A few years ago, Netflix changed its payment practices with producers. On that end, one of the biggest studios it does business with is Warner Bros. — which has provided the streaming giant with a lot of content over the years. Renewed for a second season, The Sandman is arguably one of the biggest shows shared by both umbrellas.
That is good news but, according to Deadline, not all is well between the two business partners. Now that the merger between WB and Discovery has settled in, the boss David Zaslav is looking at the books and wants to reassess some deals, as he is reportedly unhappy with the new pay structures that either aren’t fair or fail to pay out like they used to.
Under Netflix’s revised terms, Deadline says, they are “essentially paying producers over the course of 18 to 24 months.” That’s not good enough in his eyes and Zaslav reportedly “expressed his displeasure to a number of his key Warner Bros. Discovery colleagues over the last few weeks with some business consequences.” And the site hears content is becoming leverage.
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“For instance, we hear that he instructed his teams to pause selling finished shows to Netflix for a few weeks,” Deadline revealed. An anonymous insider at WBD who commented is dumbfounded, viewing Zaslav’s move as a rash one done by someone late to the party on how the deal works. “It’s an odd way of looking at it,” the insider said.
“It’s obviously the way the industry works and has worked with Netflix. He’s paid big numbers [by Netflix] and the company has been happy with that. It’s like he suddenly discovered what the payment terms were,” the person continued. Those terms turned a corner when Netflix launched its new tier with ad space they can sell during shows, including ones produced by Warner.
Netflix is home to WBTV products Sandman, Sweet Tooth, and much of The CW’s DC catalog that has The Flash at the top. Riverdale, All American, and Supernatural are also in the queue but Deadline notes Sandman is the catalyst for the friction, mostly, as Zaslav takes additional umbrage in the way the second-season renewal was handled.
Season 2 was announced three months after the show’s debut and this was despite episodes being watched for an estimated 200 million hours in their first ten days. With viewership like that, one would think there would be a quicker turnaround on the renewal. Over on DC Universe, the opposite happened when Warner itself couldn’t cancel Swamp Thing fast enough.
WB declined to comment about that back in 2019 and they aren’t saying anything now concerning Zaslav’s feelings toward Netflix, which could be because Discovery was guilty of something similar under his watch. CFO Gunnar Wiedenfels tried to implement a pay model that would have producers funding projects out-of-pocket and taking out loans before they saw any reimbursement.