Murphy was photographed March 28 at Line 204 Studios in Hollywood.
Murphy was photographed March 28 at Line 204 Studios in Hollywood.
Ruven Afanador

TV's First $300M Man: The Wild and Weepy Backstory of Ryan Murphy’s Blockbuster Netflix Deal

by Lacey Rose
April 04, 2018, 6:00am PDT

A restless creator, a looming corporate megamerger and a Sunset Tower courtship: How Fox's hitmaker behind 'American Horror Story,' '911' and 'Feud' was convinced to leave his home studio (and his "best friend" executive) for the biggest producer contract in television history: "'More' is my favorite word."

When Ryan Murphy arrived at Netflix's Hollywood headquarters on a stormy afternoon in January, the 53-year-old producer of such TV breakouts as Glee, The People v. O.J. Simpson and seven installments of American Horror Story says he was expecting a tour of the streaming giant's luxe new space and "maybe a croissant."

But coming in out of the rain, he was whisked to a theater on the top floor of the 14-story building, where content chief Ted Sarandos along with his heads of marketing, social media, scripted and young adults programming awaited. "We want you to know what you mean to us," Sarandos told Murphy, whose catalog of hits streams on the platform. Over the next two hours, the group dazzled him with highly confidential data on the viewing habits of its 117 million global subscribers and lit up a world map on which the countries where his programs were most popular shined brightest.

"I left that meeting feeling that I had seen the future," says Murphy. And in a very real way, he had.

A month later, on Feb. 13, the man who once joked that he planned to be "buried" on the Fox lot announced he'd be leaving his longtime creative home for a five-year Netflix contract worth as much as $300 million. It is by far the richest producing deal in television history and the latest salvo in an arms race that has left traditional media entities like 21st Century Fox sucking wind. Netflix launched the round of mega deals in August with its Shonda Rhimes blockbuster — the headlines screamed "$100 million," but that's said to be just the floor — then Amazon ponied up $250 million for the rights to make a Lord of the Rings prequel and Apple pledged nearly the same for 20 episodes of a drama series starring Jennifer Aniston and Reese Witherspoon. But now it seems those were all just the appetizers. In the two months since Murphy signed his head-swiveling pact, Hollywood has been able to fixate on little else. Some warn that the deal will be looked back on as the breaking point, the proverbial peak of peak TV; others see it as a sign that Hollywood, as it has existed for decades, is now over — that Silicon Valley has occupied and conquered. If the old guard is looking for sympathy, however, it won't get any from Sarandos. "They're all public companies, [which means] their economics are public. They can compete when they need to," he says, and then he rephrases: "Or they can compete when they want to."

Now, for the first time, Murphy and the other players are revealing how it all went down. And while the accounts vary in certain details, everyone involved agrees that Netflix relied as much on timing as it did on cash. After all, the renewal talks for Murphy's contract with 20th Century Fox Television — where he currently has seven shows in production, including two that were previously sold to Netflix — coincided with the company's prospective merger with Disney, which has all but frozen both entities as they await regulatory approval. "If the Disney transaction had been consummated," says FX chief John Landgraf, "I think the outcome with Ryan probably would have been different." But in that moment of uncertainty, the streaming service swooped in and offered Murphy his own galaxy within the Netflix universe, where he could make movies and documentaries and series and specials. Murphy's history of delivering prolifically and across genre — horror (Horror Story), period (Feud), procedural (911) and musical (the upcoming Pose) — combined with a gift for attracting A-list talent as well as media and awards buzz, shot his value into the stratosphere, especially as the streaming market was poised to get more crowded with new players, including, notably, Disney itself.

