MGM is being sued by Lionsgate-owned cablenet Starz, which has accused the US studio of breaking exclusivity agreements by allowing hundreds of its own movies and TV shows to be aired on rival platforms.
Starz filed a federal lawsuit in the US yesterday stating that the issue was first raised last August when an unnamed Starz employee discovered that the sci-fi comedy Bill & Ted’s Excellent Adventure – which should have been exclusive to Starz in the US – was available for streaming via Amazon Prime.
“After notifying MGM of this discovery, MGM admitted this breach,” reads the complaint. “Starz, however, discovered that Bill & Ted’s Excellent Adventure was far from the only film that MGM appeared to have improperly licensed.”
Derailed tracking claims
The suit states that MGM claimed the issue with its rights-tracking system had been resolved by November of last year, but Starz found that some of the titles were still available on competing platforms more than a month later.
It adds: “Unbeknownst to Starz, by at least 2015 (and potentially earlier), MGM began granting licenses to the Starz-exclusive pictures to other competing content services during the very time periods in which Starz had the exclusive rights.
“By its own admission, MGM licensed over 32% of the pictures in the library agreements to competing services, in violation of Starz exclusive rights to those movies.”
Starz is seeking a jury trial and significant financial damages, highlighting that the situation “has caused at least one major distributor to question Starz’s value and significantly damaged Starz’s relationship with that distributor.”
MGM uses ‘deflect’ defence
MGM was dismissive in its response to the claims and described the lawsuit as “a transparent effort by Starz to use litigation to deflect attention away from its own competitive shortcomings.”
MGM’s lawyer Orin 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.”
The 25-page Starz lawsuit names many other specific films, including Mad Max, Terminator and The Good, the Bad, And The Ugly, which were also supposed to be covered under the two company’s exclusivity agreements but ended up being shown on rival platforms.