Chad Fitzgerald was recently featured in Puck’s What I’m Hearing email newsletter, in which he weighs in on Netflix’s bid to purchase Warner Bros. In the newsletter, Chad speaks to Eriq Gardner about the slew of legacy profit-participation contracts that Netflix is likely to take on if its purchase of Warner Bros. proves to be successful.
He explains that if the deal goes through, Netflix will inherit a multitude of Hollywood accounting disputes, prompting the company to begin utilizing profit participation as a method of contract structuring.
“I’ve never heard of a Netflix audit,” Chad tells What I’m Hearing. “They haven’t done profit participation. They’re going to have to change.”
The newsletter goes on to opine that although Netflix famously structured its successful streaming empire around full ownership and streamlined deals, the service will now be forced to “navigate the maddening world of downstream revenue splits, audit rights, and contractual definitions of net profits.”
