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

Irish Independent - Business Week - - BUSINESSWEEK - 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 fam­i­lyfriendly 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)

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

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