Ted Sarandos: SAG-AFTRA Talks Fell Apart After Proposal of Levy on Each Streaming Subscriber

Ted Sarandos, co-CEO of Netflix, said the talks between SAG-AFTRA and the AMPTP fell apart Wednesday because of an additional “levy” the actors union was proposing to put on every streaming subscriber. 

Sarandos has been one of the four CEOs, alongside Bob Iger, David Zaslav and Donna Langley, who sat in on negotiations with the Writers Guild of America and had been recently meeting with SAG-AFTRA.

Speaking at a Bloomberg conference Thursday, Sarandos said they had offered SAG-AFTRA a “success-based bonus,” which he said was similar to the writers’ deal, but which cost the studios four to five times more. 

“That was rejected and the counter was this levy on every subscriber, and prior to that was a levy on all revenue, where basically the union will take a certain amount of money for every subscriber to a service,” Sarandos said.

“That issue that we got resolved with the writers was not only accepted in the deal, but ratified by a 99 percent vote of the Writers Guild. So I know that all these guilds are not created equal and they all have different needs and more bespoke needs, but like I said that is one that worked, that rewarded success, which we agreed with. But a levy on top of our revenue or per subscriber, with no insight into the revenue per subscriber or anything, that just felt like a bridge too far to add this deep into the negotiation,” Sarandos continued. 

The AMPTP announced Wednesday that negotiations between the two parties had been “suspended,” while saying that “the gap between the AMPTP and SAG-AFTRA is too great.” In its message, the AMPTP also spoke to the union’s proposal for casts to receive a cut of streaming platform revenue, calling it “an untenable economic burden” that would cost more than $800 million per year.

SAG-AFTRA sent a message to members saying that the studios walked away from talks with the union and accused them of using “bully tactics.” The message added, “[The studios] intentionally misrepresented to the press the cost of the above proposal — overstating it by 60 percent.” 

Sarandos added while he and the other CEOs have been at the table for the recent negotiations, all studios have been deeply invested in the process. He and others are committed to making a deal, he said, as long as the talks are progressing. But he said the talks Wednesday night were “not steady or progressive.”

“The four of us have been at the table, but everyone has been deeply engaged in this every day, treating it as with the same urgency that we did trying to get production open during COVID. We understand a deal has got to get made, and the one thing about it why these deals can take a long time sometimes is this is the one deal we will make,” Sarandos said.

“This has been a very difficult time, obviously, doing this, and the goal here is to get people back to work. The goal is to get the town opened up. This is not just hurting our industry, it’s hurting every other business that supports our industry,” he added.

He also said that while he expects the cost of producing content will ultimately rise for studios once an agreement is reached, Netflix is not currently changing its content spending forecasts.

Sarandos also took time to address the Hamas attack on Israel on Saturday, saying that Lior Weitzman, who worked in the sound department on Bros, a Netflix original series in Israel, had been killed in the attack after going biking Saturday morning. He added that production on that series has been halted.

“We just want to say our hearts are out to Lior and his family and anyone else who may have lost somebody in Israel on Saturday,” he said.