0:05

Hollywood is making a lot of expensive

0:08

television these days, and every

0:10

show has something.

0:13

House of the Dragon has dragons. And

0:15

all the dragons ruled as one. The

0:19

Mandalorian has space battles. Alert,

0:23

alert. And Succession has

0:26

billionaires on yachts. Not everyone

0:28

can live this life. But

0:32

there's one show that stands out. Yellowstone.

0:37

It's a western set on a Montana

0:39

ranch. Our colleague Eric Schwartzel

0:42

says one episode can cost

0:45

close to $20 million.

0:46

Yellowstone is a TV

0:49

show that 20 years ago we would

0:51

have thought had the production quality

0:53

and scale of a big screen theatrical

0:55

movie. It

0:58

stars Kevin Costner as the kind of

1:00

patriarch of this ranching

1:03

dynasty, and it's trying

1:06

to be as true to

1:08

the setting as possible. This might be the only

1:10

man who can outride him. This

1:13

might be. They

1:15

film on location.

1:16

They have a lot of horses. They have a

1:18

lot of cattle. It's

1:22

taken off with this really

1:23

potent combination of just

1:26

kind of messy family drama and

1:28

frontier justice. So it

1:31

seems like it's kind of taking us back to the

1:33

John Wayne days in some ways, but it's also

1:36

like Grey's Anatomy on a ranch.

1:38

Yellowstone was created by the writer

1:40

and director Taylor Sheridan. And

1:42

not long after the show debuted on Paramount,

1:45

it became one of the most popular shows on

1:47

cable. Paramount ordered

1:49

more and more shows from Sheridan, making

1:52

him one of the most powerful showrunners in

1:54

Hollywood,

1:55

power that Sheridan has used to

1:58

create an empire. But

2:00

last week, Paramount announced

2:02

a $1 billion loss last

2:04

quarter, in part because

2:07

of increased spending on streaming

2:09

content,

2:10

which begs the question, why

2:13

is Yellowstone so expensive? I

2:16

think this is a story about the

2:18

very weird, very idiosyncratic

2:22

way that Hollywood does business. And

2:24

what can happen when a hitmaker

2:27

in Hollywood finds that perfect

2:30

storm of having a hit show

2:32

and having a studio that can't afford to alienate

2:35

him.

2:41

Welcome to The Journal, our show

2:43

about money, business, and power. I'm

2:46

Kate Leimbaugh. It's Friday, May

2:48

12th.

2:57

Coming up on the show, why

2:59

the man behind Yellowstone can't

3:02

be corralled.

3:06

Three,

3:08

two, one.

3:21

What will the world look like 10 or 20 years

3:23

from now? The Wall Street Journal's Future of Everything

3:26

podcast is here to give you a peek. And

3:28

we can't wait to show you what's coming. Subscribe

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now.

3:39

Paramount spends a lot of money on Yellowstone

3:41

and its universe of spinoffs. The

3:44

first season of its prequel series, 1923, which

3:46

is set in 1923, cost

3:50

the studio $200 million

3:53

to produce.

3:54

Eric says that comes out to roughly $500,000

3:56

per minute. I

4:00

mean, it makes 1923 among

4:04

the most expensive shows on TV

4:06

or ever made. I mean, we're talking

4:09

more expensive than the Game of Thrones

4:11

spin-off, more expensive than HBO's

4:14

video game adaptation, The Last of Us. There's

4:17

really a kind of a voracious appetite

4:20

behind the scenes too for every

4:22

possible location, every possible

4:25

prop, every possible collection

4:27

of cattle. You know,

4:29

I mean, everything that can be put

4:31

on screen should be put on screen.

4:34

It's like every single thing on Yellowstone

4:36

set is drenched in excess.

4:40

You might allocate $35,000 for props, but then the bill

4:42

comes in and they cost $70,000.

4:47

At one point on this latest season

4:49

of Yellowstone, there were invoices

4:53

put into the show's production offices

4:55

for 24 horse saddles. And

4:58

they came to about $23,000.

5:02

Catering bills would come

5:05

in, you know, double what you

5:07

would expect.

5:08

And the show was filming in Montana and

5:11

they needed a farrier, which

5:13

is a word I learned reporting the

5:16

story of a farrier, someone who comes and applies

5:18

horseshoes to horses. And they needed

5:20

a farrier to work the horses.

5:23

And so they flew two

5:26

farriers from Texas to Montana

5:28

to work with the horses.

5:31

And at this point, David Glasser,

5:33

who's managing the production, is asking

5:36

his colleagues, are you serious? Like, we

5:38

can't find a farrier in Montana?

