A few months ago, Netflix quietly re-upped Higher Ground Productions, one of its most high-profile yet controversial talent deals. Surprised? I’m betting a bunch of people in Hollywood are, at least a little.
After all, the four year-old shingle of Barack and Michelle Obama hasn’t exactly lived up to the hope and promise associated with the 44th U.S. President. In fact, when you talk to producers and agents, they often cite Higher Ground as a cautionary tale of the streaming spending spree of the late 2010s—an expensive and vanity-driven bet on celebrity producers with zero experience that did more to make Netflix co-C.E.O.s Reed Hastings and Ted Sarandos feel good about themselves than to deliver content that Netflix members might actually watch. Same with the Obamas’ splashy-yet-ultimately-disappointing Spotify deal, which was not renewed.
The Netflix extension wasn’t a full endorsement: Higher Ground signed an exclusive four-year overall deal back in 2018 for a reported high-eight figures, and the renewal is for just two years with unknown financials. (A Netflix rep confirmed the extension but declined to comment on the terms.) Importantly, the deal was set to expire this past summer, and I’m told Netflix informed Higher Ground of the intent to extend it a few months in advance, right before that disastrous earnings call in April that revealed subscriber losses and led to a single-day drop of about $60 billion in market cap. The entire worldview of Netflix—and Hollywood as a whole—changed that day, leading to layoffs, fat-trimming, and the emergency oh-shit pulling of growth levers like the password crackdown and an advertising tier. Would the new Sarandos, the one focused more on profitability than branding and industry optics, have renewed Higher Ground after the Great Netflix Correction? I guess we’ll find out in less than two years.