The Irishman Distributor May Take Legal Action Over Netflix Deal

Martin Scorsese on the set of Silence

The last few years have seen Netflix engaging in a sort of coup against the traditions of the Hollywood establishment. After changing the way home viewers watch movies, spearheading the demise of the movie rental stores that boomed in the '90s, Netflix began a systematic campaign of original releases, both financing original works and stealing big named movies out from under the noses of big named distributors; making the steaming service a formidable force in the changing structure of the movie business.

Their latest, most remarkable volley against Hollywood structures came with the acquisition of Martin Scorsese’s (Silence) next project, The Irishman. Earlier this week it was announced that Netflix had acquired the worldwide distribution rights to the director’s next mafia film, which reunites the legend with Robert De Niro (The Comedian) and his Goodfellas/Casino co-star Joe Pesci. The blow was massive. Landing a Scorsese film is an existential threat to the way Hollywood does business, leading many to wonder if we weren’t seeing the official beginning of the end of the way movies are distributed to the masses. Now, it seems as though the fight may not be over.

Variety is reporting that a new lawsuit may be pending over the distribution rights for The Irishman. STX bought the non-U.S. distribution rights last year at Cannes, inking a $50 million deal that now casts some doubt on the deal. STX had already sold distribution to several companies worldwide, many of whom are understandably frustrated and concerned by the Netflix deal.

It’s a complicated issue, but it sheds light on how movies are traditionally bought and sold in the international market. Typically, a company will buy the rights to the film and then sell them to other distributors in foreign markets, who in turn sell the film to individual theaters creating a chain of profit (hopefully) for all involved. STX had already sold the distribution rights to several foreign distributors, leaving many understandably frustrated and confused by Netflix’s global distribution deal. Olivier Van den Broeck from The Searchers, a distribution house from Belgium, said:

“We have a legally binding and fully executed contract re all exclusive rights in Benelux for The Irishman. The chain of title as of today allows to my knowledge no opening for Netflix to even negotiate international rights with these deals in place.”

Other international distributors expressed similar sentiments, fueling the rumors of an impending lawsuit by STX - which released only a brief comment on the matter:

“As a policy, STX does not comment on rumors or matters related to litigation.”

Netflix has yet to comment on the matter, but the confusion throws a possible wrench in Netflix’s cinematic coup and could lead to trouble for producer Gaston Pavlovich, who inked the new deal as the budget for The Irishman rose from $100 million to $125 million. What this all means is uncertain as of yet, but it’ll be interesting to watch how this all plays out.

Martin Scorsese and Robert De Niro making Casino
Martin Scorsese and Robert De Niro making Casino

Without knowing the specifics of the Netflix deal, it’s hard to know how they plan to work around the previously-inked contract or if the intention was to buy STX out as part of the deal. This would of course have a ripple effect and be complicated by the fact that multiple international distributors have already paid for the rights to the film. The easiest way would be for the distributors to sell the rights back to STX who would, in turn, sell the rights to Netflix.

This wouldn’t be the first time a deal like this was struck in regards to The Irishman. Paramount had previously owned the U.S. distribution rights to the movie but sold them back to Pavlovich prior to his deal with Netflix. How feasible that is at this point is up in the air.

The most likely outcome could be a joint distribution effort between Netflix and STX, with Netflix paying for the rights to distribute in countries where STX had yet to make a deal, while the previously-made contracts are still honored. But lawsuits are never easy, especially when big money is involved. What was so remarkable about the Netflix deal in the first place was the fact that The Irishman stood to be a big earner at the box office.

This all serves as a reminder that behind the scenes of your favorite movies are the machinations of business and industry. As much as we like to view films as art, movies and movie making are big business with big money and the complications that arise can often be difficult to untangle. Even if Netflix and other streaming services successfully topple the Hollywood system as we know it, it’ll be a case of the more things change the more they stay the same. Business is still business, and no amount of evolution can ever change that.

NEXT: What Netflix's Acquisition of The Irishman Means for Hollywood

Source: Variety

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