Ted Sarandos says SAG-AFTRA has asked for a tax to be imposed on every Netflix subscriber

Netflix co-CEO Ted Sarandos shed some light on why negotiations between the striking actors union SAG-AFTRA and Hollywood’s biggest producers broke down.

Following a scathing statement from the union in the early hours of Thursday morning that accused studios and streams of “bully tactics,” Sarandos arrived on the main stage of the Bloomberg Screentime conference and fielded questions about the collapse.

Sarandos said Wednesday evening’s talks ended with the union proposing a “tax” on each of Netflix’s roughly 238 million subscribers.

“We had very productive conversations, and then what happened last night — they imposed this tax on subscribers, as well as historic highs in terms of increases across the board,” Sarandos said at the event in Los Angeles. The executive noted that although the offer from producers mirrored the one reached in September with the Writers Guild of America, it would cost “four to five times as much” to execute a similar contract with SAG-AFTRA’s larger membership.

Sarandos also said the subscription tax came about after the studios, represented by the Alliance of Motion Picture and Television Producers, received a similar offer to share revenue with actors.

“It seemed like a bridge too far to add to the depth of the negotiations,” he said. Sarandos did not clarify whether the union was seeking a per-subscriber discount from Netflix exclusively, or from all streaming services participating in the negotiations.

Sarandos said the studios approached these negotiations with the same vigor as they handled the coronavirus pandemic, and emphasized the need to get production up and running after more than 5 months of darkness.

“The goal here is to get people back to work. The goal is to open up the city,” he said. “This is not only hurting our industry, it’s hurting every other business that supports our industry… not just in California, but very hurtful in California.”

In its statement before Sarandos’ remarks, SAG-AFTRA leadership did not back down.

“We negotiated with them in good faith, even though last week they made an offer that was, shockingly, less valuable than what they proposed before the strike began,” the union told its members in an email. “These companies refuse to protect performers from being replaced by artificial intelligence, refuse to increase your wages to keep up with inflation, and refuse to share a fraction of the enormous revenue your work generates with them.”