Disney Sued for Tampering with Deal, $40 Million Debt to Financier
By Movieguide® Contributor
Disney is facing a lawsuit alleging the company tampered with a deal between 20th Century Fox and TSG Entertainment Finance.
TSG alleges that Disney interfered with the deal in an effort to raise Disney+ and Hulu subscriptions, stock prices and salaries for executives. They have sued 20th Century Fox for breach of contract and Disney for inducing the breach.
The company also claims that an independent audit of three movies has revealed that they are owed over $40 million and suspect that the total of what they’re owed is somewhere in the hundreds of millions.
Deadline reported, “Echoing the Scarlett Johansson suit over the release of Black Widow across both movie theaters and Disney+ in 2021, TSG contends that Disney made a number of moves aimed at feathering its own streaming nest.”
“This windowing of film distribution is designed to maximize profits for the studios (and for stakeholders like TSG) by preventing one distribution revenue stream from cannibalizing another,” the lawsuit stated. “When windows are collapsed on one another, however, the studio (and its investors) miss out on significant potential sources of revenue.”
The suit continued, “At its root, it is a chilling example of how two Hollywood behemoths with a long and shameful history of Hollywood Accounting, Defendants Fox and Disney, have tried to use nearly every trick in the Hollywood Accounting playbook to deprive Plaintiff TSG — the financier who, in good faith, invested more than $3.3 billion with them — out of hundreds of millions of dollars” [per CNBC].
TSG’s attorney, John Berlinski, said, “Disney (and the executives running it) had and continue to have every incentive to do anything and everything they can, including manipulating distribution of the Qualifying Pictures and preventing TSG from liquidating its interests in certain tranches of Qualifying Pictures, to attempt to boost Disney’s share price at the expense of TSG and other profit participants.”
Movieguide® recently reported on the Disney+ price hike:
During its Q3 fiscal report, Disney announced it would raise the price of Disney+ later this year, a decision that has caused many consumers to reach a breaking point with the service.
The media giant announced that Disney+’s cheapest ad-free plan would jump from $10.99 to $13.99 a month. This is the second price hike in less than a year, causing subscriptions to the platform to rise by a combined 75%.
While announcing the change, Disney’s CEO Bob Iger shared insight on the previous price increase.
“We took a pretty significant price increase at Disney+ sometime in late 2022, and we really didn’t see a significant churn or loss of subs because of that, which was actually really heartening,” Iger said.
If the company was hoping for a similar response to their newest change, they didn’t get it. After the announcement, “Cancel Disney Plus” was trending across social media.
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