Just over a year ago, it looked like an open-and-shut case.

In February 2020, Lionsgate CEO Jon Feltheimer said during a quarterly earnings call that the company was officially moving ahead on a sequel to Knives Out, the surprise box office and critical smash whodunnit starring Daniel Craig and written and directed by Rian Johnson.

But on March 31, in a twist worthy of Agatha Christie, came the reveal that Lionsgate would not be releasing the sequel at all. Instead, two sequels would be made by Netflix, which inked a dagger-driving $469 million deal with Johnson and his producing partner at T-Street, Ram Bergman, both of whom are represented by CAA.

Deal points were noteworthy: The pact gave Johnson immense creative control, sources tell The Hollywood Reporter. He doesn’t have to take notes from the streamer. The only contingencies were that Craig must star in the sequels and that each must have at least the budget of the 2019 movie, which was in the $40 million range. Sources say that Johnson, Bergman and Craig stand to walk away with upwards of $100 million each.

The other company that missed out on the sequels was MRC, the Beverly Hills-based production firm that financed the first film. (MRC is also a co-parent of THR through a joint venture with Penske Media titled PMRC.) Sources say that MRC had a one movie deal with Johnson and Bergman, the filmmaker and producer known for critically beloved, modestly-budgeted one-off thrillers Brick and Looper before they made Star Wars: The Last Jedi. An MRC rep said the company was “proud” to have partnered with Johnson and Bergman on the first Knives Out and noted that the duo “have always controlled the rights” to the franchise.

Sources note that Lionsgate had what was considered a solid deal in which the company had first right of negotiation and last rights of refusal, all part of the negotiation safety net with which companies normally shield themselves from losing projects. (Lionsgate and CAA declined to comment.) And Johnson and Bergman were considered big backers of the theatrical experience.

But that was before the pandemic hit, theatrical took a nosedive and backend became nonexistent. In January, with the pandemic in full swing, and a hoped-for summer production start for a sequel, Johnson and Bergman questioned the near-term viability of theatrical releasing. CAA began shopping the deal and streamers like Netflix pounced hard. MRC and Lionsgate, which in normal times may have gotten the project, could not compete. “It became a perfect storm,” says one insider. “This would not have happened a year ago.”

For Netflix, despite the price tag, the deal made sense on several levels. The streamer gets an instant and proven franchise with sequels to a film that grossed $311 million globally. And it cannily weakens a theatrical competitor.

“Yes, it’s overpaying but Netflix is playing chess while everyone else is playing checkers,” says one streaming executive familiar with the deal. “It takes a proven theatrical commodity off the board and puts it in their pocket. And it’s another way they re-educate audiences to think of streaming and their company above a studio.”

For others, the deal shows the leverage sought-after talent is enjoying at this moment, thanks to the competition from streamers. “If you’re talent right now, and you want to bet on yourself, it’s a pretty good time.”