Disney vs. YouTube. The fight for talent heads back to court
In the last several years YouTube has become an increasingly formidable competitor to streaming services and entertainment studios providing videos from amateur and professional creators as well as livestreaming major events and NFL games Now its growing threat to studios is headed to the courts The Google-owned platform in recent weeks poached Justin Connolly president of platform distribution from Walt Disney Co Last Wednesday Disney sued YouTube and Connolly for breach of contract alleging that Connolly violated an employment agreement that did not expire until March at the earliest Connolly oversaw Disney s distribution strategy and third-party media sales for its streaming services like Disney and its television networks He also was responsible for film and TV programs distribution through broadcasting and digital platforms subscription video services and pay networks As part of his role Connolly led Disney s negotiations for a licensing deal renewal with YouTube Disney disclosed in its lawsuit It would be extremely prejudicial to Disney for Connolly to breach the contract which he negotiated just a minimal months ago and switch teams when Disney is working on a new licensing deal with the company that is trying to poach him Disney announced in its lawsuit Disney is seeking a preliminary injunction against Connolly and YouTube to enforce its employment contract YouTube did not without delay respond to a request for comment At YouTube Connolly will be become the company s head of media and sports where he will be in charge of YouTube s relationships with media companies and its live sports portfolio according to Bloomberg YouTube accounted for of U S TV viewing in in March more than other streaming services like Netflix according to Nielsen YouTube s revenue last year was estimated to be billion making it the second-largest media company behind Walt Disney Co according to research firm MoffettNathanson Unlike plenty of other major streaming platforms YouTube has a mix of content made by users as well as professional studios giving it a diverse and large video library More than billion videos have been uploaded to its platform the company in the past few days mentioned There are over million videos uploaded daily on average Streaming services such as Netflix have brought certain YouTube content to their platforms including episodes of preschool plan Ms Rachel On a new earnings call Netflix co-Chief Executive Greg Peters named YouTube as one of its strong competitors Connolly entered into an employment agreement with Disney on Nov Disney reported in its lawsuit That contract ran from Jan to Dec with Connolly having the option of terminating the agreement earlier on March the lawsuit declared As part of the agreement Connolly agreed not to engage in business or become associated with any entity that is in business with Disney or its affiliates the lawsuit disclosed Disney noted YouTube was aware of Connolly s employment deal with Disney but still made an offer to him Entertainment companies have brought lawsuits in the past to stop executive talent poaching by rivals In Activision Blizzard sued Netflix for poaching its chief financial officer Spencer Neumann That circumstance was later closed after Activision appealed to dismiss the lawsuit in Netflix years ago also faced litigation from Fox and Viacom alleging executives broke their contract agreements to work for the Los Gatos-based streaming provision In a judge issued an injunction barring Netflix from poaching rival Fox executives under contract or inducing them to breach their fixed-term agreements Wendy Lee Los Angeles Times Cary Schneider contributed to this overview Los Angeles Times Visit at latimes com Distributed by Tribune Content Agency LLC
