The WGA West has reached a big settlement with CBS over underpaid residuals for shows made available on the CBS All Access streaming platform from its inception in 2014.
The guild disclosed in a letter to members Thursday that it has negotiated a settlement worth $3.4 million to cover 62 series featured on the subscription streaming service that CBS unveiled in October 2014. The guild challenged the methodology that CBS used to calculate the residuals due to writers for episodes of new and vintage series. The settlement covers 2014 through the end of 2020.
“We worked with CBS to reach a settlement that not only appropriately values the license fees for the programming you’ve written, but also includes interest owed for the late payment,” WGA West’s top leadership wrote in a letter to affected guild members.
A source close to the situation said the deal was finalized in November. CBS declined to comment.
CBS was the first of the major broadcasters to launch a standalone subscription streaming service offering linear channel feeds, library content and an ever-growing slate of original series. The All Access service was expanded and rebranded Paramount Plus in early March.
The heart of the residuals dispute reflects two converging trends in the industry. The rise of on-demand streaming platforms have turned writer residuals into a complex maze of formulas governed by the WGA’s master film and TV agreement with the major studios. Those formulas are still being updated for a marketplace in which any given episode of a TV series is available for on-demand streaming 24/7. That’s a sharp contrast to traditional linear rerun and syndication schedules that were tightly controlled down to the number of runs allowed each week in content licensing deals.
The conflict over how CBS calculated those residuals is also a sign of how the largest media companies are turning inward and looking to own most of the programming on their streaming and linear platforms. That also complicates how residuals, performance royalties and profit participation points for WGA members are calculated per the deal terms often baked in to contracts for top showrunners, writers and executive producers.
“In a world where most of the major studios have or soon will launch their own streaming services, this continues to be a vital enforcement issue for the Guild to address,” WGA West leaders wrote.
CBS All Access and now Paramount Plus are home to a slew of original series including drama series “The Good Fight” and the rebooted “Star Trek” universe of “Discovery” and “Picard,” among others.
Here is the full WGA West letter:
Dear CBS All Access Writer,
We want to let you know that the WGAW’s Legal team recently resolved a claim for residuals and interest for reuse of CBS television programming on the subscription streaming service CBS All Access. You’re one of the writers across 62 series who are receiving a check for your portion of a $3.4 million settlement, representing residual compensation and interest. These checks will be mailed out over the next 14 days.
When CBS launched CBS All Access, the company used much of its own television programming to establish and grow the service. Writers of these television programs were owed a residual of 1.2% of the license fee for usage on CBS All Access. Because CBS owns CBS All Access, our contract requires the company to calculate license fees by using comparable CBS television shows licensed in arms-length transactions. This protection is necessary to ensure that companies do not undervalue license fees (and therefore underpay residuals) when licensing content to themselves. In a world where most of the major studios have or soon will launch their own streaming services, this continues to be a vital enforcement issue for the Guild to address.
The Guild brought a claim alleging that CBS had undervalued the imputed license fees it used on CBS All Access from its inception in 2014 through 2020. We worked with CBS to reach a settlement that not only appropriately values the license fees for the programming you’ve written, but also includes interest owed for the late payment.
The $3.4 million settlement covers usage on CBS All Access through the end of 2020, which means if your programming continues to be used on Paramount+, you will be owed additional residuals. The Guild will continue to monitor how CBS values its television programs and pays residuals for reuse on the new service going forward.
If you have any questions, please don’t hesitate to reach out to the Legal Department.
David A. Goodman, President
Marjorie David, Vice President
Michele Mulroney, Secretary-Treasurer
Alisa Schlesinger, WGAW Senior Counsel
Kathy Christovich, WGAW Assistant General Counsel
(Pictured: CBS All Access’ “Star Trek: Discovery”)