Sources tell The Hollywood Reporter that the NBCUniversal-owned studio has filed a confidential arbitration claim against the Paramount chairman and CEO for failing to honor a 50-50 profit-sharing arrangement on the hit HBO series. Grey, who was a principal at the Brillstein-Grey management/production company before taking the reins of Paramount, executive produced on the long-running mob drama and is believed to have earned tens of millions of dollars from its success.
Universal in 1996 bought half of Brillstein-Grey, but divested its interest in the company in 1999. At the time, sources say the studio and Grey entered into a separation agreement that divvied up rights to several TV projects in development. Sopranos was one of those projects, and Universal is arguing that the separation agreement entitles it to split Grey’s profits from the show.
Grey is said to have been paid $50 million or more in revenue from HBO, which could entitle Universal to $25 million or more if it is successful in the arbitration. The claim was filed in December, according to sources.
The dispute is a holdover from Grey’s pre-Paramount life as a top manager and producer. Still, it’s extremely rare for a top Hollywood executive to be targeted in such a way by a rival studio. Making matters more noteworthy, Grey and Universal COO Ron Meyer are said to be close friends.
Reps for Grey and Universal declined to comment.
Sopranos debuted on HBO in 1999 and became the biggest hit in the network’s history. The show ran for six seasons and sold extremely well on DVD. HBO is not a plaintiff or defendant in the arbitration.
The legal dispute had been brewing for some time, but Universal escalated the fight in December, hiring litigator Daniel Petrocelli at O’Melveny & Myers to initiate the arbitration proceeding. Grey has hired Evan Chesler at the white-shoe New York law firm Cravath Swaine & Moore to handle the case.
Kim Masters contributed to this report.