Netflix sues Relativity over breach of exclusivity deal

LOS ANGELES: Netflix has sued Relativity Media accusing the bankrupt mini-studio of violating an exclusivity agreement by providing five films to Amazon and Starz.

The streaming service also accuses Relativity of failing to provide the required number of releases for 2017.

Netflix is seeking $12.6 million in damages for the exclusivity violations, plus $5 million for each film Relativity failed to deliver, variety.com reported on Friday.

Relativity declared bankruptcy last month for the second time in three years, as it seeks a court-approved sale to UltraV Holdings.

Relativity continues to have an output agreement with Netflix, first signed in 2010, which it considers to be "one of the crown jewel assets of the estate", according to the filing.

Under the deal, Relativity was originally supposed to provide 15 titles to Netflix in 2017.

Following its first bankruptcy, the company revised that total, offering to provide 22 films from 2016 through 2018, including eight in 2017.

In fact, Relativity delivered just three titles in 2017, according to the complaint.

Netflix also alleges that it paid licensing fees for exclusive rights to "The Lazarus Effect", "The Woman in Black 2" and "Beyond the Lights," each of which subsequently appeared on Amazon's streaming service.

According to the complaint, Relativity lost control of the titles when Macquarie US Trading LLC foreclosed on them, and the films were then offered to rival distributors.

Netflix also alleges that "Hector and the Search for Happiness" and "And So It Goes" were licensed to Starz during Netflix's exclusivity period.