Judge: Netflix can’t release Relativity movies ahead of theatres


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Michelle Clancy

| 02 June 2016




Netflix has been thwarted in its hope to release two upcoming films from Relativity Media prior to their official theatrical release.




mastermindsA judge has ruled that Netflix’ exclusive streaming deal with Relativity doesn't mean it gets to jump the line for the release window.

Netflix wanted to release the films because Relativity missed the original 2015 release dates due to financial woes, leading to bankruptcy. Just because that the theatrical release has been delayed, the streaming release date shouldn’t be, argued Netflix.

However, bankruptcy court Judge Michael Wiles said that the problem is that Relativity, which filed for bankruptcy in July 2015, only recently emerged from Chapter 11. Given the situation, pre-releasing the two upcoming movies, Masterminds, starring Zach Galifianakis and Kristen Wiig, and The Disappointments Room, starring Kate Beckinsale, would "threaten the bankruptcy process" by cutting into the films’ box-office and therefore profits.

The Wall Street Journal reports that Netflix has paid around $283 million in licensing fees to Relativity since 2010 to gain exclusive access to movies like Limitless, Act of Valor and The Fighter. And, Netflix argued that its contracts with Relativity were "clear and unambiguous" when it came to streaming release dates for the films.

But re-negotiation was not in the cards, according to both parties.

"Netflix waited so that it could interfere with implementation of these arrangements to have leverage to terminate the contract," Wiles said, according to the WSJ.