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Arbitrator rules in favor of WGA, Netflix pays millions more in residuals

Icon, an office building at Sunset Bronson Studios in Hollywood that is occupied by Netflix.
An arbitrator ruled for the WGA and against Netflix, forcing the streamer to pay writers millions in residuals.
(Hudson Pacific Properties)

The Writers Guild of America West said Thursday that 216 writers who worked on Netflix theatrical films received an additional $42 million in unpaid residuals thanks to a recent arbitration ruling.

An arbitrator ruled in favor of the WGA, which raised payment concerns over the residuals owed to a writer on the popular thriller “Bird Box.”

As a result of the ruling, Netflix was required to pay the writer $850,000 in residuals, along with interest of $350,000, according to WGA West in a letter sent to its members on Thursday.

The guild said the ruling affected 139 other Netflix films that involve WGA West and East writers, including action movie “Red Notice” and comedy/drama “Yes Day!”

WGA West said it is pursuing about $13.5 million in interest from Netflix for late payments of the residuals on these projects.

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Netflix did not respond to a request for comment on the ruling.

The guild’s minimum basic agreement (MBA) with the Alliance for Motion Picture and Television Producers expires next year in May.

Under the MBA, writers earn residuals based on revenues earned in streaming markets, which is typically 1.2% of the license fee given to the producer or if Netflix is also the producer and distributor, then the fee is computed based on licensing fees between “unrelated parties of comparable pictures,” WGA West said.

Netflix has negotiated separate deals with Hollywood unions such as the Directors Guild and SAG-AFTRA, but did not have such a deal in place with the WGA.

The first-of-its-kind pact between Netflix and the actors union covers work on Netflix’s foreign-language live-action and animated films dubbed into English.

“Netflix then tried to force the WGA to take this ‘pattern’ deal,” the WGA West leaders said in a letter to its members. “Since it was clear the new formula negotiated by the other Guilds undervalued these ‘imputed’ license fees, the Guild instead took the dispute to arbitration.”

WGA West estimates that the arbitration ruling allowed 216 writers of Netflix theatrical films to receive $20 million more in residuals than they would have under Netflix’s deals with DGA and SAG-AFTRA.

“Bird Box” remains one of Netflix’s most popular English-language films of all time on the platform, ranking at No. 3, based on hours viewed, according to the streaming service. “Bird Box” was viewed 282,020,000 hours during its first 28 days on the streaming service, Netflix said.

“As the studios increasingly engage in self-dealing on their own streaming platforms, we must ensure that writers are paid properly,” said WGA West leaders in a letter to its members.

WGA members strongly endorsed a three-year contract that increases residual payments for high-budget shows on streaming services, among other gains.


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