The Directors Guild of America sued MGM on Friday for undervaluing and undercutting the union in favor of a “sweetheart deal” with its streaming service MGM+ (formerly Epix).
According to court documents obtained by TheWrap, MGM is accused of beginning a below-market licensing agreement with Epix, now known as MGM+. The deal reportedly gave MGM the ability to report lower revenue numbers to the DGA to avoid paying the full pension rate.
“By entering into this sweetheart distribution license arrangement with Epix, MGM was able to report artificially low license revenue to the Directors Guild of America (‘DGA’), the union representing employees responsible for creating MGM’s movies and television shows, as well as to the Plaintiff Directors Guild of America – Producer Basic Pension Plan (‘Pension Plan’), the benefit fund responsible for providing the DGA-represented employees their pension benefits, and as to which MGM has pension contribution obligations as a participating employer,” the suit claims.
“The Pension Plan only learned that MGM had used its self-dealing arrangement with Epix to shirk its pension contributions years after the Pension Plan received MGM’s understated contributions, and the Pension Plan still has not received information that would reveal the full scope of the underpayments.”
The DGA further accuses MGM of intentionally licensing its own films at a lower rate to Epix, a relationship that could exist because the two companies are not separate from one another. Epix then allegedly sublicensed movies and shows to other streamers like Netflix and Paramount+ and failed to report that revenue to the DGA.
The DGA attempted to conduct audits of MGM’s pension contributions from April 2010 to September 2013, October 2013 to September 2017, and October 2017 to June 2022, and further alleges MGM failed to provide requested records.
In February 2026, audit firm Nigro Karlin Segal & Feldstein LLP (NKSF) also allegedly found MGM failed to report another $540,426 in potential pension contributions.
The DGA has requested MGM be ordered to award unpaid pension contributions (the exact dollar amount cannot be calculated until records are supplied) as well as attorney’s fees and interest.
Representatives for MGM did not respond to TheWrap’s request for comment.
