×

Netflix and Relativity Settle Contract Dispute, Clearing Obstacle to Sale

Netflix and Relativity Media have settled their protracted legal dispute in New York Bankruptcy Court, clearing an obstacle to a court-supervised sale of Relativity to UltraV Holdings.

Relativity declared bankruptcy in May, after failing to raise fresh capital upon emerging from its first bankruptcy in 2016. The Netflix contract is one of its primary remaining assets. Netflix had accused Relativity of breaching the agreement by failing to maintain exclusivity on five titles, and by failing to deliver the promised number of films to the streaming platform.

Netflix withheld about $3.9 million in payments to Relativity after declaring the breach in April. Under the settlement agreement, Netflix will pay those funds and an additional $3.25 million in fees. UltraV will also be able to stream up to 30 titles on Netflix once it takes control of the company.

“Today’s settlement with Netflix resolves nearly four years of litigation and other disputes that threatened the value of the Relativity estate,” said Colin Adams, Relativity’s chief restructuring officer. “The settlement helps preserve the value of the Relativity estate for creditors, paving the way for the asset sale to UltraV Group, and granting UltraV the unquestionable right to stream up to 30 films on Netflix. We look forward to closing the sale to UltraV and winding down the Relativity estate.”

Netflix had sought to block UltraV from taking over Relativity’s contract, arguing that UltraV had no relevant entertainment industry experience and had not demonstrated the financial capacity to deliver on its obligations. Netflix signed the contract in 2010, when Relativity was still a productive enterprise. The contract is set to expire at the end of this year.

In a pre-trial brief, Netflix argued that UltraV saw the contract as “an arbitrage play” — “an opportunity to exploit an above-market rate card by pushing through any third-party-produced title that can be begged, borrowed, or bought in the marketplace between now and the end of the calendar year.”

Popular on Variety

More Biz

  • Led Zeppelin Stairway to Heaven

    Department of Justice Backs Led Zeppelin in ‘Stairway to Heaven’ Copyright Case

    The U.S. Department of Justice has weighed in on the next big music copyright case on the horizon following the Katy Perry “Dark Horse” decision, and taken Led Zeppelin’s side in the long-running copyright dispute that pits the writers of the group’s anthem “Stairway to Heaven” against the publishers of the earlier song “Taurus” by [...]

  • Harvey Weinstein

    Harvey Weinstein Prosecutors Make Last-Minute Move to Bolster Case

    The Manhattan D.A.’s office is making a last-minute bid to strengthen its case against Harvey Weinstein, who is set to be tried next month on charges of rape and sexual assault. Prosecutors notified the court on Tuesday that they will seek a new indictment. The D.A.’s office wants jurors to hear from Annabella Sciorra, the [...]

  • Jeffrey Epstein

    Jeffrey Epstein's Autopsy Rules That He Died by Suicide

    Jeffrey Epstein’s death earlier this month has been ruled a suicide by hanging. The New York Times reported on Friday that the city’s medical examiner has officially made the ruling six days after Epstein was found dead in his jail cell at the Metropolitan Correctional Center in Manhattan. According to the Times, which cites a [...]

  • America Ferrera Eva Longoria

    America Ferrera, Eva Longoria and More Sign Letter to Latinx Community: 'We Will Not Be Broken'

    America Ferrera, Eva Longoria and more have signed a letter published in several media outlets on Friday standing in solidarity with the Latinx community. In response to the heightened tension surrounding President Trump’s immigration agenda, the El Paso shooting that targeted Latinx people and the ICE raids in Mississippi, the letter addresses the language used [...]

  • Research Firm Screen Engine/ASI Acquires TicktBox

    Screen Engine/ASI Acquires TicktBox, an Entertainment Marketing and Ticketing Startup

    Screen Engine/ASI, a market research firm that specializes in focus-group testing of movies and TV pilots, has acquired ticktBox, which operates a digital marketing and ticketing platform used by movie distributors, exhibitors, and TV networks. Terms of the deal, which closed Aug. 9, weren’t disclosed. With ticktBox, SE/ASI will have one of the largest databases of [...]

  • NEW YORK, NEW YORK - AUGUST

    Eric Reid, Jemele Hill – and Colin Kaepernick? - Take Jay-Z to Task Over NFL Partnership

    When news of the presumably lucrative entertainment and social-justice deal between Jay-Z’s Roc Nation and the NFL leaked on Tuesday, initially there was a surprising lack of public reaction or outcry. But after a press conference where Jay and NFL commissioner Roger Goodell officially announced the deal at Roc Nation’s New York offices yesterday — [...]

More From Our Brands

Access exclusive content