Highlights
- Kevin Spacey's sexual assault allegations led to the cancellation of "House of Cards" and caused Netflix and the production company, MRC, to lose millions of dollars in revenue.
- Netflix executives decided to end the show before Spacey was charged with any crimes, due to the #MeToo movement and the constant stream of accusations against him.
- MRC sued Spacey for breach of contract, seeking to recoup their financial losses, and an arbitrator awarded them $31 million in damages, which Spacey was ordered to repay. Netflix also lost $39 million due to the cancellation of the show and other Spacey projects.
Kevin Spacey has been in the spotlight for all the wrong reasons since 2017. As a result of sexual assault allegations over the past several years, Spacey has been all but canceled and watched offers from Hollywood evaporate into thin air. People who Spacey believed to be close friends deserted him, and he was outed as being gay on terms that were not his own. As networks and production companies dropped Spacey left and right, he had no choice but to stand by as millions of dollars slipped through his fingers, one of the biggest projects being House of Cards.
From the time that House of Cards started on Netflix, it was a hit show. House of Cards was one of the best shows on the platform with A-list actors and the subject matter was gripping. The show dominated the Golden Globes for years, and it looked like there was nothing that could slow the trajectory of the show's popularity down. But with a real-life scandal that rivaled anything that writers could have scripted for House of Cards, the show collapsed.
With it, the large sum of money that Netflix and the production company working with the streaming platform, MRC, received per season for their top-rated show. As such, they went after Spacey for breach of contract to try to recoup their losses. But even that did not stop the hemorrhaging of money the platform and production company experienced, leaving them in a financial hole to the tune of millions.
Why Was 'House Of Cards' Canceled?
House of Cards was the most popular show that Netflix produced for several years. As such, there were more seasons green-lighted at the time executives pulled the plug on the show. The reason the show was canceled was because of the allegations brought against the show's lead, Spacey.
In 2017, Spacey was accused by several men in both the US and the UK of sexual assault or misconduct. With what seemed like more men coming out of the woodwork constantly and the #MeToo movement fresh in Hollywood, Netflix executives made the decision to end House of Cards before Spacey was even charged for the crimes with which he was accused.
The response was immediate. The season that was being filmed had to be cut short and there was difficulty ensuring that the storyline made sense. The following season was scrapped given that the lead character had been fired from the show.
Everything happened so quickly that Netflix and MRC were not sure just how much they had lost out on financially until the dust had settled. Once the financial loss became clear, Spacey was sued for breach of contract to try to soften the damage done.
Kevin Spacey Was Ordered To Repay $31 Million For Breach Of Contract
Not only had MRC lost out on money after Season Six of House of Cards had to be shortened, and two episodes had to be reshot, but they would also lose future revenue after Netflix canceled their previously greenlighted Season Seven.
Because of this, MRC went directly after Spacey to pay back known monies lost as well as projected future revenue to the tune of $31 million.
MRC put together its financial documents and presented them to an arbitrator in an attempt to keep the matter out of court for a quicker resolution. The arbitrator reviewed documents and listened to MRC as well as Spacey's arguments via his attorneys. And in the end, in 2020, the arbitrator decided in favor of MRC, awarding them $31 million in damages.
Spacey and his legal team contested the award, stating that Spacey's behavior "did not violate the MRC anti-harassment policy." Instead, all that Spacey admitted to participating in was "innocent horseplay" and "sexual innuendos." As such, the case was taken to court.
Try as they might, Spacey's attorneys were unable to present facts that would overturn the award by the arbitrator. And because of this, the award was upheld in 2022, ordering Spacey to pay MRC $31 million.
Netflix Lost $39 Million When 'House Of Cards' Was Canceled
While Spacey being ordered to pay $31 million was a huge loss for the actor, it paled in comparison to what Netflix lost as a result of having to immediately remove their $100 million produced hit show and all other new Spacey content from the platform.
Because Spacey was on the small screen with new episodes of House of Cards at the time the sexual assault allegations were made, the public at large believed that the only loss Netflix would take would center around removing the political drama from the platform.
While nixing House of Cards during post-production of one season and pre-production for another hurt, it was that in conjunction with the other Spacey projects that were canceled that contributed to the company losing $39 million in one quarter.
Chief Financial Officer David Wells announced that the loss was a result of an "unexpected charge for unreleased content we've decided not to move forward with." While not naming names, it was later confirmed that "the loss came from Kevin Spacey projects."
Outside of House of Cards, Netflix also had a Gore Vidal project in the can that Spacey not only starred in but produced. Given that the project was in post-production, Netflix had already paid cast, crew, travel expenses, and more that they would never be reimbursed on.
Further still, House of Cards was a draw that kept viewers coming back to the platform, even with an increase in fees. Once it was no longer part of the lineup, subscribers left. And as a result of trying to do the right thing, Netflix lost out on a huge chunk of change.
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