×

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.”

More Biz

  • Wimbledon Canceled Due to Coronavirus

    Wimbledon Tennis Tournament Canceled Due to Coronavirus

    Wimbledon tennis tournament has been canceled because of the coronavirus pandemic – the first time this has happened since World War II. The tournament was due to be played between June 29 and July 12. The 134th championships will instead be staged from June 28 to July 11, 2021. The decision follows the postponement of [...]

  • THE MASKED SINGER: The Bear in

    Comcast and Fox Corp. Set Broad New Carriage Agreement

    Comcast and Fox Corp. have come to terms on a broad carriage agreement covering all of Fox’s cable channels, including Fox News, and its O&O local TV stations. The long-term deal is significant for Fox Corp. given the importance of Comcast’s distribution footprint to core earnings. The pact covers authenticated streaming rights to Fox properties [...]

  • Bob Backish ViacomCBS

    ViacomCBS' Path Ahead Grows Steeper Amid the Coronavirus Pandemic

    ViacomCBS has come to a crossroads, again. The company that has endured more drama in the C-suite in recent years than any of its larger rivals was already under pressure this year to prove it could muster a comeback in a big way. Now, with the black swan named coronavirus roiling the waters, leaders of [...]

  • Brian Roberts comcast

    Top Comcast, NBCUniversal and Sky Executives to Donate Salary Amid Coronavirus Crisis

    Comcast chief Brian Roberts, NBCUniversal CEO Jeff Shell and other division leaders at Comcast will donate their salaries to coronavirus-related relief efforts as the world grapples with the devastating pandemic. In a memo sent to Comcast’s 190,000 employees worldwide on Wednesday. Roberts said the salary donations would also be made by Comcast CFO Mike Cavanagh, [...]

  • T-Mobile

    T-Mobile Completes Sprint Takeover, Repeats Vow to Not Raise Prices for 3 Years

    T-Mobile said it officially closed its merger with rival Sprint — creating a wireless carrier with over 100 million customers nationwide — and reiterated its pledge to not increase customers’ fees for the next three years. The deal, worth more than $31 billion based on T-Mobile’s closing stock price Tuesday, ends the nearly two-year effort [...]

  • Talent Agencies in Turmoil Placeholder

    Can Talent Agencies Adapt in the Wake of the Coronavirus Pandemic?

    Two words have been bouncing around the email inboxes and Slack channels that now comprise the virtual workplaces of Hollywood’s talent agencies, and they aren’t “social” and “distancing.” The buzz terms that have sprung from more than a dozen conversations Variety has held with top dealmakers and the companies they work with are “fragmentation” and [...]

More From Our Brands

Access exclusive content