Netflix took a $39 million write-down for its fiscal fourth quarter related to two projects involving Kevin Spacey, who became one of the key figures in the sexual harassment and abuse scandals that began late last year.
During today’s fourth-quarter earnings presentation, after announcing another round of record-setting results, the company did not specify the exact causes of the accounting move. But a source familiar with the accounting for the quarter later confirmed to Deadline that the write-down accounted for the final episodes of House of Cards as well as the feature film Gore.
Production of the sixth and final season of House of Cards, the signature original drama that debuted in 2013, was suspended in late October after numerous accusations against Spacey. Stakeholders later indicated it could be revived without him, following a long hiatus. Gore, the other project written down in the company’s results, was a film about Gore Vidal that Spacey had just wrapped.
“These types of business write-downs are an ongoing facet of Ted [Sarandos’] world in terms of producing content,” said CFO David Wells, referring Netflix’s content chief. “We just hadn’t had one of this magnitude and related to the societal reset around sexual harassment, so it was somewhat unusual in that respect.”
Sarandos spun the write-down as a positive sign. “It’s a good indicator, too, when you have a lot of projects going, high-profile projects,” he said. “We’ve moved away from much concentration risk from any one project having a material impact.”