Netflix Concerned Whether Relativity, Or Potential Buyers, Can Deliver Promised Content

For bankrupt Relativity Media, one silver lining appeared to come in the form of its ongoing contract to provide content for Netflix. One confidential document from a Relativity lender put the value of the deal at $56 million or more.

But Netflix filed papers in U.S. Bankruptcy Court in Manhattan Wednesday afternoon suggesting that it has concerns about Relativity being able to deliver the minimum number of films a year called for in its contract. Though that number is not specified, the streaming service’s filing says that Relativity has “to date, provided only two films to Netflix in 2015,” and adds: “This gives rise to substantial concerns regarding whether [Relativity] will be able to meet their yearly minimum for the 2015 calendar year.”

The Netflix court filing says the company has no immediate objection to Relativity’s plan for a quick sale but that the company wants more controls built into the sales procedure to make sure that any new owner is in a position to deliver the contracted minimum number of films. The current quick deadlines, with an auction scheduled for Sept. 16, would not give Netflix enough time to judge a potential future partner, the company’s legal motion says.

Netflix’s deal with Relativity runs through 2018.

“Netflix is confident,” the motion states, “that the bidding procedures can be modified so as to allow [parties to the sale] to appropriately evaluate and respond to the proposed assumption and assignment of their contracts without unduly interfering with the Debtors’ overall sale process.”

Netflix’s motion asks the court to allow it to have time to assert any objections to any potential new partner. It also asks for the right to conduct discovery to discern whether the potential new partner is up to the task of providing the online subscription service with the content it needs.

The motion was filed just before a Wednesday afternoon deadline for objections to the bankruptcy auction. A hearing is set for Friday morning.

Relativity filed for bankruptcy July 30, citing nearly $1.2 billion in liabilities and assets it claimed are worth $560 million. Some financial analysts and hedge fund operators looking at the TV- and film-maker believe that the company is worth considerably less.

The senior lenders are attempting a quick auction. Lawyers from the firm of Jones Day, representing  Anchorage Capital Group, Luxor Capital Group and Falcon Investment Advisors, say the early sale will help preserve the maximum value of the company for all of the creditors.

More Film

  • sith trooper

    Sith Trooper Revealed From 'Star Wars: The Rise of Skywalker'

    “Star Wars: The Rise of Skywalker” revealed a new storm trooper uniform Wednesday at San Diego Comic Con as part of a special exhibit celebrating the evolution of the storm trooper design. Dubbed the Sith trooper, the new uniform sports all-red armor plates with a matching red and black blaster. Also decorating the armor is [...]

  • Dunkirk

    Harry Styles Is the Perfect Prince Eric; Why He'd Rock 'Little Mermaid' Role

    Could Harry Styles be the perfect Prince Eric? One day after the announcement that the One Direction star is “in early negotiations to play the iconic ‘Little Mermaid’ role,” the internet exploded with speculation as to how he would portray the object of Ariel’s affections. “I can see lots of reasons why Harry is perfect,” [...]

  • The Lion King

    Film News Roundup: PETA Sponsors Rescued Lion in Jon Favreau's Name

    In today’s film news roundup, PETA honors Jon Favreau for “The Lion King,” “Tigers Are Not Afraid” gets a theatrical release, a Kirk Franklin biopic is in development and “The Sixth Sense” gets an anniversary showing in Philadelphia. HONOR The People for the Ethical Treatment of Animals is sponsoring a rescued lion to honor director [...]

  • Tokyo Director-in-Focus-at-Japan-Now

    Nobuhiko Obayashi set as Japanese Director in Focus at Tokyo Film Festival

    Indie director, Nobuhiko Obayashi will be feted as the director in focus at the Japan Now section of this year’s Tokyo International Film Festival. The festival will give a world premiere to his “Labyrinth of Cinema.” Supporting his art by shooting commercials, Obayashi is an indie whose dreamy works have influenced numerous other directors in [...]

  • Jimmi Simpson Joins Russell Crowe Movie

    Jimmi Simpson Joins Russell Crowe Thriller 'Unhinged' (EXCLUSIVE)

    Jimmi Simpson will play a key role in “Unhinged,” Variety has learned. He joins an impressive cast that includes Oscar-winner Russell Crowe and Caren Pistorius. Solstice Studios is producing the psychological thriller, which is currently filming in New Orleans. “Unhinged” centers on a woman named Rachel (Pistorius), who leans on her horn at the wrong [...]

  • David Crosby

    David Crosby Says New Documentary 'Remember My Name' Is Like 'Being Naked in Public’

    “It’s not easy. It’s hard being naked in public,” David Crosby, the legendary troubadour of classic rock, reflected at Tuesday night’s New York City premiere of “David Crosby: Remember My Name.” “I don’t know what to do here. There’s no guitars, no drums,” he laughed. Directed by newcomer A.J. Eaton and produced by the legendary [...]

  • Javier Bardem Dune

    Javier Bardem in Talks to Play King Triton in Disney's 'Little Mermaid'

    Javier Bardem is in talks to play King Triton in Disney’s live-action remake of “The Little Mermaid.” Halle Bailey will portray the Ariel, a mermaid princess who dreams of being a human, while Melissa McCarthy is playing her evil aunt Ursula. Harry Styles is also in early talks to play Prince Eric. “The Little Mermaid” [...]

More From Our Brands

Access exclusive content