Criterion and StudioCanal

[Jeff]

Without seeing the actual contract, what either party can and cannot do is pure speculation. We do know, however, that SC can unilaterally breach the agreement if they choose to.

We do? How do we know that? If, for some bizarre reason, a multibillion dollar corporation like Canal+ randomly decided to breach a contract they signed just so that Criterion could release some awesome movies, wouldn't Lionsgate immediately sue StudioCanal and request an injunction against any Criterion release?

Of course we don't know the language of the contract at all, but it is possible to use reasonable judgment regarding what an exclusive distribution agreement does and does not consist of.

[zeroman987]

Without seeing the actual contract, what either party can and cannot do is pure speculation. We do know, however, that SC can unilaterally breach the agreement if they choose to.

We do? How do we know that? If, for some bizarre reason, a multibillion dollar corporation like Canal+ randomly decided to breach a contract they signed just so that Criterion could release some awesome movies, wouldn't Lionsgate immediately sue StudioCanal and request an injunction against any Criterion release?

Of course we don't know the language of the contract at all, but it is possible to use reasonable judgment regarding what an exclusive distribution agreement does and does not consist of.

I am not an expert on licensing agreements, but I know a little bit about contracts. In general, breach is not a "bad" thing and most of the time, parties can unilaterally breach a contract - some exceptions apply, like real estate contracts or contracts for unique goods (and this might qualify, like I said I am not an expert). Still, typically, the other party just has a right to damages (lost profits, money spent in reliance, etc.) An injunction, on the other hand, is an extraordinary remedy which is only given when there are no adequate remedies at law. Courts are reluctant to award an injunction, especially for personal service contracts (there is a 13th Amendment issue there). Essentially, Lionsgate would have to show that money damages would be insufficient to repair any loss they have suffered. I am not sure a court would give Lionsgate an injunction.

I think that there would be a damages number which would put them in the same place if the contract were performed. In this case, I bet there is a liquidated damages clause because future profits are sufficiently difficult to predict. Further, I am not sure Lionsgate would even want an injunction. If Lionsgate is not putting out these films, it is probably because it is not profitable for them. I mean, does Lionsgate really want to put out Jour Se Leve or the Carlos Saura movies? Only one of the Saura films is in print in region 1 or 2 right now (Carmen has a release from Studio Canal in GB), if there was a market for those movies, Lionsgate would release them. Lionsgate would probably want money damages and call it a day.

However, despite that, Studio Canal would probably never try to breach the contract because the cost of litigation and the damages would be enough of a deterrent. However, if Studio Canal has good lawyers, there is probably a clause in there that gives them some sort of rights if Lionsgate is just sitting on their films (i.e. you get to release the Third Man but you gotta release Gervaise and the Bunels). Then again, a clause like that costs money and maybe they didn't think it was worth it.

[wattsup32]

I am not an expert on licensing agreements, but I know a little bit about contracts. In general, breach is not a "bad" thing and most of the time, parties can unilaterally breach a contract - some exceptions apply, like real estate contracts or contracts for unique goods (and this might qualify, like I said I am not an expert). Still, typically, the other party just has a right to damages (lost profits, money spent in reliance, etc.) An injunction, on the other hand, is an extraordinary remedy which is only given when there are no adequate remedies at law. Courts are reluctant to award an injunction, especially for personal service contracts (there is a 13th Amendment issue there). Essentially, Lionsgate would have to show that money damages would be insufficient to repair any loss they have suffered. I am not sure a court would give Lionsgate an injunction.

I think that there would be a damages number which would put them in the same place if the contract were performed. In this case, I bet there is a liquidated damages clause because future profits are sufficiently difficult to predict. Further, I am not sure Lionsgate would even want an injunction. If Lionsgate is not putting out these films, it is probably because it is not profitable for them. I mean, does Lionsgate really want to put out Jour Se Leve or the Carlos Saura movies? Only one of the Saura films is in print in region 1 or 2 right now (Carmen has a release from Studio Canal in GB), if there was a market for those movies, Lionsgate would release them. Lionsgate would probably want money damages and call it a day.

However, despite that, Studio Canal would probably never try to breach the contract because the cost of litigation and the damages would be enough of a deterrent. However, if Studio Canal has good lawyers, there is probably a clause in there that gives them some sort of rights if Lionsgate is just sitting on their films (i.e. you get to release the Third Man but you gotta release Gervaise and the Bunels). Then again, a clause like that costs money and maybe they didn't think it was worth it.

Very well said. This is spot on. Efficient breach is the term to describe breach not being a bad thing. In fact, at times breach is preferable to at least one party and when it is, it is usually preferred by the court, too. There is no chance an injunction would happen. Damage award would be the only option, and for films LG is just sitting on, that number would be lower than James Earl Jones' voice. There are lots of other complicating factors, and really, I'm probably just clogging the board with this, so I'll stop. But, it is important to get the law right if we're going to start talking about "binding contracts" and the law that governs them.

