Crazy or swindler: the director took $55 million from Netflix for the series and spent it on his own needs - ForumDaily
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Crazy or swindler: the director took $55 million from Netflix for the series and spent it on his own needs

In the fall of 2018, at the height of the streaming boom, a half-dozen studios and video platforms lined up to woo a little-known director named Carl Eric Rinsch. He only directed one film, 47 Ronin. It was a commercial and public failure. No one expected this man to spend millions of Netflix dollars on a luxurious life without fulfilling the terms of the contract, reports NewYorkTimes.

Photo: IStock

But memories are short in Hollywood, and the demand for new content was enormous. In just a decade, the number of scripted TV shows has grown from 200 to more than 500, with new streaming services on the way from Disney, Apple and NBCUniversal. Amid the excitement, the project that Rinsch proposed—a science fiction series about artificial people—became a sought-after product.

Rinsch and his representatives reached an informal eight-figure agreement with Amazon. But before they had a chance to put it in writing, Netflix intervened. Cindy Holland, then the company's vice president of original content, called Mr. Rinsch at home on Sunday and offered him millions of dollars more, plus something else: final editing rights, which studios rarely gave to directors.

Netflix won the deal and soon regretted it.

A fiasco of catastrophic proportions

The Rinsch project turned out to be a costly failure. Netflix spent more than $55 million on Rinsch's show and gave him almost complete budgetary and creative freedom, but never received a single completed episode.

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Shortly after they signed the contract, Rinsch's behavior became erratic, according to members of the show's cast and crew and court documents in a divorce case brought by his wife.

Rinsch claimed to have discovered the secret transmission mechanism of Covid-19 and could predict lightning strikes. He bet most of Netflix's money on the stock market and cryptocurrencies. He spent millions of dollars on a fleet of Rolls-Royces, furniture and designer clothes.

Rinsch and Netflix are now embroiled in a confidential arbitration case brought by Rinsch, who claims the company violated their contract and owes him at least $14 million in damages. Netflix denies owing Rinshu anything and has called his demands extortion.

Hollywood projects often run into problems, but disasters of this magnitude are rare. And it comes at an inopportune time, as Hollywood comes under pressure from investors to cut lavish spending and focus on turning a profit rather than attracting streaming subscribers at any cost. This pressure is expected to intensify. Recent agreements by Hollywood studios to increase salaries for writers and actors are likely to further reduce profits.

Rinsch refused to answer journalists' questions. In a recent Instagram post, he said he did not cooperate with The Times because he expected the article to be “inaccurate.” He predicted it would "discuss the fact that I somehow went crazy... (spoiler alert)... I didn't."

Thomas Cherian, a Netflix spokesman, said the company provided significant funding and other support for Rinsch's series, but "after much time and effort, it became clear that Rinsch was never going to complete the project that he promised, and so we have scrapped the project."

"Organic Mind"

Apparently, 46-year-old Rinsch is a talented director. The youngest son of an insurance company executive, he grew up in California's San Fernando Valley and began renting camera equipment and making short films in his early teens. After attending Brown University, he returned to Los Angeles and joined Ridley Scott's production company, appearing in commercials and studying with the renowned director.

Friends say Rinsch has always had an unusual side. He had a habit of telling tall tales about his childhood, claiming that he grew up in Africa and that his father was a spy. After living for a time at the Huntley Hotel in Santa Monica, he insisted that the staff cover every inch of his room with white sheets.

Rinsch's career began in 2010, when a short film he produced for Dutch electronics manufacturer Philips won top awards at the Cannes Lions international advertising festival.

There were rumors that Rinsch would direct a prequel to Alien, Scott's 1979 sci-fi classic, for his feature film debut. Instead, Universal Studios hired him to direct 47 Ronin, a big-budget action film starring Keanu Reeves.

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The project encountered difficulties. Rinsch got into an argument with Scott Stuber, one of the producers, and at one point was removed from the editing room. When the film was released on Christmas Day in 2013, it flopped. Universal had to write off most of its $175 million budget.

Rinsch returned to filming commercials. At the same time, he and his wife—Uruguayan model Gabriela Roses Bentancor—began working on a passion project: a sci-fi series about a genius who invents a humanoid species called the Organic Mind. These creatures are sent to hotspots around the world to provide humanitarian aid, but eventually humans discover their true nature and turn against them. Rinsch called the show “White Horse,” a reference to the first horseman of the apocalypse.

