(Bloomberg) -- Netflix Inc.’s surprise $300 million deal to poach Ryan Murphy from 21st Century Fox Inc. shows just how easy it’s getting for rich tech companies to steal Hollywood’s top talent.
Netflix, which released its first original series just six years ago, has now lured two of the most successful producers in TV -- Murphy and Shonda Rhimes -- from two of the industry’s most valuable companies. Rhimes, the producer of “Grey’s Anatomy” and “Scandal,” bolted from Walt Disney Co.’s ABC in August.
No longer content to license shows from other media companies, Netflix and fellow technology giant Amazon.com Inc. are throwing money at Hollywood’s top talent to lure them away from those studios. They are upending the TV business in the process, driving up the cost of talent and weakening many of the traditional powers.
Hollywood studios have endured threats from outsiders before, but the list of talent making the jump grows by the day.
Netflix, with an annual budget of $8 billion, is paying Murphy, the producer of “American Horror Story,” about $300 million over five years to make shows and movies for the streaming service. The money will support overhead for Ryan Murphy Productions along with his fees for writing, directing and producing.
Murphy was in the process of negotiating a new deal at Fox when Disney agreed to buy its crosstown rival for more than $52 billion. Disney Chief Executive Officer Bob Iger made a personal call to Murphy, assuring him that “the reason Disney was interested in buying Fox is they believed in the assets and the executives and their creators,” the producer recalled. “He was very sweet and transparent and kind.”
Rhimes was the biggest name to leave traditional TV for streaming when she announced she was signing a long-term deal with Netflix. She’d worked at ABC for more than a decade, becoming one of the few showrunners and TV writers known to the public.
Rhimes is also one of the few prominent black showrunners in Hollywood, and has led the way in creating more diversity onscreen. Netflix gave her more than $100 million to ease the transition in a multiyear deal.
Robert Kirkman, the creator of cable TV’s biggest hit, “The Walking Dead,” signed a two-year deal with Amazon last August, days before Netflix announced its deal with Rhimes. Amazon spent an estimated $4.5 billion on video programming last year and plans to increase its budget this year. Amazon’s “The Marvelous Mrs. Maisel” won the Golden Globe award for best TV comedy.
Netflix knows its customers love comic book movies and TV shows thanks to a pair of deals with Disney, owner of Marvel Studios. So last year it acquired the company that published graphic novels “Wanted” and “Kick-Ass,” both of which were adapted into hit movies for Universal Pictures.
Netflix and Millarworld founder Mark Millar will jointly produce films, series and children’s shows based on comic-book characters for the streaming service, while the publisher will also continue to make comics under the Netflix label. The streaming service will turn some of Millar’s other creations into film and TV properties that can replace Marvel when its deal with Disney ends.
New Golden Boy
Shawn Levy rose through the ranks of Hollywood by directing comedy films for major studios, including “Cheaper by the Dozen” and “Night at the Museum.” Yet he has since been reborn as one of the hottest producers in TV thanks to “Stranger Things,” the surprise Netflix fantasy hit. The streaming service locked up Levy’s TV business last year, and now funnels all kinds of high-concept projects his way.
Amazon has also allied itself with Sharon Horgan, the British comic and actress who created its critically beloved comedy “Catastrophe.” Though Horgan has a show on HBO (“Divorce”), Amazon gets first dibs on all future work.
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