10:13am PT by Eriq Gardner
Jillian Michaels Makes $10 Million Legal Claim Over Lionsgate's YouTube Channel
Biggest Loser star trainer Jillian Michaels has filed an arbitration claim against Lionsgate over fitness videos uploaded to the studio's BeFit channel on YouTube.
The dispute with at least $10 million in alleged damages is a remarkably novel one thanks to a production and distribution agreement between Lionsgate and Michaels. The 2007 deal provides escalating royalties for Michaels depending on how many exercise videos are distributed in the market, but according to Michaels' arbitration petition, videos uploaded to YouTube have "cannibalized sales" via free streaming.
According to her filing, Lionsgate is believed to have been given $5 million from YouTube to start the fitness channel in 2012 — and to date, it has amassed nearly 350 million views and 2.6 million subscribers. Michaels says her videos for Lionsgate make up nearly half of the views.
Biggest Loser has been a huge success over 16 seasons on NBC, but it's not only the network that has benefited. Ancillary products in the weight loss product segment are naturally quite popular as well, and Michaels has used her reality TV fame to move bucket loads of fitness instructional products.
Lionsgate and Michaels previously engaged in a dispute with each other arising from an audit, according to the arbitration filing. In July 2014, the parties entered into a settlement agreement, but Michaels believes that the latest claim isn't subject to that deal.
Meanwhile, Michaels has a new line of fitness videos, according to her arbitration papers, Lionsgate is allegedly harming her two-fold by "(1) destroying the market for Ms. Michaels' Lions Gate videos for which she is entitled to a royalty for each consumer sale of a 'unit'; and (2) destroying the market for her separate Empowered Pictures videos not associated with the agreement."
The dispute looks to explore how contracts executed in one entertainment era transition to the next, as studios in the home entertainment space are figuring out revenue models in an on-demand environment. Michaels' deal specifically mentions a "pay-per-transaction" method of distribution; she got 10 percent of receipts for the first 150,000 units distributed, 12.5 percent for the next 150,000, and 15 percent for units distributed thereafter (along with "minimum guarantees") YouTube instead provides channels owners with an ad-share. Michaels says she has gotten no advertising money from Lionsgate's BeFit channel.
"There is no provision in the Agreement which grants Respondents the right to unilaterally distribute Ms. Michaels' full length Lions Gate Pictures without payment to Ms. Michaels, or, for that matter, the right to place Ms. Michaels' Lions Gate Pictures on services where the world can view them at no cost," states the filing by Richard Busch at King & Ballow, representing Michaels, J.M. Athletics and Empowered Media.
Further, Michaels alleges that Lionsgate has breached contract and the covenant of good faith and fair dealing by failing to consult with her as it allegedly was supposed to do.
Also claiming unfair competition, Michaels demands both compensation as well as an order directing Lionsgate to remove the videos from YouTube.
THR has reached out to Lionsgate for comment on the case.