5:42

One of the bigger expenses on the show are

5:44

the sets. Yellowstone is filmed

5:46

on ranches, which can be costly to rent.

5:49

But there's something unusual about the ranches

5:51

Yellowstone uses.

5:53

Some of them are leased from its creator,

5:56

Taylor Sheridan.

5:59

cases, $50,000 a week, which

6:02

our understanding is higher than the

6:05

going rate. And so this

6:08

goes beyond someone having

6:10

absolute creative control on

6:12

a production. He's also developed

6:16

a web of other revenue streams

6:19

for himself that feed off

6:21

of the productions. And that is particularly

6:23

unusual.

6:28

One example that I thought was really telling that

6:30

we learned of is that Taylor

6:34

rents a number of his horses to

6:36

the production. And they use horses

6:39

that Taylor Sheridan owns for

6:41

filming. And he gets paid for that on top of the

6:44

money he already is making to create the show.

6:47

Sheridan declined to comment. Paramount

6:50

says that Sheridan works with an established

6:52

team of experts while making the show and

6:54

that the company ensures the production is

6:57

making cost-effective decisions.

6:59

So let's talk about Taylor Sheridan.

7:02

Who is he? Taylor Sheridan

7:05

is a man who was born in North

7:07

Carolina and soon after

7:09

moved with his family to rural Texas

7:12

and lived on a ranch. He has

7:14

said in interviews that he was a bit of

7:16

a ne'er-do-well growing up, flunked out of

7:18

college, didn't really have a real

7:21

sense of direction until he

7:23

moved to Los Angeles and started

7:25

trying to make it as an actor. And

7:27

he had this kind of Marlboro Man look.

7:30

He had a bit of a Texan rancher

7:33

vibe to him.

7:33

And he started getting cast in

7:36

roles that needed someone who looked like

7:38

that. Sheridan was on shows

7:41

like Walker, Texas Ranger, and Sons

7:43

of Anarchy. But he never became

7:45

a big star as an actor. So he started

7:47

writing screenplays and quickly

7:49

discovered he was more successful as a writer.

7:53

His calling card was a Western bank robbery

7:55

movie called Heller High Water. I

8:00

believe, taught him that there was a real market

8:02

for a return to that kind

8:04

of Western storytelling.

8:06

I also think at that time, he

8:09

started to really embrace his

8:12

persona as a cowboy

8:15

writer. And today, it's

8:17

hard to separate Taylor Sheridan, the

8:19

TV writer, from Taylor Sheridan, the

8:22

ranch owner, or Taylor Sheridan, the cowboy.

8:25

And how did he connect with Paramount?

8:28

So, several years ago,

8:31

Paramount was looking to get into the prestige

8:33

TV game. They had watched as

8:35

AMC and FX had

8:37

really kind of owned the world

8:40

of top-rated dramas like

8:42

Mad Men, right? And they wanted to get into that

8:45

space.

8:46

Sheridan's pitch to them was a story

8:48

of ranchers trying to protect their land.

8:51

And it was a personal story for him.

8:54

You know, there's this story that he tells time and

8:56

time again of his

8:58

parents getting a divorce while he was in college

9:01

and

9:02

in the divorce giving up the

9:04

family homestead, giving up the family ranch. And

9:07

when he found out that the ranch that he had grown

9:09

up going to and learning how to be a cowboy

9:11

on was not going to be in the family anymore,

9:14

his mother has said that he didn't

9:16

talk to her for more than a year.

9:18

When Yellowstone premiered in 2018, it

9:21

focused on a part of America that doesn't typically

9:24

get the prestige TV treatment.

9:26

And it became a national hit. Here's

9:29

Sheridan talking about the show. My

9:31

goal with Yellowstone, primarily

9:33

and then a lot of these other things I do too, was

9:36

really just to introduce the world to this way

9:38

of life. There's so many people that now

9:40

live in big cities and they have no idea where

9:42

the food comes from, they don't know

9:43

what it takes to live.

9:45

Yellowstone was so popular

9:48

that its latest season premiere drew in 12

9:50

million viewers. And Paramount

9:52

decided to expand the Yellowstone universe.

9:56

But to do that meant relying even

9:58

more on Sheridan.

9:59

He's a unique writer in television because he works

10:02

alone, not in a writer's room, and

10:04

creates entire seasons on his own.

10:06

Sheridan and Paramount put out two

10:09

Yellowstone prequels as well as greenlit

10:11

two other shows. Paramount

10:13

told Eric that these shows are among the network's

10:16

quote, most successful and profitable.

