Netflix’s PR crisis with Kevin Spacey offers several lessons for other companies. After allegations Spacey made sexual advances toward a 14-year-old boy in 1986, Netflix almost immediately dropped Spacey from the popular House of Cards program. Netflix and its production studio Media Rights Capital suspended the show’s sixth season while writers worked feverishly to rewrite the final program’s season without Spacey’s character.
The show is a major employer. Over 2,000 cast, crew and extras are waiting for a decision that could impact their livelihoods, as CNN reports. “House of Cards,” which for five seasons has been filmed in and around Baltimore, is one of the state’s biggest productions.
Protect Your Brand’s Image
“Even if you’re not running a billion-dollar entertainment behemoth, you can emulate Netflix’s response to its current PR crisis to protect the brand you’ve worked so hard to build,” says Erik Huberman, founder and CEO of Hawke Media. Huberman cites three lessons in an article for Entrepreneur.
Know your morals and values — and stick to them. If someone in your organization does something contrary to your values, it’s time to terminate the relationship.
Don’t outright admit wrongdoing. “No matter who you’re trying to save face with — customers, the media or competitors — if people smell blood in the water, they’ll be all over it,” Huberman says. “If possible, avoid the words, ‘We’re sorry’ unless such an admission is absolutely necessary.
Acknowledge the error, move on and commit to doing better. Once you sufficiently address the situation, focus on ways to avoid such problems in the future. United Airlines didn’t dwell on its PR crisis or on how it treats customers. It focused on getting customers to destinations on time.
Ending production was the best decision, Huberman says. It ended the cycle of bad press, terminated the connection to Spacey’s PR difficulties and allowed Netflix to cut its losses and regroup.
The Importance of Contracts
Review contracts. Producing a Spacey-less season might be legally impossible. The actor’s contract lacks a morality clause, meaning he cannot be suspended or terminated from the series because of the allegations, according to new media reports. He can be suspended or fired from the show only if he becomes “unavailable” or “incapacitated.”
MRC suspended Spacey based on a company-wide sexual harassment policy. However, sources told Blast that he is a contractor, not an employee, so the provision does not apply. An unnamed source said Spacey will “be owed a fortune” because firing him would be termination without cause. The contract does not block the streaming service from terminating House of Cards without producing a final season.
The clear lesson: Include morality clauses in contracts with employees and independent contractors, especially high-profile employees and celebrity spokespersons.
Bottom Line: Netflix’s PR crisis caused by accusations against Kevin Spacey offers lessons on crisis management. PR experts praised aspects of the company’s response. Netflix acted quickly and decisively when allegations emerged. However, the contract with the star actor lacked elements that could have better protected the company.