00:00How did some basically unknown director allegedly scam Netflix for over 50 million dollars?
00:06And why is Keanu Reeves involved?
00:08A recent New York Times expose by reporter John Carreyrou revealed how the streamer had apparently been funneling money
00:14to director Carl Rensch for a TV show he doesn't seem to have actually ever planned on completing.
00:20So what in the world really happened here?
00:23Here's our take.
00:23The first thing you might think upon hearing this news is... who?
00:27Carl Rensch isn't a very well-known director because he's only ever made one feature film.
00:32And it was, perhaps now unsurprisingly, also a disaster.
00:3647 Ronin, a samurai drama starring Keanu Reeves, was a huge flop when it premiered in 2013.
00:42You are not a samurai.
00:45With a bloated budget of over 175 million dollars, it only pulled in just over 20 million its opening weekend
00:53and ended up losing the studio well over 100 million dollars.
00:57But even before its disastrous opening, the film had a tumultuous run.
01:01Rensch, who had only directed a few commercials and shorts before being handed the reins of this behemoth of a project,
01:08found himself floundering pretty early on.
01:11His vision of the film didn't really line up with what the executives wanted.
01:15He seemed to have some trouble directing the actors on set,
01:17and there were some reports of Rensch having to be kicked out of the editing room during post-production.
01:23Though, according to Variety, two highly-placed sources deny that that happened.
01:27With, um, big-budget film also comes big-budget problems.
01:32Big-budget. I've got broad shoulders. I can carry it.
01:35Once the film premiered and flopped both critically and financially to such a huge degree,
01:41many thought that it would be the end for Rensch as far as big-budget projects.
01:45Even Rensch himself for a while, at least.
01:47No more talk.
01:48After 47 Ronin, he returned to making commercials.
01:51But, during this time, he also started developing a new big idea.
01:55Initially called White Horse, the show that would come to be known as Conquest was,
02:00according to the New York Times,
02:01a sci-fi TV series about a genius who invents a human-like species called the Organic Intelligent.
02:07The O.I. are deployed to trouble spots around the globe to provide humanitarian aid,
02:12but humans eventually discover their true nature and turn against them.
02:16At first, Rensch financed the show with his own money,
02:19working to make a few very short episodes that could then be shown to larger production companies
02:24in the hopes of securing financing for the full series.
02:27Rensch had sought to shoot outside of the control of Hollywood unions,
02:31and so dangerous conditions began popping up from the onset,
02:35including a continuous 24-hour shoot and one actress having to be taken to the emergency room
02:40due to contracting hypothermia while filming.
02:43Many of Rensch's issues with scope and keeping to a budget began to rear their heads again as well,
02:48eventually leading him to seek outside funding.
02:50Though this money helped keep things going for a while,
02:53he still continued to fall behind schedule,
02:55and eventually had to ask his friend, Keanu Reeves,
02:58to step in as a producer to help secure even more financing.
03:02Nevertheless, Rensch did eventually end up with a handful of short episodes to shop around,
03:07and initially caught the interest of Amazon.
03:09But Netflix was looking for the next big thing and swooped in,
03:13offering Rensch more money and creative control.
03:16According to the New York Times article,
03:18Netflix snatched the project away at the last minute,
03:20convinced it had the potential to become a sci-fi franchise,
03:24as successful as Stranger Things that could spawn sequels and spin-offs.
03:27In their mindless drive to find a new tentpole,
03:30Netflix didn't check for a few important items in this project
03:33they were forking over tens of millions of dollars for.
03:37Like, if it had a finished script.
03:39To the surprise of no one,
03:41starting production without even close to a finished script
03:43seems to be par for the course for nightmare productions that lose a bunch of money.
03:48Hello, Angel.
03:49Rensch also once again started causing problems on set.
03:53The New York Times article explains,
03:54In Sao Paulo,
03:56the local film industry union dispatched a representative to the set
03:59after receiving a complaint that Mr. Rensch was mistreating the team
04:03with shouts, cursing, and excessive irritation.
04:06According to a letter the union sent Netflix's local production partner,
04:10his behavior became increasingly erratic,
04:12to the point that several people close to him,
04:14including his wife and Keanu,
04:16decided to hold an intervention.
04:18But this unfortunately didn't lead to long-term changes.
04:21By the time 2020 rolled around,
04:23Netflix had already spent over 40 million dollars on the project,
04:27and Rensch started asking for more,
04:30telling the company that the project would collapse without a new injection of funds.
04:34They sent 11 million more.
04:36Instead of using the funds to work on the production as agreed,
04:40he transferred almost all of it into his own account,
04:43and used it to bet on the stock market,
04:45and ended up losing over half of the money in just a few weeks.