10:19

Taylor Sheridan's shows were

10:21

leading people to sign up for Paramount's

10:24

streaming service, which I guess

10:26

subscribers are like cattle, right? More is

10:28

better. And

10:31

so Taylor was helping Paramount

10:33

amass subscribers in a very crowded

10:36

marketplace.

10:37

So it seems like this is a great

10:39

partnership. You've got a creative with a

10:41

hit national franchise, working

10:43

with a studio and spinning off all

10:46

these other remakes. What's the rub?

10:48

Well, the rub is that behind the scenes

10:51

of all of this success were

10:54

frustrations, tensions, and

10:57

mounting problems within Paramount

10:59

over how much the shows were costing and how

11:02

the productions were being run.

11:05

And not only that, that the costs

11:08

were accruing on set in ways that

11:10

many working there thought were completely unnecessary

11:13

and really beyond the

11:16

usual boundaries that are set on these

11:19

kinds of productions.

11:24

And how did these costs connect to Sheridan?

11:27

Hollywood doesn't have a reputation for

11:29

frugality, but I think even people

11:31

who have worked on many different kinds

11:33

of shows or movies who work

11:36

on Taylor Sheridan shows describe them as

11:38

unusual and as

11:40

another level of

11:42

spending. And then there also was

11:45

a sense that what Taylor says

11:47

goes. It goes beyond writing

11:50

and producing.

11:51

Taylor is also renting

11:53

the shows his horses, his cattle, in

11:56

some cases using his personal employees

11:59

to...

11:59

to service the shows,

12:02

and in other cases, hosting

12:05

the productions at his properties.

12:07

The address of one of Sheridan's ranches

12:10

is 1102 Dash for Cash Road. And

12:14

earlier this year, he talked at a cattle convention

12:17

called CattleCon about how profitable

12:20

this arrangement is.

12:21

He said to the group of cattle

12:24

owners, he said, you know, there's nothing

12:26

better than having

12:28

a movie studio show up, film

12:31

on your location, and pay you a bunch of money for

12:33

it. And he said it's about the greatest

12:35

deal going.

12:37

These deals are great for Sheridan, but

12:40

what about for Paramount?

12:44

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Talk to your family about seeing a doctor. Go

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to alz.org slash Time2Talk,

13:05

a message from the Alzheimer's Association and

13:07

the Ad Council.

13:10

Last week, Paramount's stock dropped

13:13

nearly 30%

13:14

after it reported it lost $1 billion

13:18

in the first quarter of the year. We're

13:21

also navigating a challenging and uncertain

13:23

macroeconomic environment, and you see the impact

13:26

of that in our financials. That's

13:29

Paramount CEO Bob Backish on an earnings call earlier

13:32

this month. Over the past several years,

13:34

we've seen streaming companies Over

13:37

the past several years, we've seen streaming

13:39

companies just pour billions

13:42

and billions of dollars into

13:46

programming because there was

13:48

a mentality that you

13:50

had to acquire subscribers

13:52

at any cost. That model really

13:55

came home to roost, and

13:57

a lot of those expenses started

14:00

to really add up. And Paramount

14:02

really seems to have hit that moment last

14:04

week with these earnings. And

14:07

they had said on the call that part

14:09

of the reason for the losses were costs

14:11

in their streaming

14:13

division.

14:18

And is that because of Yellowstone?

14:21

Well, Paramount would argue that their losses would

14:24

be higher if they didn't have Yellowstone

14:26

because their tailor-shared and shows are profitable

14:29

for them. But it was really

14:31

telling that one of the reasons

14:34

that Paramount CEO Bob Backish said

14:36

that the losses were so steep was because their

14:38

costs were so high.

14:40

I was listening to the earnings

14:42

call and thinking about the

14:44

emails and invoices I had seen and the

14:47

emails I had seen of production

14:50

executives pulling their hair out and saying,

14:52

wait, we really have to spend this

14:54

amount of money on horse saddles? We really need

14:57

this amount of money on prop jewelry.

15:00

And what has Paramount said about

15:02

this? Paramount, whenever

15:04

we spoke to them for this story, really came

15:07

to Taylor Sheridan's defense. And

15:10

Paramount has been facing some real

15:13

headwinds in its streaming business, but

15:15

they would argue that

15:17

those headwinds would be even greater if they didn't

15:19

have Taylor Sheridan and his shows

15:22

in their arsenal.

