Redbox, Paramount Renew Distribution Agreement20 Nov, 2014 By: Erik Gruenwedel
Studio gets 50,000 shares of vested Outerwall stock as part of the deal
Redbox and Paramount Home Media Distribution have renewed a distribution agreement for the studio’s new-release movies on street date through Dec. 31, 2015, according to a regulatory filing by Redbox parent Outerwall Inc.
As part of the deal, Outerwall will issue Paramount 50,000 vested shares of common stock on Jan. 1, 2015. Paramount has an additional option to extend the agreement through Dec. 31, 2016.
Paramount (along with Sony Pictures Home Entertainment and Lionsgate) in 2009 became one of the first major studios to ink a distribution deal licensing new-release movies on street date to Redbox. The reported $575 million, five-year Paramount agreement was set to expire at the end of the year.
The 50,000 shares were negotiated directly with Paramount a few years ago as part of the original agreement. This included two, one-year extensions with equity linked to the exercise of the options, according to spokesperson Kate Brennan.
“We have had equity grant agreements with Sony and Paramount, but no other studios,” Brennan said in an email.
By comparison, 20th Century Fox Home Entertainment, Warner Home Video and Universal Pictures Home Entertainment initially refused to license movies on street date to Redbox, which resulted in litigation and ultimately agreements that mandated 28-day delays on the studios’ new releases to the kiosk vendor.