"It just isn't as draconian as everyone assumes," he says now, eager to downplay a narrative that he somehow is abandoning the company with which he built his empire. And, in truth, it isn't, since Murphy was able to negotiate a stunning deal that also allows him to stay involved in all seven of those Fox series, which come with significant paychecks of their own. He has no intention of moving his office off the Fox lot either, he says, a plan that has the blessing of Fox TV Group chairman and CEO Dana Walden, who doubles as Murphy's best friend. "As far as I'm concerned," she says, "he can have that office forever." When it's mentioned that the whole arrangement has sparked skepticism about Netflix's ability to make its money back, particularly considering Murphy still has three Fox-owned series in his queue, he and his new bosses cite his track record and his ambition. "Plus," he reasons, "numbers like this aren't just created out of thin air and gifted to you."

At the same time, it's not lost on Murphy that Netflix's two biggest deals have gone to him and to Rhimes, a gay man and an African-American woman. It's a development that he never imagined possible when he first began rattling the TV world as the industry's "enfant terrible" responsible for such genre-bending standouts as Popular and Nip/Tuck. "I think if you're an 'other' — if you're a woman or a gay person or a person of color — you have grown up in a business where you've been made to feel you're just lucky to be in this fucking game and you should stay in your corner," he says. "And I'm not saying that's been my experience at Fox, but traditionally that's what happened if you wanted to create content that wasn't the straight white fucking antihero. But the culture has shifted, and there's a group of us who were indoctrinated to think we weren't worthy of being paid, and now we realize, 'Oh no, we very much are,' and there are statistics from a business perspective to back it up."

Though the Netflix deal doesn't formally begin until July, Murphy's restless mind already is in overdrive. Over a late winter lunch at the Mercer Hotel in Manhattan, where the married father of two has been directing his FX transgender drama, Pose, he tests out a few ideas. "What if I do some cool thing," he says, "like a variety special with Barbra Streisand and Lady Gaga?" It's easily the sexiest of his hypothetical concepts and also one that few besides Murphy could feasibly pull off. There's one from transgender rights activist and Pose writer Janet Mock, too, and, if he can crack it, a health and wellness version of Chef's Table, one of Murphy's latest Netflix obsessions. If you're already asking yourself how much Murphy there is to go around, you are not alone; but the notion that he could be spreading himself too thin is one that the highest-paid producer in television dismisses out of hand. "The word 'more,'" he smiles, "is my favorite word."

***

Murphy's world as he knew it began morphing on a sticky evening last summer. Holed up in his TV room toggling between emails and whatever series he was bingeing in that moment, a flurry of news alerts crossed his inbox: Shonda Rhimes was leaving ABC Studios, her creative home of 15 years, for a massive, first-of-its-kind deal at Netflix.

"Suddenly," recalls Murphy, "I got 15 emails from friends and agents and even people within Fox saying, 'Well, the world has changed overnight.'"

Eager to get a taste of what that new world had to offer, he decided to play the field. With his next project, he would break from his routine, which in recent years entailed some version of: Murphy comes up with an idea, pitches it to Walden and Landgraf, is told to write it and then either Fox or FX clears room on its schedule. Of course, that process was becoming increasingly difficult to sustain, too. The four series that FX had from Murphy already was about the max that Landgraf felt he could support from a single producer. "There's no producer I'd rather have nearly half our dramas from than Ryan Murphy," says Landgraf. "But at a certain point, we have to curate a brand."

So, a few weeks after Rhimes' deal was announced, the pilot script for Murphy's Ratched, a prequel to One Flew Over the Cuckoo's Nest with Sarah Paulson attached to star, was sent to each of the streaming giants: Netflix, Amazon, Hulu and Apple. All four were desperate to move forward, and so began Murphy's tour of the streaming world. He went office to office, where executives pitched themselves to him, not the other way around. After Netflix won the bidding war — with a two-season commitment, plus a giant sum thrown in to stream more Horror Story — Murphy and Sarandos celebrated with a drink at the Sunset Tower. "It felt like cheating," the producer jokes now. "And looking back at it all, that was probably the gateway drug because they got to know me."

