Leg­endary is prepar­ing legal action over Warn­er Bros’ HBO Max gambit

For those of us who enjoy keep­ing abreast of major devel­op­ments in the enter­tain­ment indus­try, it’s been an event­ful week. Warn­er Bros. made a great com­mo­tion when they announced that they would do away with the­atri­cal exclu­siv­i­ty for their slate of 2021 releas­es, instead drop­ping every­thing from Godzil­la Vs Kong to The Matrix 4 to Dune to In the Heights direct­ly on to their stream­ing chan­nel HBO Max at the same time that it goes to brick-and-mor­tar movie hous­es. A great many peo­ple and cor­po­rate enti­ties were not pleased about this.

Per­haps the most dis­pleased of all would be the exec­u­tives at Leg­endary, the movie stu­dio respon­si­ble for pro­duc­ing Dune and Godzil­la Vs Kong, a pair of tent­poles on which the finan­cial future of the com­pa­ny hangs. In fact, a report in Dead­line has let slip the news that Leg­endary has pre­pared legal let­ters urg­ing Warn­er Bros to exclude their films from this new busi­ness mod­el. Ten­sions are a‑flaring.

The report includes the eye­brow-rais­ing rev­e­la­tion that Legendary’s man­age­ment only found out the two biggest earn­ers on their would be shuf­fled onto HBO Max a half-hour pri­or to the pub­lic announce­ment, leav­ing them no time to react or pre­empt the deci­sion. More­over, it’s come out that Net­flix offered $250 mil­lion to take Godzil­la Vs Kong off of Warn­er Bros’ hands, and Warn­er over­lords blocked it. WB’s goal seems to be to keep Leg­endary in the dark for as long as pos­si­ble while they undo the terms of con­tracts man­dat­ing a the­atri­cal run.

It all paints an unflat­ter­ing pic­ture of a con­glom­er­ate will­ing to pass up pos­si­ble box-office pay­days down the road for an imme­di­ate bump in sub­scrip­tions to their strug­gling stream­ing enter­prise, a con­cern about which Leg­endary couldn’t care less. The stu­dio ponied up 75 per cent of Dune’s esti­mate $165 mil­lion bud­get, a com­pa­ra­ble sum for Godzil­la Vs Kong, and they’d like to see some return on invest­ment. With a direct-to-stream­ing deal, how much com­pen­sa­tion they’d be owed upfront by Warn­er Bros. is unclear, but the real fear is that going online would dimin­ish the earn­ing poten­tial for future sequel installments.

More fric­tion like this can be expect­ed as Hol­ly­wood, long under­stood to be a busi­ness with its own laws of physics, gets devoured by the tech sec­tor. This stream­ing gam­bit comes from the top down, with AT&T exec­u­tives using their assets in Warn­er Bros to goose the entire cor­po­ra­tion at the pos­si­ble cost of destroy­ing moviego­ing as we know it. Leg­endary won’t go down with­out a fight, how­ev­er, and they’re sure to have lots of allies in this par­tic­u­lar war.