At first, Rinsch financed the production with his own money and hired mostly European actors and crew members, thereby cutting costs and circumventing Hollywood union rules. The first shooting followed a strict schedule. During filming in Kenya, Rinsch insisted that filming continue for 24 hours straight. In Romania, a leading actress suffered from hypothermia during a barefoot scene in the snow and had to be rushed to hospital.

To keep the project going, Rinsch received investment from 30West, a production company backed by billionaire entrepreneur Dan Friedkin. But when Rinsch missed the deadline, 30West threatened to take over the project. Reeves, a Hollywood star who befriended Rinsch while filming Ronin, came to his aid by investing in the show and becoming a producer.

With the money Reeves contributed, Rinsch finished editing six short episodes ranging from four to 10 minutes in length. He used them to pitch a 13-episode, 120-minute first season to major streaming companies.

At the time, streaming services were in a costly race for content to attract new subscribers. Netflix, in particular, has spent lavishly on top creators like Shonda Rhimes and Ryan Murphy. Hollywood was also open to new show formats.

Quibi, the short-form video platform conceived by Jeffrey Katzenberg, a former DreamWorks Animation executive, was just launched to much fanfare.

Rinsch's presentation attracted interest from Amazon, HBO, Hulu, Netflix, Apple and YouTube. Amazon — which has demonstrated its willingness to spend big by paying nearly $250 million for the rights to make a TV show based on J.R.R. Tolkien's "The Lord of the Rings" seems to have won the auction. But Netflix snatched the project at the last minute with confidence that the show had the potential to become a successful sci-fi franchise like Stranger Things, one that could spawn sequels and spin-offs.

The company agreed to pay $61,2 million in multiple installments for the rights to the series, which it renamed "Conquest," under the terms of a November 2018 agreement. The deal included two unusual clauses: Netflix gave Rinsch the final editing credit, a privilege previously granted to only a few directors. And it assured Rinsch that they would remain "attached for life" to all subsequent seasons and additional projects.

By giving Rinsh such generous terms, Netflix ignored several red flags. One of them was the strange past of the project. At the time, Rinsch was still struggling with 30West and other early investors. They received $14 million of the $61 million from Netflix as part of a legal settlement. Another factor was that the series did not have a complete script.

Netflix also shrugged off Rinsch's controversial reputation in Hollywood. Stuber, the producer who had fallen out with him on Ronin, had joined Netflix's film division a year earlier. Holland, the company's head of original content, did not consult with him before purchasing "Conquest."

Punching holes in the wall

Given Netflix's large financial obligations, Rinsch now had to complete the task. Filming of the remaining episodes of Conquest took place in Sao Paulo (Brazil), then in Montevideo (Uruguay) and in Budapest.

In Sao Paulo, the local film industry union sent a representative to the set after receiving a complaint that Rinsch was "mistreating the crew" with "yelling," "cursing" and "excessive irritation," according to a letter sent by the union. Netflix's local production partner was informed of the problem and reached out to Rinsch.

In Budapest, Rinsch spent several days without sleep and accused his wife of plotting to kill him, according to two people who witnessed the breakdown.

Roses later stated in a court filing in the divorce case that Rinsch's behavior began to change even before filming abroad. He threw things at her several times and punched holes in the wall twice.

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Rinsch said he had been diagnosed with autism and attention deficit hyperactivity disorder and was taking medication. Roses and some members of the group were concerned that he was using Vyvanse, an amphetamine commonly prescribed to treat ADHD. According to psychiatrists, if used in excess, the drug can have serious side effects, including mania, delirium and even psychosis.

After filming wrapped in Budapest in late 2019, Roses hired a behavioral health consultant to try to convince Rinsch to enter rehab. Accompanied by Reeves, one of Rinsch's brothers, and several members of the Conquest team, the consultant checked into Rinsch's home in Los Angeles. Rinsch agreed to let him stay with him, but after a couple of days he sent him packing.

In March 2020, as the coronavirus pandemic reached US shores, Rinsch asked Netflix to send him more money. The company has already spent $44,3 million on Conquest. Rinsch skipped several stages of production and switched between two versions of the script: a shorter one that followed the original plan of 13 episodes, and a second version twice as long that would have required permission for a second season.

