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‘Knives Out’ followers: Behind Netflix’s $ 469 million Power Play



11:56 PDT 06-06-2021

by

Borys Kit

Sources say Rian Johnson, Ram Bergman and Daniel Craig are set to walk away with up to $ 100 million each.

A little over a year ago, it looked like an open and closed case.

In February 2020, Lionsgate CEO Jon Feltheimer said during a quarterly earnings call that the company officially moved on to a successor to Knives out, the surprise box office and the critical smash whodunnit starring Daniel Craig and written and directed by Rian Johnson.

But on March 31

, in a twist worthy of Agatha Christie, the revelation came that Lionsgate would not release the sequel at all. Instead, two successors were made to Netflix, which inked a $ 469 million-dollar deal with Johnson and his T-Street production partner, Ram Bergman, both of whom are represented by the CAA.

Dealpoint was remarkable: The pact gave Johnson enormous creative control, sources say Hollywood Reporter. He does not have to take notes from the streamer. The only contingencies were that Craig should play in the sequels, and that each of them should at least have the budget for the 2019 film, which was within $ 40 million. Sources say Johnson, Bergman and Craig are set to walk away with up to $ 100 million each.

The second company to miss the sequels was MRC, the Beverly Hills-based production company that financed the first film. (MRC is also a co-parent of THR through a joint venture with Penske Media entitled PMRC.) Sources say MRC had a film deal with Johnson and Bergman, the filmmaker and producer known for critically beloved, modestly budgeted one-off thrillers Brick and Looper before they made Star Wars: The Last Jedi. An MRC representative said the company was “proud” to have partnered with Johnson and Bergman on the first Knives out and noted that the duo “has always controlled the rights” to the franchise. (MRC is a minority investor in T-Street, but it will not participate in the storms of the new transaction as its’ shareholding in the production company arose after Knives out was already made, which did not give it any part of that movie.)

Sources note that Lionsgate had what was considered a solid deal, with the company having first bargaining power and last right of rejection, all part of bargaining safety nets that companies normally protect themselves from losing projects. (Lionsgate and CAA declined to comment.) And Johnson and Bergman were considered big supporters of the theater experience.

But that was before the pandemic hit, theatrical took a nose and backend became non-existent. In January, with the pandemic in full swing and an expected summer production start for a sequel, Johnson and Bergman questioned the viability of theatrical release in the short term. CAA began trading the deal, and streamers like Netflix jumped hard. MRC and Lionsgate, which in normal times may have got the project, could not compete. “It was a perfect storm,” says one insider. “This would not have happened a year ago.”

For Netflix, despite the price tag, the deal made sense on several levels. The streamer gets an instant and proven franchise with sequels to a movie that earned $ 311 million globally. And that weakens a theatrical competitor.

“Yes, it pays too much, but Netflix plays chess while everyone else plays chess,” says a director familiar with the deal. “It takes a proven theatrical item from the board and puts it in his pocket. And that’s another way they retrain audiences to think about streaming and their business over a studio. ”

For others, the deal shows the leverage the in-demand talent is currently enjoying thanks to competition from streamers. “If you’re talented right now and you want to bet on yourself, it’s a pretty good time.”

A version of this story appeared in the April 7 issue of The Hollywood Reporter magazine. Click here to subscribe.




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