It became the speech heard around Hollywood — Jeff Sagansky’s blistering comments last week about the adverse impact the proliferation of the streaming-driven “cost plus” business model has had on profit participation struck a chord in the industry.
A week after Deadline wrote about the media investor and producer’s speech at a NATPE event, the discussion over the issue continues, with agencies and unions mulling ways to step in and help the creative talent they represent.Sagansky’s scathing address was brought up today at an HRTS luncheon where producer John Wells, a force within the WGA and former longtime president of the guild, offered his comments.“I do believe the industry over time will have to return to more shared rights agreements,” he said. “Everything costs too much.
It’s hard for companies to make money without enough revenue. Cost plus is complicated. They really remove the ability for a huge hit to generate profits for most creatives.”Employed by Netflix, Amazon, Disney and Warner Bros., the cost plus model makes for “brutally unfair” and “ridiculous” deals writers, directors, producers and actors “are being forced to sign,” Sagansky said in his speech.
Creative talent gets premiums (10%-20%) over their regular fees upfront but “would never again get paid” even if a show they make is a hit and keeps amassing billions of views over decades and keeps bringing in relicensing, advertising and other revenue to the streamer that owns it, he argued.Wells, who has done numerous successful shows under the traditional broadcast model, including ER and Shameless, was on the panel representing hit limited series Maid on Netflix, the streamer that introduced the cost plus template.
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