Netflix[1] 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 $300 million (roughly Rs. 1,900 crores) 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 Co[2]., 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 the company's $8 billion-a-year (roughly Rs. 51,100 crores) programming 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 $52.4 billion (roughly Rs. 3.35 lakh crores) deal, people familiar with the matter told Bloomberg in December. Disney Chief Executive Officer Bob Iger personally called Murphy after the acquisition was announced to assure him the family-friendly home of Mickey Mouse wanted the kind of edgy programming Murphy produces, Murphy said last month.
But the Disney deal emboldened Netflix, Amazon.com[3] and at least two other parties to pursue Murphy, the people said.
Netflix will burn through about $4 billion (roughly Rs. 25,500 crores) cash this year, and plans to increase its...