Netflix initially resisted Rinsch's demands for more funds, but relented when he said the entire production risked collapsing without an immediate injection of money.

Netflix contributed $11 million to Rinsch's production company, bringing its total costs to more than $55 million. This gave Rinsch the opportunity to use some of the new money to prepare for production of a longer version of the script. The caveat was that if Netflix did not sign off on the extended script in five weeks, Rinsch would have to use the remaining money to complete and direct the originally agreed upon first season.

Rinsch transferred $10,5 million of the $11 million to his personal brokerage account at Charles Schwab and used options to make risky bets on the stock market, according to copies of his bank and brokerage records included in the divorce case. One of his bets was that shares of biotech company Gilead Sciences, which announced it is testing an antiviral drug on Covid patients, will soar. Another possibility was that the S&P 500, already down more than 30 percent, would fall further. Rinsch lost $5,9 million in a matter of weeks.

In the following months he behaved more erratically. Like many people, he was deeply affected by the pandemic and held strange theories about the coronavirus, according to text messages and emails. When Roses came to visit him in June 2020, he took her to an observation deck in the Hollywood Hills and pointed out the planes overhead. They were “organic, intelligent forces” that “came to say hello,” he told her, according to Roses’ statements in the divorce case. He also sent her messages claiming to be able to predict lightning strikes and volcanic eruptions.

At Netflix, Holland also witnessed some strange behavior from Rinsch. He sent her text messages that contained bizarre drawings with unclear annotations.

However, Holland did not realize the extent of the problem until Roses approached her in July 2020. She informed Holland and another Netflix executive, Peter Friedlander, about Rinsch's condition. Two days later she filed for divorce.

In September 2020, Holland and another executive involved in Rinsch's contract left the company.

A few months later, Friedlander and Netflix head of business relations Rochelle Gerson called Roses. They wanted to know if she could access the show's footage so they could figure out what else needed to be done to complete the first season.

When Roses told them she didn't feel comfortable doing this without Rinsch's approval, Gerson became concerned that Rinsch might react inappropriately if Roses discussed the matter with him.

Gerson soon began receiving emails from Rinsch, in which he claimed, among other things, that he had found a way to map “the coronavirus signal coming from inside the Earth.”

Netflix executives were so concerned about Rinsch's behavior that they consulted with the Los Angeles Police Department's threat management unit. A police department psychologist reviewed Rinsch's messages and emails and concluded that he posed no threat to himself or others.

Five Rolls-Royces and Ferraris

Netflix no longer saw the point in production. On March 18, 2021, Gerson informed Rinsch via email that Netflix had decided to stop funding Conquest. She told him he could sell it elsewhere, but any buyer would have to reimburse Netflix for the money it spent.

Rinsch sent angry emails to Gerson and Netflix's lawyer, accusing them of violating his contract. In one email, he addressed the topic of his mental health. “Simply put, I am of sound mind and body,” he wrote.

Rinsch began using the remainder of the $11 million that Netflix sent his production company to place bets on cryptocurrency. According to account statements, he transferred more than $4 million from his Schwab account to an account on the Kraken exchange and bought Dogecoin, a dog-themed cryptocurrency. Unlike his stock market investments, it paid off: When he liquidated his Dogecoin positions in May 2021, he had a balance of nearly $27 million.

“Thank you and God bless cryptocurrency,” wrote an elated Rinsch in an online chat with a Kraken representative.

Rinsch then started spending money. He bought five Rolls-Royces, a Ferrari, a Vacheron Constantin watch worth $387, as well as millions of dollars worth of luxury furniture and designer clothing. According to a forensic accounting expert hired by Roses, the amount was $630 million.

By that time, Rinsch's divorce from Roses had become bitter. Her legal team suspected that the purchases were aimed at hiding Rinsch's crypto winnings.
Rinsch responded in a deposition that the cars and furniture were props for "Conquest" and that he paid for them with Netflix production money. But in his arbitration case with Netflix, he took a different position: in confidential documents, he argued that the money in the contract belonged to him and that Netflix owed him several more payments totaling more than $14 million.

Netflix disagrees. In a motion filed in July, the company said payments would be contingent on Rinsch meeting various performance milestones, which the company says he never did. A decision on the case is expected soon.

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