[Tom Hagen]

I love that this thread somehow turned into a 1L contracts final.

[Tribe]

I am not an expert on licensing agreements, but I know a little bit about contracts. In general, breach is not a "bad" thing and most of the time, parties can unilaterally breach a contract - some exceptions apply, like real estate contracts or contracts for unique goods (and this might qualify, like I said I am not an expert). Still, typically, the other party just has a right to damages (lost profits, money spent in reliance, etc.) An injunction, on the other hand, is an extraordinary remedy which is only given when there are no adequate remedies at law. Courts are reluctant to award an injunction, especially for personal service contracts (there is a 13th Amendment issue there). Essentially, Lionsgate would have to show that money damages would be insufficient to repair any loss they have suffered. I am not sure a court would give Lionsgate an injunction.

This isn't a personal services contract by any means. While the test for an award of injunctive relief can be high, particularly when it is sought as temporary or preliminary, an injunction is readily available in the form of an order requiring specific performance. It's misleading to intimate that parties can breach contracts unilaterally...as if that is something that is encouraged.

[Tribe]

There is no chance an injunction would happen. Damage award would be the only option

This is utter nonsense. #-o

[Brian C]

This is utter nonsense. #-o

Hell, he's convinced me! Criterion should just release whatever they want, whether they have the rights or not! What's the worst that can happen?

[wattsup32]

I love that this thread somehow turned into a 1L contracts final.

True enough. This is my fault. Though, at least a couple of the posters would be be setting the bottom of the curve on the final.

[Jeff]

I love it! Poke at the woodpile and the lawyers and law students all scurry out. Thanks for the lesson, counselors. Seriously. It seems, however, that even amongst the four (?) of you, there is not complete agreement here. I have no legal education or background whatsoever. Just discerning what I think an "exclusive distribution agreement" means in practical terms. Can we at least all agree that the notion that StudioCanal is going to suddenly decide to breach their contract so that Criterion can release a Blu-ray of Gervaise or whatever would be an extraordinary measure and is a pretty silly fantasy for the Facebook crew to harbor and bandy about as a rumor of something that might be happening?

at least a couple of the posters would be be setting the bottom of the curve on the final.

I certainly resemble that remark, but it's a fair bet that Tribe is the senior attorney on the forum, so I'm not ready to dismiss his dismissal.

[wattsup32]

Just using common sense about what I think an "exclusive distribution agreement" means in practical terms.

it's a fair bet that Tribe is the senior attorney on the forum, so I'm not ready to dismiss his dismissal.

We all want this to be true, but the law rarely conforms to common sense. That's good for those of us in the profession because, if it did, we would be out of job.

I encourage 15 seconds worth of googling to confirm for yourself that asking for specific performance on a contract like this would get LG laughed out of the courtroom by the judge.

[rrenault]

All I'll say is that I think Studio Canal entered in on this deal, assuming they would create their own boutique DVD/blu ray line, titled the Studio Canal Collection, which they expected Lionsgate to unconditionally distribute in the United States. A few questions need to be answered. Why hasn't Studio Canal added any titles, even if only on Region B in nearly a year, and why has Lionsgate only distributed three of them in the United States? This is just a guess, but I'm assuming SC expected LG to release many of their more obscure catalog titles on a boutique line that would compete with Criterion, but Lionsgate appears to be reluctant to do this.

But even so, if there is in fact a unilateral contract that can't be legally breached, that's the way it is, and nobody can do anything about it, in spite of wish fulfillment. For example, if two parties have a futures deal, and the seller decides to one day before the deal closes unilaterally raise the price, don't you think the buyer could take the seller to court and have a legitimate case? Of course, there's also the possibility LG hasn't gotten around to releasing a lot of films yet. If they released Godard's Prenom: Carmen then I can't imagine they'd have a reason to be averse to releasing Grand Illusion or Discreet Charm of the Bourgeoisie. Alas, perhaps they simply haven't gotten around to it yet.

[Jeff]

Studios abandon "collections," which are just marketing gimmicks, all the time. Lionsgate got about three or four titles into their previous stab at Criterionism, "The Meridian Collection" before they called it quits. Paramount abruptly dumped "The Centennial Collection" after ten films ("The Decennial Collection?"). When's the last time we heard from Warner's "International Cinema Collection" or Sony's "Martini Movies" or Universal's "Legacy Series?" They lose interest, are disappointed by sales figures, or move on to something else. In this case, I think it likely has to do with the crummy state of the home video market in general.

The StudioCanal Collection seems to have been abandoned by SC themselves, not Lionsgate, so I doubt that licensing arrangement is to blame. StudioCanal simply does not have the U.S. rights to most of the StudioCanal collection titles that were released in other markets. In fact, the only title that was released in the rest of the world, but not the U.S. that they currently have the U.S. rights to is Pierrot le fou. I suspect that with the Criterion version still widely available, it wasn't worth it. They'll eventually get back the rights to Le cercle rouge and Last Year at Marienbad too, but I imagine they won't bother with those either since Criterion will have had plenty of time to flood the market.

