Maker Studios, Now Owned By Disney, Sued For $19 Million By Former Filmmaker

A filmmaker who worked for Disney’s recently acquired Maker Studios is suing the company for $126,000 in deferred salary and up to $19 million in stock, Courthouse News Service reports -- just months after Disney's nearly billion-dollar buyout of Maker.

In a lawsuit filed Monday in Los Angeles County Superior Court, William Watkins claims he and Maker Studios agreed to a $90,000 yearly salary when he was hired in 2009, delivered in cash and stock. According to the suit, at the time, Maker claimed the salary amount “might constrain its cash flow” so the two came to an agreement where Watkins would receive $1,000 a month in cash and the remaining $6,500 to be paid in Maker stock.

A year into his employment at the company, Watkins charges the studio stopped paying him in stock and began to treat the unpaid portion of his salary as a loan.

"Thus, from February 2010 through December 2011, defendants became indebted to plaintiff for the sum of approximately $126,500," the lawsuit states.

Watkins left Maker in 2011. Two years later, he said, then-Maker CEO Danny Zappin and executive Ben Donovan told him that the stock experienced a 10-for-1 split, which gave him 10 times the amount of stock he previously owned. When Watkins expressed interest in cashing out on the 200,000 shares he now owned, the lawsuit asserts, “Zappin and Donovan's mood visibly shifted. Donovan guardedly said that he would forward Zappin a copy of the written documentation (which Plaintiff never received).”

Now, Watkins is seeking damages for breach of contract, specific performance, fraud and deceit and other counts.

Maker Studios was one of YouTube’s largest independent multichannel networks before it was bought by Walt Disney Co. (NYSE:DIS) for nearly $1 billion earlier this year. With 50,000 channels and approximately 5.5 million page views a month, the acquisition let Disney tap into Maker’s giant talent pool.

“They feel that they can leverage [the talent] across different projects and monetize them much more effectively than any stand-alone MCN [multi-channel network] could,” Peter Csathy, CEO of Manatt Digital Media Ventures, told the Hollywood Reporter. “They see it as a training ground, a farm club for talent.”

Earlier this month, Maker’s two remaining founders, Lisa Donovan and Ben Donovan, left the company. Zappin left last year and is now suing the company too, accusing Maker’s executive team, board, and investors of breach of contract and fiduciary duties.