Disney Trying To Change the Way TV Show Creators are Compensated

Now that Disney has bought Fox and is starting it’s own streaming service, they now have turned their attention to changing the way show creators are compensated.

According to an article posted on the

“Walt Disney Co., which became a dominant player in television production with its acquisition of Fox assets earlier this year, is pushing to transform how TV show creators are compensated for their work.

For decades, the brass ring for showrunners was seeing their series hit the 100-episode mark.

Shows reaching that milestone — usually achieved at some point in the not easily attained fifth season of a network run — became ripe for syndication and the rich financial rewards that came with it.

These payments have gone to creators, powerful stars and anyone else who owned a piece of the “back end.” For a hit show, such payouts could dwarf the fees earned during the early years of a show’s run.”

But Disney is now pushing for a new formula which offers more of the profits sooner BUT it comes with the cost of ” complete control of any future licensing revenue.” This would limit the profit potential for the creators of hit TV shows.

But where is the information coming from?

According to the authors “…The Times has learned from conversations with Hollywood agents, attorneys and union representatives.” Of course they are pushing back as this could substantially reduce income for creators whose shows became hits. Producers, who can get checks for their involvement in a project years after its initial run, are also skeptical.”

Disney’s argument, according to those who’ve heard the new pitch, is that with on-demand and streaming, it’s creating less demand for American shows internationally and more demand is being put on locally produced television. They are making more of their own shows and buying less shows run by companies like Disney.

Of course these services want to keep the money and control the properties. But is that fair to creators?

“While some have signed these deals, others have balked, sources said. Disney is asking producers to accept contracts that would give them a share of profits starting in the second year of a series, according to a Fox contract document obtained by The Times. Producers will also be eligible for a series of bonus payments based on a show’s success and longevity.

The trade-off is that Disney would control all licensing of the series to local TV stations, cable networks, streaming services and foreign broadcasters, essentially buying out whatever share of profits are generated by those sources.”

Entertainment lawyer Leigh Brecheen, a partner at Goodman, Schenkman & Brecheen, explained why this is a problem:

“They can run it 10,000 times on their (streaming) service and they can run it 10,000 times on their own network, they can sell tons of advertising, tons of subscriptions, and you won’t get any additional money.”

It’s not only show creators and producers that are being affected. The actors union SAG-AFTRA is also monitoring the situation because some of their actors on hit shows also get profit sharing. It affects a lot of people involved in a show.

Now to be completely fair other streaming companies like Netflix and Amazon are already putting this kind of payment plan into play. Disney did not invent this idea. It reminds me a lot of what happened with publishing after Harry Potter. Now publishers are asking for a lot of licensing and theme park rights up front to make sure they keep most of the money. Companies are trying to find ways to take more of the pie. Deals like this one allow them to own shows 100% in perpetuity.

I do understand that things do have to change and adapt with the time. Streaming services have re-invented the way we participate in entertainment and with that comes some financial adjustments, but I don’t think this is being done in a fair manner. I am a creator. I have pitched television shows and books and I would not agree to this deal either.  It feels more like a “Work for Hire” situation and less like the partnership it’s been.

But what happens is that if creators want a chance to have their projects seen? Are they going to pressured to play by these new rules? And in if their show is a hit, could they lose a lot of money?

According to agents and entertainment lawyers a lot of younger creators have already signed on with similar deals for other streaming services. Disney is just using the opening to their advantage, but because of their size, this could create the new “normal” for entertainment deals, ultimately shortchanging the creators and actors that made the show what it is.

You can read more about this deal with the original story.

What do you think? Comment and let us know.

Source: LA Times


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