Streaming giant Netflix has lost a case to the Writers Guild of America and has to pay $42 million in arrears.
“Netflix stated that the WGA should accept a substandard formula that they negotiated with the DGA and SAG-AFTRA,” reads a WGA memo from chairman Meredith Stiehm. “However, after the hearing, it appears that the license should have gone for more money than the budget of the film.”
Netflix then had to pay $850,000 in restitution to Bird Box writer, Eric Heisserer, as well as $350,000 in interest, which amounts to $1.2 million.
This verdict does not only concern Bird Box, but many other titles. In fact, it was said that writers on Netflix productions should be paid as much as the licenses the streaming service pays for third-party titles. As a result, the ruling concerns 139 Netflix original films.
For example, the WGA mentioned Red Notice, whose writers will receive $2.78 million from the ruling instead of $850,000.
The 216 writers of all those films will receive a total of $42 million distributed. The WGA is seeking an additional $13 million in interest, giving the writers a total of $64 million.
Netflix started producing films written by WGA members in 2016, but the original compensation came only from the theatrical results of the films. When those films are released in other markets, a refund has to be paid on those revenues. However, Netflix negotiated new deals with SAG-AFTRA and DGA, which meant they had to pay much less.
The Birdbox ruling came because WGA contradicted the deal. That has proved successful.
“The upcoming 2023 MBA negotiations will force us to address the streaming service growth model that underpays Hollywood talent,” the WGA said. “Our hope is that everyone who does work in Hollywood is paid fairly.”
Netflix recently lost 1 million subscribers and has been cutting back ever since by animated projects cancel and more.