitration against Netflix It says it will result in hundreds of writers from more than 100 Netflix theatrical films receiving an additional $42 million in unpaid relics. WGA West and WGA East say they are now pursuing approximately $13.5 million in interest that Netflix reportedly owes the writers for late payments of these residuals.

In a notification to its members, the Guild stated that their victory “stems from a significant arbitration over Netflix’s reduced payment of writer’s remains for theatrical motion picture”. bird box, Netflix argued that the WGA should accept a shoddy formula that the company negotiated with the DGA and SAG-AFTRA. After a hearing, however, an arbitrator determined differently – that the license fee should have exceeded the film’s gross budget. He ordered Netflix to pay the author a total of $850,000, along with $350,000 in full interest.”

“As a direct result of this decision,” the WGA said, “216 writers on 139 other Netflix theatrical films are receiving an additional $42 million in unpaid relics. The Guild is now pursuing approximately $13.5 million in interest Netflix also owed the authors for late payments of these relics.

In 2016, Netflix began producing and releasing dramatic movies written by guild members. Under the streaming giant’s Minimum Basic Agreement (MBA), with WGA West and WGA East, initial compensation includes theatrical exhibition of the film.

The Guild told its members on Thursday:

“When a theater is licensed or released in another market – such as streaming or television or home video – the residual must be paid on revenue earned in those markets. The residual specific to the credited author for that film 1.2% of the license fee paid to the manufacturer for the right to exhibit.

“If the license is between related parties—for example, when Netflix is ​​both a producer and distributor of the film—the MBA requires that the company charge a license fee based on an arm’s length transaction between unrelated parties of comparable pictures—eg. For, a Sony film licensed to Netflix. This key definition, negotiated as part of a resolution to our strike in 2008, avoids the devaluation of the license fee through self-dealing.

“Instead of adhering to the MBA definition established for related party transactions (which is also present in the DGA and SAG-AFTRA agreements with AMPTP), Netflix negotiated new deals with the DGA and SAG-AFTRA, which would allow Netflix significantly Allows to pay residuals at less. More than the cost of the film. Netflix then tried to force the WGA to take up this ‘pattern’ deal. As it was clear the new formula negotiated by other guilds had Underestimating these ‘imposed’ license fees, the Guild instead took the dispute to arbitration.

“During arbitration, the Guild showed that when Netflix licensed comparable theatrical films from third-party producers, it almost always paid a licensing fee that was over budget. The industry referred to this model as a ‘cost-plus’. The Guild argued that Netflix should apply this cost-plus model to its films and charge a budget-plus license fee for the purpose of paying the balance. The arbitrator agreed and ruled That the license fee should be 111% of the gross budget of the film.

According to the Guild, the arbitration ruling has been applied to 139 other Netflix films. Including the additional relics provided as a result, the 216 screenwriters of these films have now received a total of $64 million, which is more than the $20 million received under the deal accepted by DGA and SAG-AFTRA. “

The WGA noted, however, that Netflix “is so far refusing to pay interest on late relics for films other than Bird Box, so $13.5 million in interest in guild arbitration is still owed to these screenwriters.” “

WGA said that bird box Mediation, Netflix “attempted to employ the decades-old AMPTP strategy of reaching substandard agreements with other unions, then trying to impose ‘patterns’ on writers. In this case, Netflix failed because the WGA/DGA/ Instead of accepting the SAG-AFTRA pattern, the authors were willing to fight for what they owed under the MBA.

“As studios increasingly engage in self-dealing on their own streaming platforms, we must ensure that writers are properly paid,” the WGA said. “Netflix, with only a decade’s experience employing writers, has quickly become one of the worst violators of the MBA, requiring the Guild to spend significant resources protecting writers who work for the company. is required.”

The Guild also noted that “the upcoming 2023 MBA talks challenge us to address the industry rush to use the evolution of streaming models to reduce pay and working conditions for Hollywood talent. This Our hope is that writers and all Hollywood workers will receive their fair share of the value we create.”

The communiqué to WGA members was signed “in solidarity” by WGA East and WGA West President Meredith Stehm, Vice President Michelle Mulroney, Secretary-Treasurer Betsy Thomas and all members of its Board of Directors.

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