The WGA is taking on Netflix over the residuals it owes guild members. Deadline has learned that the union has filed an arbitration claim against the streaming giant over residuals owed to the writers of 33 of its original films that were released in theaters for awards consideration at or near the same time that they were made available to its subscribers.
The dispute over the application of residuals formulas to these projects challenges the way Netflix allocates license fees for the purpose of calculating residuals. Because these residuals are based on licensing fees, the WGA is challenging Netflix over how much it paid itself to license these films to stream on its own platform – a dispute that could have repercussions for Amazon, Hulu and Apple, which also release their own original films in theaters to garner awards attention.
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Netflix is the first to face this challenge from the guild because it’s far and away the leader of the SVOD pack in the simultaneous theatrical release of its films. Last year, 51 Netflix original films were made under WGA contracts – a growing sector that gave rise to this dispute. Amazon, Apple and Hulu, meanwhile, could find themselves in the guild’s sights next if it prevails in its arbitration with Netflix. The WGA declined comment.
Netflix also came under fire recently from Steven Spielberg, who argued that films that debut on streaming services or get a short theatrical run should not be eligible for Oscars but should compete for Emmys instead. His objection came after Alfonso Cuarón’s Roma, which was released in a handful of theaters three weeks before it was made available on Netflix, went on to win three Oscars.
The guild’s fight with Netflix comes at the same time that it’s threatening to go to war with the big talent agents over packaging and production deals. The WGA says that if no agreement is reached for a new franchise agreement with the Association of Talent Agents by April 6, it will order its members to fire their agents if they refuse to sign the guild’s proposed new Code of Conduct.
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