Starz Hits MGM With A Most Excellent Exclusivity Lawsuit; MGM Claims Move Is Deflection – Update

UPDATED with MGM statement: An unnamed Starz staffer should get a big promotion if the premium cabler is successful in its just-filed breach of contract lawsuit against MGM. The suit accuses the company for double and even triple dipping more than 300 movies and TV series to which the multi-platformer thought it had the exclusive rights.

“In August 2019, Starz first became suspicious that MGM might have violated the terms of the Library Agreements after a Starz employee discovered that Bill & Ted’s Excellent Adventure – a film that should have been exclusive to Starz – was available for streaming on Amazon,” reads the complaint put before a federal court Monday (read it here).

“After notifying MGM of this discovery, MGM admitted this breach,” added the five-claim suit that seeks a jury trial. “Starz, however, discovered that Bill & Ted’s Excellent Adventure was far from the only film that MGM appeared to have improperly licensed.”

Citing that this seemingly five-year-old situation “has caused at least one major distributor to question Starz’s value and significantly damaged Starz’s relationship with that distributor,” the Lionsgate-owned company is seeking widespread big-bucks damages and profits.

Having taken a whack themselves, MGM went for the jugular in its response Monday.

“The lawsuit is a transparent effort by Starz to use litigation to deflect attention away from its own competitive shortcomings,” MGM’s counsel Orin Snyder said. “Starz is pretending that a routine licensing dispute with MGM, that had no meaningful financial impact, is the cause of Starz’s failure to win in the marketplace.” the hard-hitting Gibson Dunn lawyer added. “We will vigorously defend against these claims.”

Whatever form that defense takes against the home of Power and Outlander, the 25-page suit lists many other specific films besides the 1989 Keanu Reeves and Alex Winter cult classic. The likes of Mad Max, the original Terminator, a bunch of James Bond flicks, Dances With Wolves, the Tom Cruise- and Dustin Hoffman-starring Rain Man, Hannibal, Moonstruck, and The Good, the Bad, and the Ugly were also supposed to be covered under the parties’ 2013 and 2015 Library Agreements – yet apparently ended up in a lot of other places besides Starz’s outlets.

“Due to MGM’s breach, distributors of Starz’s content believed that Starz’s movies were widely available from other services, when, in fact, they should have been available only through Starz,” the initial complaint declares, noting that some MGM projects that should have been on Starz entities only actually ended up on Epix, which is owned by the defendant. “That lack of exclusivity damaged Starz vis-à-vis distributors, who placed less value on Starz’s suite of offerings due to the belief that their customers could find Starz’s movies elsewhere.”

“In short, not only has MGM admitted to breaching the exclusive rights it granted to Starz, it is plain that MGM directly profited from that breach in numerous ways.”

Dude … talk about needing to face the music.

And hey, Starz, hope you are treating that eagle-eyed employee right!