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‘Dune’ and ‘Godzilla vs Kong’ Producer Legendary Considers Lawsuit Against Warner Bros. Over HBO Max Deal

Numerous insiders said that WarnerMedia did not give them advance notice ahead of last week’s announcement

“Dune” and “Godzilla vs Kong” producer Legendary is considering its options, including legal ones, against Warner Bros. over last week’s seismic decision to send its movies to HBO Max at the same time they premiere in theatres, according to executives with knowledge of the situation.

Numerous insiders said that WarnerMedia did not give them advance notice ahead of last week’s announcement.

Legendary Entertainment, a subsidiary of China-based Wanda that provided 75% of the financing for Warner movies “Godzilla vs. Kong” (although insiders tell the wrap that Warner Bros. has cashflowed the entire production budget to date) and the upcoming Timothée Chalamet-led “Dune” reboot.

Warner believes it has the right to shift to streaming under its existing distribution agreement with Legendary, according to one insider, but most of the risk of the $165 million “Godzilla” movie lies with the producer, not the studio. And while WarnerMedia may be willing to forgo box office revenue to boost subscriptions in its seven-month-old HBO Max streaming service, Legendary doesn’t see any upside from that shift.

Certainly, the business model for building big-budget blockbuster franchises is being thrown into disarray. (On Warner’s 2021 slate, that includes “Godzilla vs. Kong,” LeBron James’ “Space Jam” reboot, DC Films’ “The Suicide Squad,” the sci-fi epic “Dune” and Lana Wachowski’s “Matrix 4.”) Those are the projects where backend deals for stars, directors and producers are most common — and where ticket sales generate a significant portion of the expected revenues and profits.

“The whole dealmaking process has to shift now because box office bonuses mean s–,” one producer said, wondering if cinema purists like Christopher Nolan (“Tenet”) will be as eager to continue working with Warner Bros. if it shifts away from theatrical releases beyond the circumstances of the pandemic.

“Godzilla vs Kong” is currently slated to be released on May 21, 2021. “Dune” is slated to open on Oct. 1.