Rian Johnson's Team $468 Million Dollar 'Knives Out' Payday & Future Impact on the Industry
The recent news about Rian Johnson’s Knives Out payday to the tune of $100 million has piqued the curiosity of a few people around the internet. Johnson and his producing partner, Ram Bergman, in addition to the 2019 film’s star Daniel Craig have been reported to each be making $100 million in an overall deal for two Knives Out sequels for Netflix in exchange for $468 million.
Why did Johnson get such a great deal? Is it possible this is Netflix’s way of trolling Star Wars fans after their tantrum from Star Wars: The Last Jedi’s controversial release? Johnson of course has had a mega-hit movie in Star Wars: The Last Jedi and Knives Out itself earned north of $300 million on a $40 million budget. But, again, Knives Out earned $300 million on a $40 million budget. Now, instead of $40 million, we have a budget for Johnson’s sequels at $234 million per movie! Admittedly, there is obviously plenty of profit to be made at that sort of gross but that was also a theatrical release and it turns out we are starting to see some life to the idea that studios are not making the sort of profits from at-home streaming as they could from theaters.
As it has been debated before and will be again (and yes I will do it eventually too), let’s ignore the “Netflix v. Theatrical Release” debate for now. I want to focus on why Rian Johnson, Ram Bergman, Daniel Craig, and the Knives Out 2019 film got the major payday that it did and whether other talent (directors, producers, and actors) should consider a similar path.
Rian Johnson and Ram Bergman did something you don’t see often anymore: they made an original intellectual property. By holding on to their intellectual property rights for Knives Out the duo were able to shop potential sequels to other distributors instead of the distributor for the 2017 release of the original film, Lionsgate, maintaining the rights to the franchise. This allowed Netflix, the somehow eternally starved for content streaming service, to offer the highest bid to add a proven intellectual property from a team of talent that has proven financially successful.
Could this be a path to future original films in a Hollywood that is regularly decried as being too sequel and franchise-oriented? Potentially! Johnson’s deal proves that it is at least possible for a successful director to have enough leverage to hold on to intellectual property rights. It seems almost impossible to actually find the details on other director’s that own the rights to their films. Does Christopher Nolan have the rights to Inception? Does JJ Abrams have the rights to Super 8? We do know one of the most successful directors of all time owned his intellectual property and subsequently became a billionaire, George Lucas. But why, even over 40 years since the release of Star Wars, do we not see regular use of intellectual property rights held by talent?
It is probably fair to say that studios may have learned their lesson and tried to avoid at all costs letting talent hold intellectual property rights in bargaining discussions and certainly the overall sheer number of sequels today signifies there is less of a chance for a director to even get a deal for their original idea as studios avoid the risk of an original property not catching on with an audience. In the old paradigm of Hollywood, in which profits were based on the theatrical and home media release controlled between a few tried in true institutions such as 20thCentury Fox, Disney, and Sony there may simply just not have been as hot of a market for original intellectual property with plenty of sequels for every studio in town. The cinema landscape looks dramatically different in the post-Covid world with streaming companies creating a very hot market ripe with competition.
Look around and you will see absolutely no shortage of franchise films being released, either for the first time or after a previous failure. An intellectual property that has already proved to be recently successful pops up on the open market for any bidder to add to their content library is about the rarest and most craven possessions for any studio, but even more so for those studios with the least successful franchises in their library. Take a look at Netflix’s most popular films. Some of them are definitely based on established properties, in the sense that the intellectual property was in some media form before such as Enola Holmes which is based on a book, but none of them have a history of success in any medium. Netflix does not have a Batman, Star Wars, Fast and Furious, or Spiderman as Warner Bros, Disney, Universal, and Sony do. Knives Out isn’t that, but it is about the closest thing you find on the open market.
If Nolan does have the rights to Inception, all I am saying is I bet he could make a huge deal licensing out the rights to Netflix to make a sequel. As for the other talent in Hollywood, after becoming established in the industry with a hit blockbuster (Adam Wingard, director of Godzilla vs Kong comes immediately to mind) it looks incredibly lucrative right now to develop and hold original intellectual property perhaps even at an upfront cost on the contract.