04:49Over the course of lockdown, his behavior grew more and more unstable,
04:53as he seemed to lean further into his interest in COVID-related conspiracies,
04:57once even telling a Netflix executive in an email that he could map the coronavirus signal emanating from within the Earth.
05:04Rensch had also allegedly become a danger at home back in 2019,
05:07apparently accusing his wife of plotting to have him killed,
05:11throwing things at her, and punching holes in the wall,
05:13eventually leading her to file for divorce.
05:15He had also begun betting on stocks using Netflix's money again,
05:19but this time he used what was left of the 11 million dollars to buy Dogecoin.
05:24His crypto bet paid off,
05:26and he ended up walking away with nearly 27 million dollars in the end.
05:30Instead of using this money to fund the project, however,
05:33he went on a shopping spree.
05:35He bought five Rolls Royces, a Ferrari, a $387,630 Vacheron Constantine watch,
05:43and millions of dollars worth of high-end furniture and designer clothing.
05:46The tab came to 8.7 million dollars.
05:50In his divorce case, he said the items were all props for the show,
05:54and the money was all Netflix's,
05:55and so not something he should have to split with his soon-to-be ex-wife.
05:59But then, in the Netflix suit, he argued that not only was the money his,
06:03but that Netflix actually owed him millions more.
06:07After the years-long back-and-forth,
06:09Netflix had begun to realize that Conquest likely wasn't ever going to materialize,
06:14and so decided to wash their hands of it.
06:16But Wrench wasn't done with Netflix.
06:18He went into arbitration with the streamer,
06:20alleging that not only was the money he earned from the crypto all his,
06:24but Netflix still had to pay him an additional 14 million dollars.
06:27Netflix, already 55 million dollars in the hole,
06:30for a show that they've never seen any proof actually exist in any capacity.
06:35They've still never even seen any of the footage he allegedly did shoot.
06:39Of course, sees things differently.
06:41According to the New York Times,
06:43in a motion it filed in July,
06:44the company said the payments were contingent on Mr. Wrench's hitting various production milestones,
06:49which it contends he never did.
06:51More than anything, this wild story makes us wonder,
06:54what is going on with Netflix?
06:56While Wrench apparently fleecing Netflix for possibly tens of millions of dollars
07:01for a TV show that he never even made is kind of funny,
07:05it also brings up questions around what Netflix and other streamers are and aren't willing to spend money on.
07:12While these production companies seem to have endless funds to pour into messes like Conquest,
07:16or complete and utter flops like Prime's $250 million Citadel,
07:20they're also always ready to use their tight budget as an excuse for axing fan favorites like Glow and Sensate.
07:28Lack of viewership is sometimes touted as the real reason,
07:31but when they're willing to spend millions upon millions of dollars for productions that never see the light of day,
07:37or are watched by literally no one if they do,
07:40that justification starts to wear thin.
07:42The recent Writers Guild of America and SAG Afterstrikes in Hollywood also helped highlight how unfairly these companies have stacked the deck,
07:50somehow raking in millions for themselves,
07:52but through accounting magic have nothing left to pay the people that actually made the film or show.
07:58It's going to be problematic for the writing community and certainly is going to hurt anyone who's attached to the film and television industries in Hollywood,
08:05but I don't think it's a reason not to own Netflix stock.
08:08If anything, it could be a benefit to Netflix.
08:10Wrench's ability to continually fail upwards is less funny and more depressing when seen next to so many other great projects,
08:17helmed by capable creatives that can't seem to get off the ground no matter how hard they try.
08:22The problem of people with money being willing to hand over large sums to scruffy white people who are good at talking and allegedly geniuses,
08:30but have nothing to back that claim up other than other rich people they've convinced,
08:34certainly isn't a problem specific to Hollywood.
08:37But the Conquest debacle does highlight the particular way Hollywood is willing to send money down the drain for a good idea
08:44that sounds clearly bad to anyone who isn't a big-time producer,
08:47while continuing to overlook great stories that could become cultural touchstones or big hits with just a bit of help.
08:54Wrench and the streamer are still currently in arbitration at the time of this video,
08:58so it remains to be seen if he will indeed get to ring a few more million out of the company before the dust finally settles.
09:04And who knows?
09:05Given their penchant for turning headlines into storylines,
09:08maybe in the end Netflix will look to recoup their losses by making a true crime miniseries about this whole saga.
09:14One would hope that this would be a good lesson for Netflix,
09:17but only time will tell if they actually learn anything and change their ways.
09:22Maybe one day soon, someone who cares about creativity and story more than hypothetical future profits
09:29will take the reins and use all of this money to help usher us into another golden age of television.
09:35Or maybe not.
09:37That's the take.
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