Still, at that point, Murphy had every intention of keeping his business at Fox, where he had been since an unfulfilling stint at Warner Bros. in the mid aughts. "When I landed at Fox, it was the first time I was allowed to lean into my eccentricities and my way of seeing the world," he says, "and I was rewarded for it over and over." He developed close personal ties, particularly to Walden, who is the godmother of his two young sons, and to Landgraf. "We've had incredible life moments together, and, of course, we've won big together, but it's more than that," says Murphy, wistfully. "When my child [Ford, now 3] had cancer, John and Dana were the people I'd call." Murphy had done two contracts at the company already without so much as considering what the marketplace had to offer.

Then, in early November, another series of news alerts came through. This time, Disney was in early talks to acquire Fox's film studio and much of its TV unit. It would be several more weeks before a deal valued at $52.4 billion was struck, but that didn't stop Murphy from playing out the scenarios in his head. What would become of his very non-Disney shows, he wondered, and the pair of executives who fiercely supported them? With more questions than answers, he had his team — a mix of top CAA agents and attorney Craig Emanuel — hit the brakes on renewal talks for at least a few more weeks. But just before Thanksgiving, with the merger all but finalized, Murphy knew it was time to see how serious Fox was. His reps called and said, "Come in with a great offer," and, in Murphy's recollection, which is backed up by a second source, the company did not. "Not even in the ballpark," Murphy says now. His team was told it was simply a starting point — Murphy's contract didn't end until June, after all — but that did little to ease the burn. "Looking back, I honestly feel that had they come in with a number that had been even something [closer to his expectations], out of my loyalty, even though I did not know what was happening [with the company], I would've gone there." He pauses. "But that's been my experience with the business side of Fox forever." (A source within Fox relays a different version of events, insisting, "Our starting point was higher than any media company has ever started.")

As effusive as Murphy can be in his praise of Fox's creative support and a cadre of its top executives, he has harbored resentment about the corporate end of the relationship for some time. "From a financial point of view, from a 'Can I have access to this information?' point of view, it was always frustrating for me, and I often felt infantilized," he says. As a financial participant on his programs, he says he was tired of feeling like he needed to audit them to see the real numbers; and though he'd ask repeatedly if he could attend international sales meetings and help sell his shows, he was consistently turned down, he says. "I always felt a pat, pat, pat on the head, and I didn't like it," he continues. "I don't mind the fact that Glee made $1 billion and I didn't make anywhere near that. Like, I signed the contract. But I want to be able to move in the world and know, 'OK, where are my shows selling? Can I be involved in the selling of them? Can I have a say in where they're going?' And I was never allowed to do that at Fox."

By mid-December, with the Disney news official, Murphy was among the Murdoch brothers' first calls. "We know that this is a very unstable time and that you're in this catbird seat," he says he was told, "but please don't do anything without talking to us." Murphy also got a call from Disney CEO Bob Iger and later a sit-down in his office on the Burbank lot. Though Iger was highly complimentary of Murphy's contributions, he told him he couldn't involve himself in the producer's deal negotiation before Disney's own had cleared the regulatory process. What Iger could do was try to assuage any fears Murphy had about the Disney-ification of his hardly squeaky-clean shows. "He said, 'Look, why would we pay all this money if we wanted to change the assets?'" Still, Murphy had concerns. "Every day it was me calling John and Dana saying, 'Have you heard anything? Where are you going? What are you going to do?' And they didn't know."

Around the same time, Netflix and Amazon stepped in and, per multiple sources, offered Murphy dramatically more than Fox had. "They both realized, 'OK, with this merger, there is an instability in his life,' and they were right," says Murphy. As the companies continued to sweeten their already generous offers, he made the rounds with another Fox-produced series, The Politician, an hourlong comedy starring Dear Evan Hansen Tony winner Ben Platt, Gwyneth Paltrow and, hopefully, Streisand. FX and Amazon instantly made plays for the show; but, again, Netflix proved the most appealing home. Two seasons were ordered, sight unseen. Meanwhile, the bidding war for Murphy himself seemed set to shatter records no matter where he landed. And though Fox stepped up in a very significant way — several say the new offer would have yielded the company's biggest producer pact ever had Murphy accepted — it couldn't provide the kind of fresh cash Netflix was willing to supply. "Look," says Landgraf, a vocal critic of the streamer, "Netflix was prepared to offer Ryan seemingly any amount of money at that moment to induce him … and since Netflix doesn't make money — it's negative free cash flow — it can essentially spend whatever it wants." It also became clear that Fox couldn't match the creative latitude being offered by Netflix, which had thrown in such perks as greenlight power on films and specials up to a certain budget.