15:24

101 Studios, the production company

15:26

that makes Yellowstone, said that it works

15:28

with Sheridan to balance saving money and

15:31

making the show as high quality as he

15:33

expects.

15:34

The company said the franchise is so successful

15:37

that it's worth the costs. So

15:40

Yellowstone is paramount to Paramount.

15:43

Well said, yes. Paramount

15:45

is really struggling in

15:48

a market where much bigger

15:50

and deeper pocketed competitors

15:53

are trying to win subscribers

15:56

and eyeballs.

15:58

So think of it.

15:59

This way, Paramount is a small fish in a big pond,

16:02

and Taylor Sheridan

16:05

is a big fish in that small pond. It's

16:07

really this perfect storm that has

16:09

allowed Taylor Sheridan to compound his

16:12

power and leverage over Paramount because they

16:14

can't afford to lose him because he's

16:16

really all

16:17

they've

16:18

got to compete with much

16:21

bigger competitors.

16:22

Has anyone raised concerns about Taylor

16:25

Sheridan's unusual relationships with

16:28

his productions where he's renting his own

16:30

ranch to the show?

16:32

Paramount and the production

16:35

company behind Taylor Sheridan's

16:37

shows were very quick to say we love

16:39

being in business with this guy. But

16:41

we learned through private

16:44

correspondence and interviews

16:46

with executives that, yes, there

16:49

are concerns that

16:51

this has gotten out of control and

16:54

that Taylor Sheridan's leverage has given

16:57

him really

16:58

outsized influence over how

17:01

the productions are run. Right, he's

17:03

like the bottom Jenga block. I

17:06

think when it comes to Paramount's streaming strategy,

17:09

he's the bottom block, but

17:11

he

17:12

also made the block

17:14

and runs

17:16

the cafe where you play it.

17:19

Last week, Paramount announced that Yellowstone

17:22

would end after this latest season. But

17:25

Sheridan's contract with Paramount runs

17:27

through 2028. The

17:30

world of Taylor Sheridan

17:33

stories really is functioning

17:35

almost without Yellowstone at this point. Yellowstone

17:38

is still a big hit, but he's got other shows

17:40

that he's working on of a similar

17:42

vibe, right? He's really hit on

17:44

something and he's

17:47

got a lot of other things cooking.

17:50

And so I don't think Taylor Sheridan

17:52

and his particular

17:54

brand

17:56

of frontier narrative is going away

17:58

anytime soon.

18:02

What does this story say about Hollywood

18:04

right now? I think the narrative

18:06

had been, you know, Taylor Sheridan,

18:09

the industry's most prolific

18:12

TV writer and creator, is

18:15

just racking up one success

18:17

after another. And what I think our

18:19

reporting showed is that there is

18:21

a shadow to that success. You

18:24

know, we're accustomed to hearing stories out of

18:26

Hollywood of producers

18:28

or writers or directors having a lot

18:31

of perks, right? Or getting what

18:33

they want because of their track record. This

18:35

took it to a whole other level. And

18:38

in the case of Taylor Sheridan, that

18:40

success has been parlayed into remarkable

18:43

power and remarkable leverage,

18:46

and really a dynamic

18:49

we haven't seen in a long,

18:52

long time.

19:07

That's all for today, Friday, May 12th.

19:10

The Journal is a co-production of Gimlet

19:12

and The Wall Street Journal. The show is made

19:15

by Jade Abdul Malik, Annie Baxter,

19:17

Ariana Bowe, Catherine Brewer,

19:20

Maria Byrne, Pia Gadkari,

19:22

Rachel Humphries, Brendan Klinkenberg,

19:24

Ryan Knudsen, Matt Kwong, Jessica

19:27

Mendoza, Annie Minoff, Laura

19:29

Morris, Bafit Nisuli, Nurek

19:32

Peres de la Rosa, Sarah Platt,

19:34

Alan Rodriguez Espinosa, Jonathan

19:37

Sanders, Kier Singy, Jeevika

19:39

Verma, Lisa Wang, Catherine

19:41

Whelan, and me, Kate Limebaugh. Our

19:44

engineers are Griffin Tanner, Nathan

19:46

Singapac, and Peter Leonard. Our

19:49

theme music is by So Wylie. The

19:51

theme in today's episode was remixed by Nathan

19:53

Singapac and Griffin Tanner. Additional

19:56

music this week from Catherine Anderson,

19:58

Peter Leonard, Bobby Loran, and

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Nathan Singapack, Audio

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Network, Extreme Music, and Blue

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20:05

Fact-checking by Nicole Pasulka. Thanks

20:14

for listening. See you Monday.