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A few years ago, it seemed every week there was a new eight- to nine-figure deal between a high-profile writer-producer and a Hollywood studio or streaming service.<\/p>\n
These lucrative pacts made people like Shonda Rhimes, Ryan Murphy and J.J. Abrams essentially in-house producers for entertainment companies that were in an arms race to lock down top-tier talent for the streaming wars.<\/p>\n
Even people with limited to no experience in entertainment secured rich deals based largely on name recognition, such as former First Family Barack and Michelle Obama and the Duke and Duchess of Sussex. But lately such deals have fallen out of fashion among some executives, as media and entertainment companies rethink how they spend their resources.<\/p>\n
The thinking behind these mega-deals was for the popular showrunners to bring in bigger audiences and help fill the platforms\u2019 libraries with new hit series. But as subscriber growth on streaming services has slowed, companies are analyzing whether it\u2019s worth it to renew the deals.<\/p>\n
\u201cI do think these deals are going to be fewer and farther apart because there\u2019s a lot of belt-tightening right now,\u201d said Susanne Daniels, YouTube\u2019s former global head of original content, who now teaches at UCLA. Daniels estimates the number of new signings of so-called overall deals will drop significantly next year.<\/p>\n
Earlier this month, a podcasting deal between Prince Harry and Meghan Markle\u2019s Archewell Audio and Swedish streaming giant Spotify came to an end, after the royals\u2019 company produced just 12 episodes of a single show in 2\u00bd years. Spotify executive and the Ringer founder Bill Simmons, speaking on his own podcast, called them \u201cf\u2014 grifters.\u201d The Montecito-based couple still has a Netflix deal and has produced series including docuseries \u201cHarry & Meghan,\u201d \u201cLive to Lead\u201d and the upcoming \u201cHeart of Invictus,\u201d which will come out this year.<\/p>\n
Murphy, the much more productive and experienced producer behind \u201cAmerican Horror Story\u201d and \u201cGlee,\u201d is said to be in talks for a new deal with Disney, five years after signing a deal worth up to $300 million at Netflix. Netflix and a representative for Murphy declined to comment. Disney did not respond to a request for comment.<\/p>\n
The Disney deal talks are advanced but not finalized and aren\u2019t expected to conclude until the Writers Guild of America strike ends, according to people familiar with the matter who were not authorized to comment.<\/p>\n
Murphy\u2019s output at Netflix had mixed results. Early efforts, such as \u201cThe Politician,\u201d \u201cHollywood\u201d and \u201cThe Prom,\u201d didn\u2019t do as well as the company would have liked, industry observers said. However, two of Murphy\u2019s later shows, \u201cDahmer \u2014 Monster: The Jeffrey Dahmer Story\u201d and \u201cThe Watcher,\u201d were successful.<\/p>\n
\u201cDahmer\u201d has been watched for more than 1 billion hours and is Netflix\u2019s third-most-popular English-language show, according to company data. The first season of \u201cThe Watcher\u201d is ranked 10th, with more than 447 million hours watched. Murphy still has several projects in the Netflix pipeline, including two more installments of the \u201cMonster\u201d franchise.<\/p>\n
\u201cThey had to spend a lot of money early on because they were trying to drive subscriber growth, and I think they\u2019re in a position now where they\u2019re watching a little bit more closely the money that they\u2019re spending,\u201d said Ryan Webb, a Los Angeles-based entertainment attorney at Greenberg Glusker.<\/p>\n
The streamer has said it plans to keep its content spending at around $17 billion on average annually through 2024.<\/p>\n
While Murphy and the royals represent wildly different situations, the shuffles come as streaming services are looking closely at their finances amid Wall Street pressure to pare down costs. Many tech and entertainment companies have laid off staff and canceled programs.<\/p>\n
Even big-name hit makers such as \u201cAlias\u201d creator Abrams\u2019 production company Bad Robot have found themselves under the microscope. Warner Bros. Discovery-owned HBO last year decided not to move forward with the Bad Robot sci-fi series \u201cDemimonde\u201d due to a disagreement about the budget. Bad Robot in 2019 signed a $250-million overall deal with what was then called WarnerMedia.<\/p>\n
Hollywood studios also are grappling with a writers\u2019 strike, which has shut down productions as the Writers Guild of America pushes to increase the amount of money scribes make from streaming.<\/p>\n
Insiders expect studios to use the strike to trigger force majeure clauses that allow them to exit deals. However, companies may have reasons to be careful when using that cost-cutting tool, said Elsa Ramo, managing partner at Ramo Law PC, an entertainment firm.<\/p>\n
\u201cThere may be political reasons or messaging reasons or relationship reasons that could temper a very cutthroat business decision that you\u2019re contractually allowed to do,\u201d Ramo said. \u201cI think those conversations are happening right now.\u201d<\/p>\n
The pullback is especially acute in the podcasting industry, where some companies have struggled to make money despite the rapid growth in the number of shows produced.<\/p>\n
Spotify Chief Executive Daniel Ek said during an April earnings call that the company wants to avoid \u201coverpaying\u201d for exclusive talent in podcast deals. The company has restructured its podcasting division and made efforts to reduce its costs, including by recently cutting 200 jobs and consolidating Gimlet and Parcast, two production companies it acquired. Popular hosts include the controversial comic Joe Rogan, who has a licensing deal with Spotify worth an estimated $200 million.<\/p>\n
\u201cWe\u2019re going to be very diligent in how we invest in future content deals,\u201d Ek said on the call. \u201cThe ones that aren\u2019t performing, obviously we won\u2019t renew, and the ones that are performing, we will obviously look at those on a case-by-case basis on the relative value.\u201d<\/p>\n
While the writers\u2019 strike and the economic environment have caused a lull in overall deals, companies have still signed some major pacts recently and doubled down on existing relationships.<\/p>\n
Netflix renewed its landmark agreement with Rhimes in 2021 and announced an expansion of training programs with her Shondaland production company earlier this year.<\/p>\n
Shondaland has created some of Netflix\u2019s biggest hits, including \u201cBridgerton\u201d and its spinoff show, \u201cQueen Charlotte: A Bridgerton Story,\u201d as well as the limited series \u201cInventing Anna.\u201d<\/p>\n
Last year, Walt Disney Co.\u2019s 20th Television and ABC Signature extended their overall deal with former NBC executive Warren Littlefield\u2019s production company. In 2021, \u201cInsecure\u201d showrunner Prentice Penny signed an overall deal with Disney\u2019s Onyx Collective. Earlier this year, \u201cFleabag\u201d creator Phoebe Waller-Bridge renewed her deal with Amazon Studios. In January, Warner Bros. reupped its pact with prolific TV producer Greg Berlanti.<\/p>\n
\u201cThere will always be a demand and a premium paid for talent that can deliver, especially if someone has an established track record,\u201d said entertainment lawyer Briana Hill, a partner at Pryor Cashman.<\/p>\n
View this article at LA Times<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":" What Ryan Murphy\u2019s and Harry and Meghan\u2019s deals say about the state of Hollywood: A few years ago, it seemed every week there was a new eight- to nine-figure deal between a high-profile writer-producer and a Hollywood studio or streaming service. These lucrative pacts made people like Shonda Rhimes, Ryan Murphy and J.J. Abrams essentially
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