Hollywood Unions Urge Studios to Resume Talks With SAG-AFTRA Amidst $500 Million Gap in Streaming Residuals
Talks between major Hollywood studios and the Screen Actors Guild-American Federation of Television and Radio Artists (SAG-AFTRA) have broken down, leading to a strike and the shutdown of the entertainment industry. The main point of contention is the vast gap in streaming residuals, with SAG-AFTRA demanding $500 million and the studios only willing to pay $20 million.
The issue of streaming residuals has been a significant factor in both writers’ and actors’ strikes. The Writers Guild of America (WGA) successfully secured bonus payments for streaming shows based on viewership. However, they settled for a relatively small amount, around $5 million per year. On the other hand, SAG-AFTRA has proposed that streaming platforms pay 57 cents per subscriber annually, which amounts to $500 million across all platforms.
SAG-AFTRA’s proposal involves establishing a jointly administered fund that would distribute the money to actors based on the viewership of their projects. The union has discarded an earlier proposal that relied on a third-party data provider to determine the value of each show and instead opted to use the platforms’ viewership data.
The Alliance of Motion Picture and Television Producers (AMPTP) is offering a similar proposal to what was approved by the WGA. Under this proposal, writers on successful shows would receive a 50% bonus on their fixed residuals if the shows reach a certain viewership threshold. However, applying this provision to actors would cost significantly more, according to Netflix Co-CEO Ted Sarandos.
Negotiations between SAG-AFTRA and the studios resumed on October 2 after the studio CEOs showed resistance to the union’s initial proposal of a 2% revenue share. Despite the union’s willingness to reduce the proposal to 1%, the studio CEOs continued to reject any revenue sharing arrangement. This led SAG-AFTRA to present the 57-cent-per-subscriber formula, aiming to generate as much money as the 1% revenue share. However, the studios perceived it as a repeated rejection of their previous offers and concluded that the talks were unproductive.
The studios estimate that their latest offer is worth over $1 billion to actors over three years, primarily through higher minimum rates. The industry awaits further developments as both sides strive to bridge the substantial gap in the negotiations.