Why J.J. Abrams reportedly turned down $500 million from Apple

Waving bye to Cupertino.
Waving bye to Cupertino.
Image: Jordan Strauss/Invision/AP
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Last week, J.J. Abrams and his production company, Bad Robot, announced a wide-ranging deal with WarnerMedia valued around $250 million, according to the Hollywood Reporter. That’s quite the payday for the Star Wars: The Rise of Skywalker director, and yet it’s just half of what he reportedly turned down from Apple.

Hollywood’s biggest bidding war in the past year has been over Abrams’ services; Bad Robot is behind hits from the Mission: Impossible and Star Trek franchises in film to Westworld and Castle Rock on TV. When word got around that the prolific filmmaker wouldn’t re-up his expiring deal with Paramount Pictures, every talent-hungry content distributor in town lined up to pitch themselves as Abrams’ future home. Among his suitors were Disney, Netflix, Sony, and Comcast.

But the two favorites to land Abrams were always WarnerMedia, with which he’s long had a relationship, and Apple, which will debut original films and TV series alongside its ambitious streaming service, Apple TV+, in November. Abrams elected to go with WarnerMedia despite its lower offer. The five-year deal puts all of Bad Robot’s divisions (film, TV, video games, and digital content) under the same roof for the first time. Abrams will direct and produce films and TV series for both theatrical distribution and also the company’s own upcoming streaming service, HBO Max.

So, why WarnerMedia? Or rather, why not Apple?

Apple reportedly didn’t want to share him

According to the Hollywood Reporter, Apple wanted Abrams to make new projects only for Apple and no other third-party distributor. (Such exclusivity would have prevented Abrams from directing the Star Wars movies for Disney, for instance.) The ability to sell content to other companies, which WarnerMedia will allow him, was “of the utmost importance to Abrams,” the Hollywood Reported noted.

Apple is in a weird position. Until recently, it has only ever sold devices. It’s completely unproven as an entertainment incubator and distributor, but needs creators to ink deals to supply all the content for Apple TV+. The only guarantee that the company can offer talent seeking overall deals right now is that of money.

Of course, that’s more than enough to get started. But in order to land mega-producers like Abrams, Apple will need to either prove it can compete in the increasingly crowded marketplace, or ease up on demanding exclusivity. Already, Apple’s content deal with Oprah Winfrey—by far the biggest Hollywood name to partner up with the company—is not exclusive.

Abrams wants to make movies released in theaters

WarnerMedia owns the Warner Bros. film studio, which is home to some of the world’s most lucrative franchises (the Harry Potter-verse, DC Comics, etc.). Apple, on the other hand, doesn’t have a theatrical business model—and it’s unclear if they ever will.

While Abrams values TV and streaming, he doesn’t want to risk not being able to make blockbusters that get shown in theaters. That’s why you’re highly unlikely to see film purists like Christopher Nolan make deals with Apple any time soon.

Apple doesn’t own any ideas

Unlike WarnerMedia, Apple doesn’t own any intellectual property that filmmakers can turn into lucrative shows and movies. It’s starting from scratch, while Warner has decades worth of distribution rights (Quartz member exclusive) that it can offer filmmaking partners. As someone involved in the Star Wars, Star Trek, and Mission: Impossible franchises (among others), Abrams wants to have the option to produce and help develop the next big movie franchise. Apple simply can’t offer that yet.

Abrams reportedly likes WarnerMedia’s new management

Perhaps the most surprising part of the Hollywood Reporter’s account of the Abrams bidding war is that the director was “impressed” with new WarnerMedia CEO John Stankey. There were real concerns about the former AT&T chief strategy officer’s ability to woo talent like Abrams, and a number of WarnerMedia executives, including HBO CEO and famous talent magnet Richard Plepler, left the company not long after it was purchased by AT&T. But with the Bad Robot deal, Stankey appears to have passed his first major test.

Dallas-based AT&T was always an odd cultural fit with Hollywood brands like Warner Bros. and HBO, but landing Abrams—and beating out Apple in the process—is a good sign that WarnerMedia will remain competitive under its new ownership. Abrams’ deal reportedly includes financial incentives that could make it much more lucrative than the initial $250 million if he’s able to launch new film franchises that meet certain goals.