By Sarah E. Needleman 

Activision Blizzard Inc. is suing Netflix Inc. for allegedly poaching its former finance chief and causing competitive harm, citing a pattern of behavior by the streaming giant.

In a complaint filed in Los Angeles Superior Court Friday, the videogame publishing company said Netflix illegally recruited Spencer Neumann in late 2018, prompting a contract breach that disrupted business operations. Activision said the move also cost it business opportunities as well as millions of dollars paid out to retain other executives.

Mr. Neumann, who previously held roles at the Walt Disney Co. and private-equity firms, joined Activision as its finance chief in May 2017. The employment contract initially carried a three-year term.

"Netflix has a demonstrated pattern of caring only about attracting and employing whoever Netflix wants, regardless of whether it violates the law along the way," the suit claims.

A spokesman for Netflix declined to comment on the lawsuit.

Activision, known for its Call of Duty and World of Warcraft franchises, further argued in its complaint that Netflix gained an unfair competitive edge in recruiting Mr. Neumann while he was still under contract. The videogame company said that at the time it was negotiating a partnership for the streaming service to distribute original new TV shows based on its properties. That deal never happened.

Netflix has faced accusations of poaching before. Last year a California judge issued an injunction against the company to prohibit it from trying to hire Fox television and film executives who were under contract. The decision stems from a 2016 lawsuit filed by units of 21st Century Fox against Netflix.

21st Century Fox shared common ownership with Wall Street Journal parent News Corp.

The new lawsuit comes as Netflix has spent years battling Hollywood to become an entertainment powerhouse with original and acquired content spanning comedy, children's fair, reality TV and more. It has been spending billions of dollars annually to grow its catalog, driving up costs industrywide and creating a scarcity of equipment and talent.

Netflix and Activision once got along. The streaming service in 2016 added "Skylanders Academy," an animated series based on the videogame company's Skylanders franchise that is still available to Netflix subscribers.

Now the entertainment juggernauts are at odds. After reports emerged about Netflix's hire of Mr. Neumann, Activision said it placed the executive on paid leave and that he would subsequently be fired for cause.

The videogame company's chief corporate officer at the time, Dennis Durkin, took over as chief financial officer, a post he had previously held and still holds today.

In its lawsuit, Activision said it is seeking a jury trial and for Netflix to pay damages.

 

(END) Dow Jones Newswires

December 04, 2020 18:33 ET (23:33 GMT)

Copyright (c) 2020 Dow Jones & Company, Inc.
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