"That's when it started to get very emotional," says Murphy, "because before it was just like, 'Well, let me see what's out there.' And now, suddenly, it was like, 'Wait, am I really going to leave this group of people?'" That internal monologue played out over several weeks and lots of weepy conversations, many of them with Walden. For a period, the pair engaged in serious discussions about her joining him at Netflix. "She's the best executive I have ever worked with and together we built my company into being," he says. "So, there were a lot of conversations: Do we expand that? Maybe as a mini studio?" But it became obvious to both that their timing was off. At least for now. "I genuinely considered it … but I feel a great obligation to this place where I've been for 25 years," explains Walden, who has accepted that her own future will be somewhat uncertain until the Disney deal is consummated. She adds of Netflix: "They're lucky. They got my favorite person."

Ultimately, Murphy decided he couldn't wait any longer to see how the chips would fall. "I realized that my emotions were about my own family and the fact that I finally felt like I had one [at Fox] — that I had been loved correctly by John and Dana and by Gary Newman and Peter Rice," he says. "But, at a certain point, I had to be honest with myself. I had to be like, 'Look, you're way too fucking old to be having Mommy issues. You are a grown man, you have toddlers, you have to go out into the world.'"

***

On Feb. 13, it was Murphy's name in the news alerts.

"Netflix Lures Ryan Murphy in Deal Said to Be Worth Up to $300 million," read a headline in The New York Times. Many more followed. Some openly wondered which producers would go next (Seth MacFarlane? Kenya Barris?); others jumped on what appeared to be the industry's latest pay equity saga, which Sarandos is quick to downplay. Without revealing so much as a deal point in Rhimes' or Murphy's pacts, he suggests that they are apples to oranges, structurally, and that the dollar figures that have spilled out into the press are inaccurate. According to multiple sources, Murphy's entails considerably more cash up front; and unlike Rhimes, whose pact includes her 30-plus-person company and a highly compensated producing partner in Betsy Beers, Murphy comes solo. But how many tens of millions more each producer will make will depend on individual, pre-negotiated terms that rely on metrics including output and longevity. There are at least a few sources who say Rhimes could conceivably make even more than Murphy once all is said and done, though several more say it's unlikely. What Sarandos allows, "People should be comfortable to know the deals are different enough that there isn't a gender disparity."

Murphy, for his part, is not comfortable discussing any deal other than his own, except to say, "I know enough about [Shonda] to know that she's going to have the world's best deal." He hasn't had any conversation with Rhimes about what hers includes or how she is spending her time, nor is he clear yet on how he'll spend his. All he seems certain of at this point is that his day-to-day is poised to change in part because he'd really like it to. One of the things that became clear to him during this process is that he doesn't want to be "just a showrunner" anymore. "It's just not interesting for me to sit in a room for eight hours a day with my mind as a sieve pouring out ideas," he says. Nor is he interested in waking up to a daily ratings report card. "I felt that frustration even with [The Assassination of Gianni] Versace, which I think is one of the best things I've ever done, but you couldn't win because it's like, 'Well, it's no O.J.,'" he says, referring to the first installment of American Crime Story, which smashed ratings records for FX and cleaned up on the awards circuit. "So, the Netflix way is an interesting way because it's a purely creativity way. It is simply 'Your show is doing great' or 'Your show is not doing so great.' That's it. It's not a humiliating 'Your show is down 30 percent.'"

