Warner Brothers studios may get sued for breach of contract thanks to its recent announcement that it would send all seventeen of its movies scheduled for release in 2021 to HBO Max at the same time they’re released to studios. This announcement came as an unpleasant surprise to some, including Legendary Entertainment, the company that helped finance recently filmed buy unreleased blockbusters to come like “Dune” and “Godzilla vs. Kong.”
Movie Distribution Contracts in the Pre-Coronavirus World
The typical pre-Covid contract between movie producers and the companies that financed the films called for distribution to initially occur solely through movie theatres. After the movie had been run a certain amount of time in theatres, it would then go to streaming services for rent and sale. The coronavirus pandemic turned the movie business on its head due to mass theatre closings and bankruptcies filed by some of the major players in the game.
Legendary put out a significant amount of money to help finance “Dune,” with a budget of $175 million and “Godzilla vs Kong” with a budget of $160 million. With that much skin in the game one would think that the studio would have kept them in the loop regarding the negotiations with movie theatres and HBO Max. Unfortunately, Warner Brothers did not keep Legendary informed so that the first the production company heard about the negotiations, the deal was being announced in the press. Legendary claims it will incur substantial damages due to Warner Bothers’ actions, while Warner Brothers claims it has contract defenses to the claims.
The Parties May Negotiate a Settlement
Before Legendary files a breach of contract lawsuit against Warner Brothers; however, the parties are attempting to negotiate a resolution. They have a long history of working together on other successful films like “The Hangover” and related “Godzilla” movies as well. Various solutions could be negotiated. One possibility is to simply sweeten the pot and pay Legendary slightly above the current amount it will receive from the HBO Max deal, as is. Another potential solution could be for Legendary to sell the films outright to Warner Brothers, which could then do as it pleased with the films. Settlement negotiations are always preferable to breach of contract litigation, which can be expensive and time consuming, but as we all know, sometimes you simply cannot agree to a deal that both sides will accept.
Contact an Experienced Breach of Contract Lawyer in Orlando
If you have a question for a breach of contract lawyer in Orlando, then contact the Spence Law Firm today to schedule your free initial consultation.