One day removed from the AMPTP leaving the negotiating table, SAG-AFTRA lead negotiator Duncan Crabtree-Ireland is slamming recent remarks by Netflix co-CEO Ted Sarandos about one of the guild’s key proposals as “inaccurate, inappropriate,” and “fairly offensive.”
On Thursday, Sarandos said SAG-AFTRA in the 11th hour came in with a new proposal that he referred to as a “levy” on all streaming subscribers, a proposal that ultimately proved to be “a bridge too far” for the studios. The policy was a change from the guild’s previous proposal, which was a streaming revenue sharing model, or what Sarandos called a levy on all revenue, essentially demanding a percentage of everything a streamer brings in.
Speaking with IndieWire late Thursday, Crabtree-Ireland confirmed that SAG-AFTRA in its latest October 11 proposal did change course from asking to share all revenue to instead asking for compensation based on subscribers. But he says it’s because the studios asked for that change.
As for what Sarandos means by a “levy,” Crabtree-Ireland believes he’s trying to make it sound like an actors’ “tax.”
“It’s really an inaccurate, inappropriate, and fairly offensive description because this is not a tax,” Crabtree-Ireland said. “This is a request for fair compensation for work performed by our members who have created the content that is powering his platform and all of these other companies’ platforms. Asking to be paid fairly for your work, it’s not a levy, it’s not a tax; it is fair compensation. And it’s what unions are here to do. I think it’s just a really incorrect characterization of what our proposal is.”
Crabtree-Ireland also believes Sarandos is overlooking a key component of this proposal, which is that it’s a formula calculated through a combination of subscribers and viewership.
To calculate the guild’s proposed formula, Crabtree-Ireland says you take the total number of a streamer’s global subscribers and multiply that by 27.6 cents, which is the rate the guild is proposing. That’s then multiplied by the percentage of viewership of SAG-AFTRA-covered work and divided by total viewership minutes on the platform. The guild believes this works out to about 56.5 cents per subscriber per year to pay for all of SAG-AFTRA’s members.
Crabtree-Ireland believes this model takes into consideration viewership from all the content a streamer has that doesn’t use SAG-AFTRA actors, be it sports, news, nonfiction, reality, or international programming. But he says the AMPTP is conveniently ignoring that part of the formula, and it’s why the AMPTP believes it will cost them $800 million a year, whereas the guild believes it will only cost $500 million a year. He also says the CEOs know he’s right.
“They know it because I had this exact conversation with them last night,” Crabtree-Ireland said. “They’re ignoring that reduction, but that reduction is significant. That reduction is the difference between $800 million and $500 million. So that’s why their number is incorrect, and they know it. I told them that last night and yet for reasons that I can’t explain, they chose to continue to publicly state that when they know it’s not accurate.”
But why didn’t SAG-AFTRA take the success-based residual that the writers agreed to? In that model, writers of the most successful streaming shows get a bonus, and they also get limited access to previously secretive streaming viewership data about how many people are really watching.
Crabtree-Ireland says SAG-AFTRA’s new proposal gets them a little closer to that, but the guild never wanted what the WGA was asking for. It’s why the guild was asking for a cut of revenue in the first place. Writers, he explains, are compensated very differently than actors, and the WGA’s proposal doesn’t necessarily address the many background or smaller actors working on very popular shows that don’t rise to that upper crust. His goal is to make sure all their members are being fairly compensated for the value he believes actors add to streaming platforms. Even with the current residuals baked in, only rewarding the most successful programs doesn’t get them there.
“We still want the results to be attached not only to subscriber levels but also to viewership levels,” Crabtree-Ireland said. “The companies have agreed to provide that information to the Writers Guild. We think we can use that information as well to ensure that the way this money gets distributed actually reflects the contribution to the value of the platform.”
So is all this why he believes the studios ultimately left the table? That, he’s not sure of, because the two sides still have a lot to work through.
For one, the guild and the companies are far apart on minimums. Crabtree-Ireland revealed that when negotiations first began back in June, SAG-AFTRA originally came in with a 15 percent increase to minimums in the first year but have since scaled that down to 11 percent. Crabtree-Ireland says that’s what the guild’s accountants say is necessary to account for inflation. The writers and the directors both agreed to 5-percent minimum increases in the first year.
“(The companies) have to do something to address that performers are paid very differently than writers,” he said. “They need to not be losing ground to inflation. It’s just that simple.”
The two sides are also really far apart on AI. They’ve gained some ground for minor digital alterations with AI, and Crabtree-Ireland says it’s SAG-AFTRA that’s done a lot of the moving. But the AMPTP in its statement from Wednesday night said the studios’ AI proposal includes the “prohibition of later use of that (Digital) Replica, unless performer specifically consents to that new use and is paid for it.” Crabtree-Ireland flatly says that statement is inaccurate.
At issue, he says, is that the companies can still require principal performers to sign away their digital replica for use in an entire franchise without the actor’s consent for sequels. He imagines a scenario where an actor gets a big break in a Marvel movie and then feels pressured to agree to it or lose the part to someone else, and Marvel could then re-use their digital scan 10 years down the road for a movie not even conceived today. That doesn’t cut it for “consent” in the guild’s mind.
“You’d have to give them specific information about the intended use so that they can make a fully informed decision about whether to grant consent or not,” he said. “What kind of scene is it going to appear in, what’s the purpose of having a digital replica, and how are you going to use it? Is it going to be to replace you within a scene that’s set on the moon? Is it to replace you in a romantic scene for some reason? And if that changes during the course of the project, you can seek updated consent with the new information if you want to use it differently.”
Crabtree-Ireland believes the only way to solve these issues is if the companies come back to the negotiating table. All of Hollywood’s major guilds on Oct. 13 were united in urging the AMPTP to resume talks immediately to get a deal done. Crabtree-Ireland says disagreeing with the guild’s latest proposals isn’t a reason to walk away.
“Thousands of industry workers have been out of work for months,” he said. “The idea that these CEOs have walked away from the table and just leave everybody out of work and on strike while they don’t suffer that consequence at all, it doesn’t seem like they really are paying attention to the harm their actions are causing. I think that’s really unfortunate because you want to all be in a room negotiating and finding a path until it’s resolved. It’s really disrespectful to the workers in this industry not to do that.”