For the time being, Murphy and Netflix are in honeymoon mode. But those who've worked closely with the producer wonder whether someone so fiercely competitive will be able to stand not knowing how, exactly, his work is performing — or live without the level of marketing muscle and executive attention he has grown accustomed to at Fox. There are questions, too, about how Netflix's all-at-once episode dump will go over with a man so adept at keeping audiences on the hook week to week. Just as there are about frustration spreading at Netflix, which will soon be paying Murphy a tremendous amount of money to still be producing fare for Fox. He's already said that his next year will be focused primarily on three shows — Pose, Ratched and The Politician — none of which Netflix owns; and given the enthusiasm with which he details upcoming seasons of Crime Story (Hurricane Katrina, as a theme, is back in, Monica Lewinsky is out) and Horror Story (he's throwing in Joan Collins, he says, and is "interested in Anjelica Huston"), it's unlikely he'll sit on the sidelines there either. "Netflix is just betting that ultimately he's going to want to do new things and that he can handle multiple shows," says a source, "and this is what it took to get him."

The mere fact that his bandwidth still is being questioned will drive Murphy mad if he allows it to. "People have always made me feel like somehow being prolific is a bad thing," he says, "but I don't want to apologize for it." And perhaps he shouldn't need to. In recent years, Murphy has gone to great lengths to surround himself with the kinds of collaborators who allow him to successfully take on more. He describes his process now as "template building," which suggests he's very hands-on in the idea-generation phase of a project along with the casting, writing, directing and editing of the pilot episode, and then he tends to lean on that strong band of No. 2s, including Tim Minear and Brad Falchuk, to carry out that vision. He'll still read scripts, watch cuts and weigh in on a series' ongoing aesthetic (he's been known to obsess over such seemingly minute details as an actress' wig or a lamp in a character's bedroom), but he says it's that willingness and ability to delegate that's allowed him to amass an empire.

Murphy's key collaborators are expected to stay put on his series at Fox, at least for now, while he turns his attention to breaking new voices. The majority of those he intends to share his platform with going forward will be women, people of color and members of the LGBTQ community, he says, all groups he's been actively training through his 2-year-old Half initiative. The latter is what ingratiated Murphy to Netflix's original content chief, Cindy Holland. "We're both Midwestern gay kids," she says, "and we both have a really strong desire to give voice to those who have largely been voiceless on TV." Murphy's goodwill will extend to those outside his immediate creative orbit, too. Since signing with the streaming service, he's taken Lena Dunham and her producing partner Jenni Konner to dinner and doled out the kind of negotiating advice he wishes he'd received earlier in his career. He's getting a meal with Crazy Ex-Girlfriend creator-star Rachel Bloom on the books next. "A lot of people in Ryan's position would simply be trying to employ the people they care about, and that's great, but it's the difference of giving a man a fish and teaching a man to fish," says Dunham. "So, yes, the money is insane and symbolic, but with him, it's this amazing thing of, 'There's more of this and everybody deserves to be in charge of their creative destiny.'"

In terms of his own life, Murphy says he's been surprised by how little has changed in the two months since the Netflix deal was finalized. "I thought I'd go crazy, even for a day," he laughs now, and then he strikes a more serious tone: "But the thing that this deal did for me is made me realize how content I was with what I had. I don't need a plane. I don't want a Ferrari. I don't want another house. What am I going to do? I mean, how many more pairs of these [YSL] boots can I buy?" After a waiter comes by to clear the table, Murphy reveals the only major expenditure that he's made: a multimillion-dollar donation to Children's Hospital Los Angeles in honor of his son, Ford, who's now two years cancer-free. In fact, one day soon, there will be a hospital floor in the family's name. "Honestly," Murphy says, his voice cracking, "it was the first thing that flashed through my mind when we signed the deal because that — that means something to me."

This story first appeared in the April 4 issue of The Hollywood Reporter magazine. To receive the magazine, click here to subscribe.