EXCLUSIVE: David Zaslav isn’t happy with Netflix.
The Warner Bros. Discovery boss has been railing against his rival’s payment terms in a move that could potentially open up a new front in the streaming wars.
It’s a topic that has come to the fore after one big TV series – The Sandman, the Warner Bros. Television-produced fantasy drama was recently renewed for a second season at Netflix.
The crux of the issue is that Zaslav is unhappy with the way that Netflix deals are structured, essentially paying producers over the course of 18 to 24 months. This is not a new discovery, Netflix changed the way that it parses payments a few years ago.
But Zaslav is now in charge of one of its largest outside suppliers – Warner Bros. Television, which in addition to Neil Gaiman’s The Sandman, makes Netflix originals such as Sweet Tooth, which comes from Robert Downey Jr., Penn Badgley-fronted serial killer thriller You, and most recently Manifest, which it saved after it was canceled by NBC. Through the studio’s previous output deal for CW content, Netflix also licenses a slew of WBTV shows including some of its most popular library titles such as All American, The Flash, Riverdale and Supernatural.
Zaslav is understood to have expressed his displeasure to a number of his key Warner Bros. Discovery colleagues over the last few weeks with some business consequences.
For instance, we hear that he instructed his teams to pause selling finished shows to Netflix for a few weeks.
“It’s an odd way of looking at it,” one Warner Bros. Discovery insider told Deadline. “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.”
Warner Bros. Discovery also recently secured new payments for a number of its shows from Netflix when it launched its ad-tier, paying the studio for the rights to sell adverts within a number of its shows.
Zaslav is a famously hands-on boss and his unhappiness with the rival streamer comes after The Sandman renewal.
Despite its hefty budget, one would have expected a relatively straightforward — and quick — deal for the show, which comes from Gaiman, David S. Goyer and Allan Heinberg and is produced by Warner Bros. Television in association with DC Entertainment, after it was watched for around 200M hours in its first ten days. The season two pickup instead came three months after the show was released.
These are not new issues for television producers. In fact, Discovery, pre-Warner Bros. merger, faced its own backlash after it tried to implement a new payment model, spearheaded by now Warner Bros. Discovery CFO Gunnar Wiedenfels, that would see producers having to finance shows themselves and take out loans to cover production costs before receiving payment on delivery.
Warner Bros. Discovery declined to comment.