Oh, man – this couldn’t happen to a nicer bunch of low-lifes.

Hollywood financer TSG Entertainment is suing Disney for breach of contract.

The suit filed Tuesday in Los Angeles Superior Court alleges that Disney and its studio 20th Century Fox committed a number of transgressions, including withholding profits and cutting deals to boost its streaming platforms and stock price. This act deprived TSG of cash to invest in individual films and its efforts to sell its stakes in other movies, the lawsuit says.

Just last month I posted about how Disney was trying to offload ESPN – or work a deal with one of the leagues, either NBA or NFL – and the fact that their streaming services were bleeding cash and customers now that their period for affiliate payments had expired.

All this is coming about because Disney has so thoroughly destroyed Disney and the singular, beloved place the company held for decades in the American psyche. A once enthusiastic public is rejecting the company’s pricey offerings at a record clip.

…Until last quarter, Disney’s bundle of linear TV networks still had revenue growth because affiliate fee increases to pay-TV providers — largely driven by ESPN — made up for the millions of Americans who cancel cable each year. That trend finally ended last quarter, according to people familiar with the matter. Accelerating cancellations have now overwhelmed fee increases, and linear TV revenue outside of advertising has begun to decline.

They’ve faced one woke disaster after another at the box office, and now have one more staring them in the face. I mean, already no one can stand the smug star of the “Snow White” remake a year before it hits the screen.

Why hasn’t Disney told her to stuff a sock in it?

Disney is trying a really interesting marketing strategy where the star of the new Snow White spends a year before the movie’s release publicly talking about how much she despises Snow White

pic.twitter.com/DlQCUqbqnQ

— Matt Walsh (@MattWalshBlog) August 13, 2023

They seem hell bent on blowing up the brand.

And as they’re already running short of cash on hand, it doesn’t make much sense to keep shooting yourself with the same woke bullet in the foot.

Today, accusations are some of the cash buying the bullets didn’t belong to them to begin with. They were firing woke on other people’s dimes. Not only not sharing what was rightfully the other company’s, but doing some financial magic wand waving to gin up monies owed that weren’t. For just the 3 films they’d had audited, TSG found out Disney had underpaid them by $40M.

That’s some cha-ching.

…Noticing a decline in profits, TSG requested an audit of a sampling of three of the films it financed for 20th Century Fox. TSG alleges that it found “rampant self-dealing” and “accounting tricks” within the books and had been underpaid by at least $40 million.

“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,” the suit says.

In one alleged incident, TSG said Fox licensed “The Shape of Water,” which won best picture at the 2018 Academy Awards, to FX, a channel owned by the studio, for $4 million less than it should have under its output agreement.

Additionally, TSG said through its audit that it found it had not been credited with revenue it should have received and was charged millions of dollars for distribution fees that weren’t part of its revenue-participation agreement with the studio.

TSG has helped co-finance 140 films with Disney’s 20th Century Fox – that a whale of an extrapolation if that rate of bookkeeping shenanigans holds up.

TSG is also asserting that because of the reduced inflow from Disney projects, they didn’t have the liquidity to invest as much as they would normally have in projects like the “Avatar” sequel. The lack of assets had its own set of consequences for their company.

…“The consequence was that TSG’s share of defined gross receipts was dramatically reduced, further eroding TSG’s ability to generate liquidity for future productions, and frustrating TSG’s ability to realize the benefit of its agreement with Fox,” the suit alleged. “Most egregiously, this scheme triggered a provision in the [revenue participation agreement] that entitles Fox to a 50% share of TSG’s profits after the winding-up of TSG’s investment vehicle.”

You read the bolded part right – Disney’s alleged withholding of TSG’s true profits triggered a minimum threshold agreement that allowed Disney to take 50% of TSG’s profits after the investment was settled!

HOW BRILLIANTLY FIENDISH

It’s almost like a movie plot.

But Stephen Frey. Not “Snow White.”