$11m mismanaged: What Nollywood can learn from Hollywood's Netflix scandal

The recent arrest of Hollywood director Carl Erik Rinsch on fraud and money laundering charges has sent shockwaves through the entertainment industry. This is what Nollywood can learn from it.

Rinsch, best known for directing 47 Ronin, allegedly squandered $11 million from Netflix; funds intended for a sci-fi series, on luxury cars, cryptocurrency, and personal expenses.

While this scandal unfolds in Hollywood, it presents valuable lessons for Nollywood, which is experiencing its own streaming-driven expansion.

With Netflix and Prime Video no longer commissioning original projects in Nigeria but still acquiring films after their cinema runs, Nigerian filmmakers must take a critical look at the pitfalls Hollywood has faced.

1. Transparency and accountability in filmmaking budgets

One of the key issues in Rinsch's case was the misuse of production funds. Netflix entrusted him with a budget of $44 million, followed by an additional $11 million, yet no finished product ever materialised.

This raises the question of accountability; how was such a large sum allocated without proper oversight?

Nollywood, while not yet handling budgets on the scale of Hollywood, is seeing an influx of multimillion-dollar deals. Streaming platforms are investing heavily in African content, and Nigerian filmmakers must ensure transparency in financial management.

Establishing clear budget breakdowns, conducting regular audits, and maintaining open communication with financiers can prevent a similar scandal.

2. The importance of delivering on contracts

The White Horse saga highlights a fundamental issue; failing to deliver on contractual agreements. Despite receiving funds, Rinsch never completed an episode of the series.

This is a cautionary tale for Nollywood, where production delays and abandoned projects are not uncommon.

With investors investing in Nigerian content, filmmakers must prioritise professionalism. Delivering projects on schedule, adhering to quality standards, and maintaining trust with international partners will ensure that Nollywood continues to grow as a global industry. A reputation for inconsistency could deter future investments.

3. Avoiding financial mismanagement and lavish spending

Rinsch's case is an extreme example of financial recklessness; spending millions on Rolls-Royces, antiques, and cryptocurrency instead of production.

While Nollywood is not immune to stories of filmmakers mismanaging funds, this scandal underscores the importance of responsible financial decisions.

Producers and directors should ensure that funds are allocated where they are needed most; script development, cast and crew salaries, post-production, and marketing.

Proper financial planning can prevent production stalls and guarantee that investors see a return on their investment.

4. The need for industry regulations

Hollywood, despite its established legal framework, still sees cases of fraud and contract breaches. Nollywood must take this as a sign to strengthen industry regulations.

Establishing industry-wide financial accountability measures, enforcing contract fulfilment, and setting up dispute resolution mechanisms will ensure a more professional industry.

The Nigerian film industry can take proactive steps by forming independent bodies that oversee major deals, ensuring fair use of funds, and holding filmmakers accountable.