Monday 10 December 2018

Netflix splashes out $300m to steal Glee creator Murphy from Fox

Glee was among the hits created by screenwriter, director and producer Ryan Murphy who is the latest creative talent to be lured to Netflix as it battles to hold on to subscribers
Glee was among the hits created by screenwriter, director and producer Ryan Murphy who is the latest creative talent to be lured to Netflix as it battles to hold on to subscribers

Erich Zann

Netflix has signed Ryan Murphy, creator of hits such as 'American Horror Story' and 'Glee', to a contract to make series and films, wresting him away from 21st Century Fox in a dramatic reordering of the TV business.

Murphy and his production company will get $300m (€243m) over five years, according to a person familiar with the matter. He follows Shonda Rhimes, the former ABC megaproducer behind 'Grey's Anatomy' and 'Scandal', and Mark Millar, the comic-book wunderkind, on a rapidly expanding roster of creative talent Netflix is opening its wallet to assemble.

The Murphy deal is likely to add more pressure on Fox and its deal partner Walt Disney, which had both been lobbying to retain him, to show they have the right strategy to fend off their big-spending rival from Silicon Valley. The financial terms of Murphy's contract are also likely to add to the chorus of Netflix sceptics who argue its $8bn-a-year programme budget isn't sustainable over the long term.

Murphy, 52, had been expected to re-sign with Fox but began to waver after the company agreed to sell much of its entertainment assets to Disney in a $52.4bn deal, people familiar with the matter told Bloomberg in December. Disney CEO Bob Iger personally called Murphy after the acquisition was announced to assure him the family-friendly home of Mickey Mouse wanted the kind of edgy programming Murphy produces, Murphy said last month.

But the Disney deal emboldened Netflix, Amazon and at least two other parties to pursue Murphy, the people said.

Netflix shares rose as much as 2.2pc to $264 in early New York trading and are up more than 80pc in the past 12 months.

Netflix will burn through about $4bn cash this year, and plans to increase its borrowing, in a quest to rapidly assemble a consistently fresh library of programming to keep its 117.6 million subscribers happily paying. Disney and other companies are busy pulling their programming off Netflix to provide their own streaming services, putting more pressure on Netflix to come up with its own material. (Bloomberg)

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