Lionsgate hit with a $5.8 million ‘Biggest Loser’

Arbitrator rules studio undercut profit potential of fitness guru Jillian Michaels’ recorded workouts with free YouTube postings

Fitness guru Jillian Michaels has found a legal workout that may make skinnier the wallets of Lionsgate Films Group while also putting more muscle behind performers’ options to protect their works from popping up for free on YouTube.

Entertainment law experts are watching closely Michaels’ recent favorable decision from an arbitrator, awarding her $5.8 million in her dispute with the studio over fitness videos tied to the hit TV weight-loss show Biggest Loser.

What led her to get so exercised about how Lionsgate treated her workouts, and how might this tighten up some commercial online video practices?

Workouts spun off a hit series

In 2007, at the height of Losers’ broadcast popularity, Michaels had negotiated with the studio an agreement to star in collateral workout videos, which also would be shown and promoted on cable channels, the Hollywood Reporter says. The products sold well enough, both in stores and on cable, that Lionsgate wanted her to ink another deal, paying her more but giving the studio greater distribution rights. Michaels declined, finding another well-known vendor to market her workouts.

She and the studio then got into loggerheads over BeFit, a YouTube wellness channel that Lionsgate launched with Google, the online video’s parent company. Lionsgate split revenues on the burgeoning channel with Google. But Michaels, who had a standing agreement with the studio that it would consult her about distribution of her work, complained she wasn’t getting her fair share.

Audits were conducted, and further discussions ensued. Michaels sued Lionsgate in 2015.

An abitrator rules

Bruce A. Friedman, the Los Angeles arbitrator whose decisions was released in Nashville, agreed with Michaels in early May that she was owed lost, past and future profits due to Lionsgate streaming YouTube videos of her work. The arbitrator also awarded her attorney fees and arbitration costs.

Lionsgate has not commented on the ruling but Michaels told Business Insider that, “This is an important decision for not just me, but for all experts, artists, and content creators finding their work devalued and revenue lost in this digital age.”

Richard Busch, her attorney in Tennessee, called the arbitrator’s ruling a “landmark” in how it affects companies’ promoting, sharing, and licensing of creative content—and in protecting talent. Studios regularly post creatives’ content online via YouTube clips; record companies often post their music in the same way. “This decision represents a firm pronouncement that placing work on YouTube for free devalues it and damages artists, like Jillian, who created it,” Busch told The Tennessean.

The arbitrator’s ruling, the Hollywood Reported noted, contained unusual consideration in awarding Michaels future profits from Lionsgate’s exploitation of her work. That’s fair because, the arbitrator decided, her work had helped the studio in the recent past build its YouTube channel audience, now estimated to exceed 27 million viewers, and so she should reap future gains, too.