Starz Entertainment filed a federal lawsuit on Monday accusing MGM of a massive violation of exclusivity agreements, allowing hundreds movies and TV shows to run on rival platforms.
According to the suit, the issue came to light last August, when a Starz employee noticed that “Bill & Ted’s Excellent Adventure” was available on Amazon Prime. The film was supposed to be airing exclusively on Starz.
Starz complained to MGM. After some back and forth, MGM ultimately admitted in November that it had allowed 244 films and TV shows that were licensed to Starz to run on other platforms, the suit states. Some have run on Epix, the MGM-owned premium network.
According to the complaint, Starz had paid MGM about $70 million under two agreements in 2013 and 2015, which allowed the network to license 585 movies and 176 TV shows. Starz filed a list of TV shows and movies that it believes were shown elsewhere, including several James Bond films, “The Terminator,” “Thelma and Louise,” “Raging Bull,” and many episodes of the 1950s TV show “Bat Masterson.”
The suit alleges that MGM’s conduct has harmed Starz in the eyes of consumers and distributors, and “has caused at least one major distributor to question STARZ’s value and significantly damaged STARZ’s relationship with that distributor.”
In November, MGM advised Starz that it had corrected the issue with its rights-tracking system, the suit states. However, Starz claims that more than a month later, some of the titles were still available on competing platforms.
“Starz has since learned that MGM’s breach of exclusivity has been happening since at least 2015 without Starz’s knowledge,” the suit alleges. “Through Starz’s continuing internal review, it has so far identified nearly 100 additional movies (not included on MGM’s list) that appear to have been licensed to third parties during time periods in which Starz enjoyed exclusivity.”
Starz’s attorneys say they need discovery to uncover the full scope of the violations.
Orin Snyder, MGM’s attorney, said in a statement that Starz is making a big deal out of a “routine licensing dispute” to cover for its own failures.
“The lawsuit is a transparent effort by Starz to use litigation to deflect attention away from its own competitive shortcomings,” Snyder said. “Starz is pretending that a routine licensing dispute with MGM, that had no meaningful financial impact, is the cause of Starz’s failure to win in the marketplace. We will vigorously defend against these claims.”