The producer of the 2010 drama “Middle Men” claims that Paramount Pictures breached an agreement to properly promote and distribute the movie, and instead used it as part of a library of films to sell to top streaming services.
The lawsuit, filed by Middle Pictures on Wednesday in Los Angeles Superior Court, also claims that Paramount failed to pay or account for profits from the movie. The lawsuit claims that the studio reaped hundreds of millions of dollars in revenue from a Netflix deal for its library, but that Middle Pictures has seen little of it.
The movie, starring Luke Wilson, Giovanni Ribisi, and James Caan, is the story of the development of online credit card billing services and the birth of Internet porn. Middle Pictures’ Christopher Mallick produced and George Gallo directed. It collected less than $1 million at the domestic box office.
In the lawsuit, Middle Pictures said that the movie cost $21.5 million to produce, and it paid Paramount an additional $6.8 million to promote its release. Paramount had no financial investment in the movie, according to the lawsuit, and made “little effort” to assure its box office success. Paramount limited the movie’s release to a scant number of screens, “thereby causing it to fail at the box office and then suffer the consequential effects on subsequent revenues.”
The suit claims that the distribution was part of Paramount’s “broader strategy to freely acquire valuable content that it could later use to create packaged libraries for sale to video-on-demand and streaming services such as Netflix, Hulu, and Amazon Prime.”
The lawsuit contends that Paramount failed to properly account for the way it spent the $6.8 million meant for promotion and advertising, as well as the money it has received in aftermarkets. It says that Paramount owes at least $7 million from “new media” revenues. The suit makes a series of claims, including breach of contract, fraudulent inducement, and accounting.
Another claim is that Paramount engaged in self-dealing by licensing the movie at a discounted price to Epix, in which it has a 43% ownership stake.
The lawsuit was filed by Jeffrey Simon of Simon Greenstone Panatier Bartlett in Dallas.
A spokeswoman for Paramount did not immediately respond to a request for comment.
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