At Tuesday’s Senate antitrust hearing, Netflix co-CEO Ted Sarandos declined to give a “yes or no” answer when asked if he would commit to union members “remaining in full.”
Sarandos was at the Capitol to answer questions about the proposed merger between Netflix and Warner Bros. Sen. Josh Hawley (R-Missouri) asked Sarandos to make a series of labor commitments, including a pledge to increase the studio’s domestic production workforce.
Sarandos was willing to go for it and promised to maintain the 45-day theatrical release period. But when asked to commit to “full stay,” he was a little puzzled.
“I want to tell you that this is a very complicated answer because I’m prepaid,” Sarandos said.
As Hawley presses for a yes or no, Sarandos pointed out that major studios are just days away from negotiating with entertainment unions, which will likely be an issue.
“You let me down,” Holly said. “That’s a complicated and long ‘no.’ I really hoped that would happen. ”
Sarandos valiantly tried to reframe the question.
“Are we asking you to commit the residuals in the traditional format?” he asked. “I don’t think that’s the case in many cases.”
But Holly was ready to move on. “I think there’s some work to be done on that,” he said. “I want you to reconsider your position.”
Streaming residuals are certainly complicated, and unions are very concerned that Netflix residuals will not be paid as much as traditional broadcast or cable residuals.
But Sarandos could have simply said “yes.” That’s because Netflix is paying the balance of the “full amount” the union could win in collective bargaining, and the U.S. Senate is not a party to that deal.
A Netflix spokesperson quickly tried to sort out the answer.
“Netflix is part of AMPTP, and AMPTP’s agreement with the Guild provides payments called residual payments to reuse films on additional distribution platforms such as cable, syndication, DVD, streaming content producers, and other media,” the spokesperson said. “Netflix and the streamers are paying the balance. According to the WGA, the balance has reached an all-time high of $493.9 million (up 5% from 2020 to 2023). Streaming accounts for about 45%, with the largest share of that coming from Netflix.”
Sarandos’ answer also seemed to be trying to address another concern about backend compensation that is different from residuals. Netflix pays higher upfront fees (in Sarandos’ words, “highest in the market”) in exchange for profit participation for key creative talent.
But Sarandos may have stuck with it because what Hawley was asking for was about residuals, not back-end compensation.
