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Lionsgate Seeks Blockbuster Rev-Share Revenue

25 Apr, 2011 By: Erik Gruenwedel

Lionsgate is seeking payment from Dish Network for outstanding revenue-sharing agreements with Blockbuster Inc. involving dozens of DVD and Blu-ray Disc titles.

In the April 25 motion filed with U.S. Bankruptcy Court in New York, Lionsgate said Dish April 22 notified the Santa Monica, Calif.-based mini-major it would not honor any outstanding rev-share agreements, and that it had the right to sell all inventory as it saw fit.

Englewood, Colo.-based Dish April 6 acquired Dallas-based Blockbuster for $320 million.

Specifically, Lionsgate’s agreement with Blockbuster mandated revenue-payment up 28 weeks after a title shipped. Blockbuster had the right to continue renting and/or sell or destroy the discs (with box office above $15 million) thereafter.

“LGF respectfully requests that the court order [Blockbuster] and Dish to honor the remaining revenue share obligations under those agreements, or determine that the films in question were not subject to transfer where the revenue share period had not expired at the time of the default and termination of the post-petition agreements between LGF and the Debtors,” Lionsgate wrote in the motion.

Titles in question include DVD and Blu-ray releases since Oct. 25, 2010. They include: The Way Home, Winters Bone, Locked Down, Amor Dolor Y Viceversa, The Expendables, Madea’s Big Happy Family, The Winning Season, Frenemy, The Heavy, Legendary Assassin, Lena Baker Story, The Last Exorcism, Alpha & Omega, Buried, Triggerman, Saw: The Final Chapter, H1N1-Virus X, For Colored Girls, The Gunslingers, Crimenes de Lujuria, Shaun the Sheep: Spring Shenanigans, “Weeds,” Psych 9, Sword of War and “Nurse Jackie.”  

Lionsgate stopped shipping new releases to Blockbuster Jan. 24.

Dish April 21 filed a motion seeking an extension on closing the acquisition. It also wants to prolong by 90 days the time it must decide whether to assume or reject leases of more than 1,100 stores. It separately filed motions to continue operations in about 575 Blockbuster stores.

About the Author: Erik Gruenwedel

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