Netflix’s plans to put Relativity’s Zach Galifianakis-starring Masterminds and the Kate Beckinsale-starring The Disappointments Room up on its streaming service next month were unplugged today by a federal judge. But the streaming service intends to challenge the ruling by Judge Michael Wiles ASAP, I hear. Netflix will file today for a stay in the ruling made Friday in NYC and seek an expedited appeal.
Wiles had already indicated in past hearings on the matter he was inclined to deny Netflix’s reading of its contract with Ryan Kavanaugh’s company and the ability to stream the pics in June, ahead of Relativity’s planned theatrical releases later this year.
Needless to say, Netflix didn’t agree.
“What is happening here, outside the bankruptcy process, because the confirmation has already occurred, is there is an attempt to strip us of a benefit that we have under a contract without giving us the protections and the rights that we would have had had they done it correctly inside the bankruptcy,” said Stephen Mick for Netflix at a hearing on dispute May 23. “It is our view that that attempt is contrary to law. It is contrary to process. It is contrary to the bankruptcy code. It is a deprivation of our interest and rights in the distribution of this film.”
Initially seeking to resolve the matter in arbitration, Netflix insist that the $7.4 million minimum guarantee they paid to Relativity for the pics entitles them to put them online according to previously agreed upon dates. Having finally emerged from Chapter 11 on March 18, Relativity has set new release dates for the pics and argued that such streaming would wreck any chance of the films succeeding at the box office.
As a part of its slate plans to get on its feet, Relativity has set a September 30 release for heist comedy Masterminds, which stars Galifianakis, Kristen Wiig and Jason Sudeikis. The D.J. Caruso-helmed horror pic The Disappointments Room is scheduled to come out December 16.
Even before the ruling this morning, Netflix filed paperwork claiming the bankruptcy court lacked the power to make the company enact what its sees as additions to its contracts with Relativity — contracts that Relativity have said are a big part of its post-Chapter 11 rebirth.