Netflix, studio end spat

Relativity Media and Netflix have settled their licensing fee dispute — paving the way for the Ryan Kavanaugh-created studio to emerge from Chapter 11.

Under the settlement, hammered out in Manhattan Bankruptcy Court on Thursday, Netflix will pay the bankrupt studio $7.2 million — primarily to cover the previously disputed licensing fees.

In addition, Netflix agreed to transfer its Relativity licensing deal to UltraV Holdings, which is buying the studio out of Chapter 11. UltraV has pledged to invest $40 million in the studio.

“The settlement helps preserve the value of the Relativity estate for creditors,” said Colin Adams, Relativity’s chief restructuring officer. “We look forward to closing the sale to UltraV and winding down the Relativity estate.”

In 2010, as a fledgling overthe-top movie distributor, Netflix inked a deal very favorable to Relativity to stream its films. During Relativity’s first court-supervised restructuring, a much more powerful Netflix tried to dismiss the deal, claiming it had been voided when the cashstrapped studio failed to deliver the promised films.

Relativity objected and prevailed — only to see Netflix try to toss the deal again after five of the studio’s films were streamed first by rival companies.

On Thursday, Bankruptcy Court Judge Michael Wiles turned aside the latest Netflix effort, saying the streaming giant failed to prove it suffered damages. Netflix is not entitled to a refund for having been denied exclusive access, the judge ruled.

The sale to UltraV is scheduled for Aug. 8.