Netflix Inc. (Nasdaq: NFLX) has taken a lot of heat from critics about its aggressive content spending, but the company certainly seems to be landing some big-name talent. The New York Times reports that Netflix is in negotiations with none other than former President Barack Obama, and GBH Insights says an Obama-Netflix deal would be another “home run” for Netflix investors.
Netflix is reportedly in late-stage negotiations to pay Obama and wife, Michelle, for exclusive content to air on Netflix. Although details about the format and content of the show are scarce, sources familiar with the discussions say the Obamas are potentially interested in highlighting inspirational stories.
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Obama would be by far the largest name that Netflix has landed in its recent content spending spree. Netflix is expected to spend roughly $8 billion on content in 2018, $10.2 billion in 2019 and $12.2 billion in 2020.
GBH Insights head of technology research Daniel Ives says content is key to Netflix’s long-term success, and investors shouldn’t get hung up on the budget.
“As one of the most high profile individuals globally, a steaming platform with 120 million consumers worldwide and growing would be a unparalleled distribution platform for Obama,” Ives says.
The potential deal with Obama comes less than a month after Netflix lured Emmy, Golden Globe and Peabody Award-winning TV producer Ryan Murphy away from Twenty-First Century Fox ( FOXA) is what was reportedly the largest TV deal in history. Bernstein analyst Todd Juenger says acquiring top-tier talent is typically a good bet.
“While the price tag is high, the value of a ‘hit’ show for Netflix is also high, and it’s nice to have your $12 billion [content budget] in capable hands,” Juenger says.
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Ives says an Obama deal would help Netflix maintain its recent momentum in establishing itself as a major media player.
“Coming off its first Oscar win this week, we believe the credibility of the Netflix platform within Hollywood circles is quickly changing as we continue to hear that A-plus talent is now considering a number of major film projects, long-term content deals and other original programming initiatives that will gain further steam if Obama signs onto the platform,” Ives says.
GBH has a “highly attractive” rating and $375 price target for Netflix. Bernstein has an “outperform” rating and $340 target for NFLX stock.
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What Barack Obama Would Mean for Netflix, Inc. (NFLX) Stock originally appeared on usnews.com
