Disney has been accused by TSG Entertainment, a long-time financing partner of its 20th Century Fox Studio, of withholding profits. TSG filed a suit on August 15 in Los Angeles Superior Court, alleging that Disney and 20th Century Fox committed a number of transgressions, including withholding profits and cutting deals to boost Disney’s own streaming platforms and stock price, thereby depriving TSG of its share of profits. TSG said, this also came in the say of its investment in more films and its efforts to sell its stakes in other films.
TSG co-finances the production and marketing costs of films in exchange for a share of the defined gross receipts after the film’s release. In all, it has co-financed around 140 films produced by 20th Century Fox which Disney acquired in 2019. Avatar: The Way Of Water was also co-produced by TSG.
The financier noticed a decline in profits and requested an audit of a sampling of three films financed by it. It alleged that it found “rampant self-dealing” and “accounting tricks” within the books and that it had been underpaid by around $40 million.
The suit says, “At its root, it is a chilling example of how two Hollywood behemoths with a long and shameful history of Hollywood Accounting, defendants Fox and Disney, have tried to use nearly every trick in the Hollywood Accounting playbook to deprive plaintiff TSG — the financier who, in good faith, invested more than $3.3 billion with them — out of hundreds of millions of dollars.”