New York: TSG Entertainment, a prominent figure in film financing, has initiated legal action against Disney, alleging a breach of contract and contending that Disney’s actions prevented it from increasing its investment in ‘Avatar: The Way of Water’ and resulted in significant financial losses.
According to the Wall Street Journal, TSG Entertainment, known for its involvement in funding the ‘Deadpool’ franchise for Twentieth Century Fox, has filed a lawsuit against both the studio and its parent company, Disney, asserting that contractual obligations were violated.
In the legal complaint, TSG claims that individuals within Disney have employed various tactics commonly used in Hollywood accounting to retain funds that TSG believes are rightfully owed to them.
The lawsuit alleges that Disney withheld profits and orchestrated deals to enhance its streaming services and bolster its stock price.
TSG Entertainment has been a co-financier for roughly 140 films produced by 20th Century Fox, a studio acquired by Disney in 2019, which includes ‘Avatar: The Way of Water’.
Collectively, TSG has invested approximately $3.3 billion in the content produced by the studio since 2012.
The lawsuit emphasizes that fundamentally, it serves as a striking example of how two Hollywood giants with a history of controversial Hollywood Accounting practices, namely Fox and Disney, have utilized various strategies outlined in the Hollywood Accounting playbook to deprive TSG of hundreds of millions of dollars. TSG is portrayed as a financier that, in good faith, has invested more than $3.3 billion with these companies.
Disney has yet to issue a response to the lawsuit.
TSG’s allegations include being denied the ability to sell its stake in other films it had financially supported, either back to Disney or to a third party.
The outcome of this denial, as stated in the lawsuit, was a substantial reduction in TSG’s portion of defined gross receipts, further diminishing their capacity to generate resources for future productions, and hindering their ability to fully capitalize on their agreement with Fox.