The fact that StudioCanal released Peeping Tom without any kind of branding and Don't Look Now under a "Vintage Classics" banner seems to indicate that they've just moved on. The September release of Plein Soleil was originally announced as a StudioCanal Collection title, but early looks at the packaging indicated they've dropped the branding.

Of course it doesn't help anything that Lionsgate acquires more films than they know what to do with (ahem, Republic library), and seems to get distracted by any shiny object on the market. Right now they're focused on Miramax (another joint venture with StudioCanal).

[rrenault]

I've always been curious about Breathless, since it would appear from looking at the Criterion packaging Canal doesn't have the US rights to the film, but the SC Collection release is Region A compatible, even if it's not officially distributed in the US.

[knives]

The ultimate rights holder of any territory gets to choose the region coding so if SC wanted to do more than one region for a film in which they held ultimate right they could.

[TMDaines]

whatever, let's drop the discussion. To the others, you're right, I probably shouldn't have gotten tied up in a meaningless discussion, along with dwelling on DVD rights issues, in other words, things that aren't worth stressing yourself over. It's all compulsive behavior on my part and perhaps some wishful thinking, but in turn, I think it's just as ridiculous to anger yourself, stress out, and lash out over a measly little post that annoyed you on an internet forum. So there, all I can say is two wrongs don't make a right. I'm willing to make a truce. Take it or leave it.

People get annoyed when others keep posting endless hopeful speculation with zero substance. It's kind of in the rules of the forum to not to do this to stop this turning into the Criterion Facebook page: Signal-to-noise ratio and all.

[Jeff]

Lionsgate has renewed their long-term licensing arrangement with StudioCanal, so fantasies about Canal ending the agreement out of spite or something have been effectively squelched.

[captveg]

Lionsgate has renewed their long-term licensing arrangement with StudioCanal, so fantasies about Canal ending the agreement out of spite or something have been effectively squelched.

Frankly, SC simply needs to release titles that Lionsgate can actually also release in the US. I used to think that Lionsgate just didn't care to release any of the same films Europe was getting, but then I did the comparison and, sure enough, SC was releasing titles that LG couldn't.

[Michael Kerpan]

It surprising that SC believes that it can get more money from Lionsgate (which seems totally uninterested in making use of virtually all of the films it licenses) than it could get from licensing films to companies that _would_ actually make the films available (and market them).

[captveg]

It surprising that SC believes that it can get more money from Lionsgate (which seems totally uninterested in making use of virtually all of the films it licenses) than it could get from licensing films to companies that _would_ actually make the films available (and market them).

Well, at least when it comes to SCC, Lionsgate has a good track record, which - like I said above - looked the opposite before I really examined it.

SC has released the following in Europe, but only the italicized titles are ones with LG having US rights:

3 Days of the Condor (US: Paramount; BD available)
Belle de jour (US: Criterion; BD available)
Breathless (US: Criterion; BD available)
Le cercle rouge (US: Criterion; BD available)
Contempt
The Deer Hunter (US: Universal; BD available)
Delicatessen
The Elephant Man (US: Paramount; no BD yet)
The Go-Getween (US: Sony; no BD yet)
The Graduate (US: MGM; BD available)
Le grande illusion
The Ladykillers (1956)
Last Year at Marienbad (US: Criterion; BD available)
The Lost Honor of Katharina Blum (US: Criterion; no BD yet)
Mulholland Drive (US: Universal; no BD yet)
The Pianist (US: Universal; no BD yet)
Pierrot le fou (was released by Criterion but is now OOP; this is the only LG capable title that is not scheduled)
Ran
Senso (US: Criterion; BD available)
The Third Man
To Be or Not to Be (1942) (US: Criterion; no BD yet)

[peerpee]

Haven't seen this mentioned elsewhere? But StudioCanal have taken all rights to all Tati films outside of France, so it looks like Criterion and the BFI will lose everything shortly?

[The Narrator Returns]

My reaction

[Jeff]

Haven't seen this mentioned elsewhere? But StudioCanal have taken all rights to all Tati films outside of France, so it looks like Criterion and the BFI will lose everything shortly?

Sonofabitch! That explains why Criterion never got around to doing an upgrade of M. Hulot's Holiday long after their theatrical release of the restoration.

[mfunk9786]

Clutching my Playtime Blu-ray tight

[Jean-Luc Garbo]

Yeah, I saw Playtime at B&N and thought, "I should finally buy this one."

[andyli]

That is good news to me. Maybe they can finally do a 4K (or even higher) scan on the 65mm elements and issue a superb edition. People satisfied with the original releases can hold on to them anyway.