In recent days, a number of directors and screenwriters published posts on social networks, in which they attacked Hot Company for not paying them royalties for their works broadcast in the first half of 2022.
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Thus, for example, Nathalie Markhos, the creator of the series “The Jews are Coming”, “Tsuf” and “HaNachala”, wrote on her Facebook account: “I and my 1,800 fellow creators were informed in Hot, that we will not receive the payment we are due according to law, we paid in royalties. Hot decided that it simply refuses to retroactively pay the amount due to us according to the agreement they signed, for series that were already broadcast in 2022.”
The chairman of the Union of Screenwriters, Nadav Ben Simon, also wrote on his Facebook account: “How magical is the cycle of the year! The summer has passed and here is the autumn, and with it the springy rain, cool winds in the evening, and broadcasters that blatantly avoid paying royalties to creators. This time it is the Hot company, which is proud of its original works and its warm attitude towards the creators.”
Jerusalem / Photo: NEXT TV
The payment in question was supposed to reach the creators’ organization as early as September, but only now, after Globes approached both parties, was an agreement reached regarding the transfer of funds – and at the same time negotiations continued regarding a broader agreement.
Since 2011, the agreement has not been renewed
In the last decade, Hot has invested more than a billion shekels in source productions, and this is as part of the regulatory provisions in Israel, which require it to invest about 8% of its revenues in them every year. According to company officials, it invests even more than it is committed to.
At the same time, the company must pay royalties to the creators. In fact, any body that broadcasts a television or film work is obligated to pay royalties to copyright organizations, according to models established in negotiations with the various bodies – and not by virtue of regulation. One of the key bodies in the field is Teli, the royalties company for film and television creators in Israel.
In 2011, Teli signed an agreement with HOT, which was valid for about four years. In practice, the agreement was extended until a decision on changes was made. So far, no procedure has been done to change the agreement, despite the tremendous changes that have taken place in the world of television broadcasting – from new players in Israel such as Partner or Cellcom, to structural changes such as the introduction of streaming, such as Netflix and Disney.
This year, Bhut decided to reexamine the agreements, and a few months ago the parties sat down at the negotiating table to update the appropriate royalties. The concept was that the company’s revenues affect the level of royalties and are a key component of the formula, therefore if revenues are affected as a result of tougher competition or changes in the market – the royalties should decrease accordingly. Currently, the parties are still negotiating to decide on the appropriate rate.
Years of the Moon / Photo: Ohad Romano
Ofira Lubnitsky, CEO of Teli, issued a letter to the creators, in which she wrote that Hut demands that “the negotiations between the parties, which only began in August, apply retroactively from January 2022. We emphasize that during this period we held talks in an attempt to convince Hut to transfer the license fees , but we received a message that they decided not to do so” (license fees are the amount paid for the permission to use the works). As mentioned, now the parties have agreed, at least in this section.
“We will have accelerated negotiations”
Currently, the negotiations between Teli and Hot are still ongoing. Hot are interested in maintaining their rights in relation to the proper annual remuneration, and Teli are interested in setting a high level of royalties from now on.
The HOT company stated: “HOT is in talks with the organization. After the issue was settled between the parties, HOT announced the transfer of payment to Teli while maintaining its full claims and rights. In the last decade, the company has invested more than a billion shekels in original Israeli content, and it was and is the home of original Israeli creations.