Directors Guild of America Lawsuit Against MGM: Allegations of Underpayment in Fees and Pension Contributions
The MGM studio is facing a lawsuit from the Directors Guild of America and its pension fund over allegations of underpayment in fees and pension contributions related to a deal with major streaming services. The lawsuit claims that MGM, along with Paramount and Lionsgate, entered into a television service deal for Epix in 2008, which MGM later acquired and renamed MGM+ in 2023. The DGA alleges that MGM negotiated distribution deals for its content at artificially low rates and failed to account for substantial revenues generated from streaming and pay TV deals with services like Netflix, Hulu, Paramount+, and Amazon.
The lawsuit contends that MGM's distribution license arrangement resulted in inaccurate reporting of the revenue generated by movies and shows, which impacts the funds allocated to the DGA and its pension fund. The DGA is entitled to receive a percentage of the revenue generated from physical media and streaming, with a portion allocated to the pension fund and the rest to directors and other film contributors. The DGA and its pension fund are seeking a thorough examination of funds from 2010 onwards and are pursuing damages for the alleged underpayment.
In summary, the lawsuit filed by the Directors Guild of America and its pension fund against MGM highlights concerns over underpayment in fees and pension contributions resulting from distribution deals with major streaming services. The DGA is seeking a proper assessment of funds and damages for the alleged discrepancies in revenue reporting.