Financier TSG Says Disney Cheated Them in Millions – Watch

Film financier TSG is suing Disney for allegedly withholding millions in profits by using “nearly every trick in the Hollywood accounting book.”

The finance company has spent $3.3 billion on 140 projects at Fox, which was acquired by Disney in a $71.3 billion deal in 2019, per Deadline. Some of these projects include ”The Banshees of Inisherin,” “Avatar: The Way of Water,” “Bohemian Rhapsody,” “Deadpool,” “The Grand Budapest Hotel,” and “The Shape of Water.”

A major issues in the lawsuit involves distribution. The industry standards have shifted dramatically due to streaming services becoming more popular, especially after COVID lockdowns.

“This windowing of film distribution is designed to maximize profits for the studios (and for stakeholders like TSG) by preventing one distribution revenue stream from cannibalizing another,” the lawsuit says. “When windows are collapsed on one another, however, the studio (and its investors) miss out on significant potential sources of revenue.”

TSG’s attorney John Berlinski used the phrase “Hollywood accounting” to describe how studios “cheat” investors, including his clients, out of profit money. The attorney also represented Scarlett Johansson when she sued Disney over her cut of the film “Black Widow.”

“Disney (and the executives running it) had and continue to have every incentive to do anything and everything they can, including manipulating distribution of the Qualifying Pictures and preventing TSG from liquidating its interests in certain tranches of Qualifying Pictures, to attempt to boost Disney’s share price at the expense of TSG and other profit participants,” Berlinski wrote in the complaint.

“Moreover, as Disney’s own CEO, Bob Iger, has admitted, his company pursued this strategy recklessly and with little forethought,” the document states. “For example, during Disney’s August 9, 2023 earnings call—in which Mr. Iger announced Disney+’s second subscription price increase in a year—Mr. Iger admitted with respect to Disney+, ‘We grew this business really fast, really before we even understood what our pricing strategy should be or could be.’”

Officials for Disney have not yet commented publicly on the lawsuit.

Source: DailyWire