Netflix declares Relativity Media lawsuit 'baseless and ironic'

Relativity Media argue they 'single-handedly converted Netflix from a DVD mail-order company into a pay television business'

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The Independent Culture

There’s currently a rather large lawsuit being filed against Netflix by Relativity Media, claiming the streaming service giants owe the production company “in excess” of $1.5 billion. 

In short, Relativity Media claim Netflix broke the agreed upon contract and committed “trade libel” by suggesting the studio’s recent films should be released on Netflix before hitting cinemas, according to Variety

Netflix claims they asked the US Bankruptcy Court Judge Michael Wiles for permission to release Masterminds and The Disappointments Room before theatrical release, something the judge denied, saying that method of release ‘undermines’ the agreement between the two companies.

Relativity argues how the streaming service then attempted to renegotiate their initial contract - which saw Netflix pay out between $100 million to $300 million a year to show Relativity films - leading to others in the industry to question their contracts with the studio, leading to a fall in profits.

 “This misrepresentation of the License Agreement caused investors to question Relativity’s ability to make money,” the lawsuit reads. 

This all led to Relativity - who helped produce such films as Pineapple Express, Step Brothers, The Pursuit of Happyness, The Social Network, Scott Pilgrim vs. the World, 21 Jump Street, and Dumb and Dumber To - filing for bankruptcy last year.

The lawsuit contends that Relativity helped Netflix become the industry giant it is today, arguing: “In choosing Netflix as its pay television or SVOD partner, Relativity single-handedly converted Netflix from a DVD mail-order company into a pay television business.”

A spokesperson for Netflix, however, told the aforementioned publication that the lawsuit is “baseless and ironic.” During the court hearing, Netflix argued Relativity had actually failed on their contract by failing to produce the set number of films for the dates they promised.

This is by no means the first time Netflix has been sued; after the price hike earlier this year, one member of the public decided to sue the streaming service 'on behalf of 22 million people'.