Netflix to pay $42 million in dispute over screenwriter compensation

Netflix has to shell out a hefty sum in the battle to pay screenwriters. As meeting The Writers Guild of America has reportedly won an arbitration award requiring Netflix to pay 216 theatrical writers an additional $42 million in unpaid balances. The WGA is also seeking an additional $13.5 million in interest for late payments.

The WGA accused Netflix of “proprietary trading” that helped save on paying writers. Residuals for theatrical releases are said to be paid from revenue generated in a given market, according to the guild, and licenses such as Netflix (where it is both the producer and distributor) charge fees based on more conventional relationships – a Sony film, licensed to Netflix, for example. However, Netflix has reportedly negotiated agreements with the Directors Guild of America and the Screen Actors Guild (SAG-AFTRA) that allow it to make residual payments on its own films for “significantly less” than the film’s cost.

The win was aided by a previous win over the Sandra Bullock film birdhouse, the WGA claimed. An arbitrator found that Netflix significantly underpaid a screenwriter with a formula like that used in the recent dispute. The official asked Netflix to pay the author $1.2 million in arrears and interest.

We reached out to Netflix for comment. However, the WGA did not shy away from criticism. It called Netflix one of the “worst violators” of the guild’s basic residual covenants, and saw the arbitration as a backlash against media companies trying to “push” payment from streaming services. Don’t be surprised if there are more fights like this in the industry.

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