TSG Entertainment, a prominent investment player with a track record of funneling over $3 billion into numerous films from 20th Century Studios (previously known as 20th Century Fox), has now voiced allegations against the media giant, Disney. Their claim? Disney utilized Hollywood’s notorious accounting tactics to intentionally shortchange TSG Entertainment out of a sizeable monetary portion.
A Brief Background
Over the years, TSG has not shied away from backing major cinematic endeavors. This includes the recent chart-topping film, Avatar: The Way of Water, orchestrated by the legendary James Cameron. As it currently stands, this production has climbed the charts to become the third highest-grossing film ever made.
Delving into the Allegations
The lawsuit, officially filed this past Tuesday, brings to light accusations that Disney sought to “employ almost every trick in the Hollywood Accounting book“. TSG believes that this was a calculated attempt to deprive them of hundreds of millions associated with their investment stakes. Interestingly, while the suit specifically mentions both Twentieth Century Fox Film Corporation and Walt Disney as the main defendants, it still occasionally references the entity as “Fox”, even though it’s currently recognized as 20th Century Studios under Disney’s ownership.
Central to their argument, TSG emphasizes that Disney’s “self-dealing” actions involved strategically rerouting Fox films. Instead of sticking to a profitable HBO licensing deal, Disney opted to feature these films on their very own platforms: Disney+ and Hulu. This, TSG asserts, was not a move in their favor.
Furthermore, the lawsuit sheds light on what are termed as “sweetheart” deals. These deals saw Fox licensing films to the FX cable channel, bypassing other, possibly more lucrative, contract opportunities. Given TSG’s hefty investment—over $3.3 billion across 100 films in a decade—such decisions have apparently stunted their potential income. This, they argue, has had a domino effect, limiting their ability to further invest in big-ticket productions like Avatar, thereby affecting their ultimate profit share.
Digging Deeper: Audit Revelations
In a turn of events, an independent audit initiated by TSG on Disney and 20th Century Studios unveiled that TSG was potentially shortchanged by a staggering $40 million for just three films. This roster includes the acclaimed The Shape of Water. Probing deeper, TSG speculates that the owed sum might escalate to hundreds of millions.
Echoes of Past Controversies
The lawsuit has drawn John Berlinski into the limelight, an attorney who is no stranger to Disney’s legal entanglements. His claim to fame includes successfully representing Scarlett Johansson against Disney when the latter’s dual release strategy for Black Widow allegedly compromised the actress’s profit cut. That episode culminated in a $40 million settlement in Johansson’s favor.
As of now, Disney remains tight-lipped, offering no comment on the lawsuit tabled by TSG Entertainment.
Conclusion
As TSG Entertainment embarks on this legal journey against a media behemoth like Disney, it brings forward deeper questions about industry practices and fairness in profit-sharing. With substantial investments and notable films under its belt, TSG’s quest for what it deems rightfully theirs will be a saga keenly watched by many. The outcome, whatever it might be, promises to have repercussions across the cinematic landscape.
