Disney Hit With Another Lawsuit, Accused of Hoarding Millions in Profit

Disney has been in the middle of a number of lawsuits lately, and now they’ve been hit with another.

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Disney recently filed a notice that they’re working on finalizing a settlement for one Park pass lawsuit, but a judge has ruled against them in a case related to the Reedy Creek Improvement District, and other updates on cases involving Disney have been shared. But now we’ve got to take a look at an entirely separate lawsuit that has been filed against Disney recently.

According to Deadline, Disney (and 20th Century Fox Film Corporation — “Fox”) has been hit with a new lawsuit, this time in Los Angeles Superior Court by TSG — a film financier. TSG alleges that Disney used “nearly every trick in the Hollywood accounting book” to “deprive” TSG of “hundreds of millions of dollars.” Or, as Deadline puts it, Disney is being accused of using those tricks to “hoard” millions in profit.

©Disney | Walt Disney Company Headquarters

TSG claims that they financed some of Fox’s most successful movies in recent years including Avatar: The Way of Water, Bohemian Rhapsody, Deadpool, Deadpool 2, Logan, and more. TSG says it had an agreement with Fox whereby Fox promised to give TSG a share of certain receipts from the films.

But, TSG alleges that as the years went on, that return on investment “decreased dramatically.” TSG later hired an auditing firm to see what was going on and the auditors reportedly found that Fox failed to credit TSG certain amounts, there was “rampant ‘self-dealing'” aimed at minimizing profits for stakeholders like TSG, and Fox breached its agreement with TSG in other ways.

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TSG also discussed how up until recently, nearly all movies stayed in theaters for 90-120 days, then went to pay-per-view options, home video, pay television, and finally subscription video-on-demand. They claim it was done this way to maximize profits and argue that Fox had agreed to license HBO its movies released through 2022.

That has since changed, however, and now movies like The Way of Water often go directly to streaming services like Disney+ after being in theaters for a bit and then becoming available for digital purchase. TSG says this change came at a “great cost” to them.

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They say this change in distribution strategy was all part of Disney’s strategy to ” prop up” its own streaming platforms and price of its stock using “content from other divisions of the company.” And they claim that this was done “recklessly and with little forethought.”

The complaint goes on to accuse Fox and/or Disney of refusing to allow TSG to exercise certain rights to “generate liquidity” and says that Disney/Fox have tried to “bully TSG into submission and prevent the filing of this lawsuit.”

AMC Theater

The lawsuit brings certain counts against Disney and others against Fox. Ultimately, it seems TSG is asking for monetary damages, punitive damages (which are damages meant to basically “punish” bad actions), and other relief.

Interestingly, Deadline notes that the lawyer representing TSG is the same as the one that represented Scarlett Johansson in her lawsuit against Disney, which was also related to distribution issues. That lawsuit was ultimately settled.