Fox Seeks $24 Million in Rev-Share Funds From Blockbuster23 Feb, 2011 By: Erik Gruenwedel
20th Century Fox Home Entertainment is asking a bankruptcy court to force troubled Blockbuster to pay millions in revenue-sharing funds, in addition to payment for shipped rental discs.
The studio Feb. 18 filed a motion in U.S. Bankruptcy Court in New York asking that Blockbuster “sequester” the funds required to pay the studio about $24 million in revenue-sharing funds.
The motion — filed three days before Blockbuster put itself up for sale — claimed the Dallas-based rental icon entered into a rev-share agreement with Fox on Aug. 28, 2005, mandating it pay a pre-determined (confidential) amount per rental transaction.
Don Jeffries, SVP of distribution for Fox Home Entertainment, said the motion was filed after Blockbuster informed him in January that it would not be able to pay the rev-share funds per instructions from its debtor-in-financing lenders, according to the filing.
Going forward, Fox contends Blockbuster also would not be able to pay almost $7 million in rev-share monies generated by the studio’s discs.
“Blockbuster’s latest actions indicate that there is at least a significant risk, if not a complete certainty, that Blockbuster will not turn over the revenue to [Fox Home Entertainment],” the complaint read.
The studio said that with each passing week, new release movie discs lose appreciable value similar to that of a new car driven off the lot and subsequent depreciation with each mile driven thereafter.
A hearing on the matter is slated for March 29.