Netflix Must Pay $42 Million to Writers in Unpaid Residuals After ‘Bird Box’ Arbitration Ruling

License-fee related award comes after the Writers Guild of America wins case against the streaming giant

bird box
"Bird Box"/Netflix

The Writers Guild of America has secured $42 million in unpaid writer residuals from Netflix after an arbitration ruling was handed down in the guild’s favor regarding the Sandra Bullock horror film “Bird Box.”

“Netflix argued the WGA should accept a substandard formula the company negotiated with DGA and SAG-AFTRA. After a hearing, however, an arbitrator determined differently: that the license fee should have been greater than the gross budget of the film,” read the WGA West memo from president Meredith Stiehm and other leaders.

As a result, the arbitrator ordered Netflix to pay “Bird Box” screenwriter Eric Heisserer $850,000 in residuals along with $350,000 in interest for a total of $1.2 million.

Because the arbitrator ruled that writers on original Netflix productions should be paid on the same level as the licensing fees the streamer pays for third-party titles, the decision is also being applied to 139 other original Netflix films, meaning that 216 writers for those films will receive $42 million in unpaid residuals, with Netflix still pursuing an additional $13.5 million in interest payments.

In total, the affected writers will receive $64 million in residuals, which the Guild says is $20 million more than what they would have received had they agreed to be compensated under the pattern formula negotiated by SAG-AFTRA and the Directors Guild.

As an example, WGA West pointed to the Dwayne Johnson/Ryan Reynolds/Gal Gadot action film “Red Notice,” for which Netflix will now pay writer residuals of $2.78 million thanks to the arbitration victory instead of the $846,000 that would have been owed under the pattern formula.

‘In the ‘Bird Box’ arbitration, Netflix attempted to employ the decades-old strategy of reaching substandard agreements with other unions, then trying to force the “pattern” onto writers,” WGA West wrote. “In this case, Netflix failed because the WGA was willing to fight for what writers were owed under the MBA, instead of accepting the DGA/SAG-AFTRA pattern.”

Residuals for streaming productions are expected to be the core sticking point between studios and all labor organizations during next year’s contract negotiations, but especially with the Writers Guild, which is demanding significant increases in streaming compensation after giving up much of its demands in that area to end the 2007 writers’ strike.

The battle over residuals was expected to come to a head during the last contract talks in 2020, but was sidelined due to the COVID-19 pandemic.

“The upcoming 2023 MBA negotiation challenges us to address the industry’s rush to use the growth of the streaming model to depress pay and working conditions for Hollywood talent. It is our hope that writers and all Hollywood labor will receive their fair share of the value we together create,” the WGA said.

TheWrap has reached out to Netflix for comment.