Disney and Sony have benefited from £13.5m in payments from a Russian joint venture since the invasion of Ukraine, despite suspending operations in the country.
A Moscow-based company responsible for marketing and distributing films in Russia made by the two studios paid out a £13.1m dividend in March 2022, one month after Russia invaded Ukraine. A further £440,000 was paid between July and December 2023, according to analysis of recently-filed accounts.
The money was paid by Moscow-based Walt Disney Studios Sony Pictures Releasing (WDSSPR) to Eastern European Holdings (EEH), a company jointly-owned by Disney and Sony’s Columbia Pictures division and based in London.
The dividends resulted from business that took place before the studios announced they were putting their operations in Russia on hold. Neither company has ongoing commercial operations in the country and there is no suggestion they have acted improperly or breached any sanctions.
Nevertheless, the timing of the payment raises awkward questions for the two Hollywood studios.
Disney announced on March 10, 2022 that it was pausing all business operations in Russia in the wake of Russia’s invasion of Ukraine in February of that year. Sony followed suit a day later. One week after that, EEH received its £13.1m dividend from WDSSPR, which was subsequently paid out to Sony and Disney.
The revelation that the two companies have received millions of pounds from a Russian joint venture since the outbreak of the war comes at a time of continued scrutiny of Western business operations in the country.
Campaign group B4Ukraine has pressured companies that still have operations in Russia to fully cut ties.
Many companies that have tried to exit the country have found it difficult, with several forced by the Kremlin to sell their assets on the cheap. The boss of Carlsberg has said its business in Russia was “stolen” by authorities.
EEH was set up by Disney and Sony in 2006 and was responsible for releasing hits like Frozen and Spider-Man: Homecoming in Russia. Disney and Sony decided to end the joint venture in June 2020 and the dividends were paid as operations in Russia were wound up.
WDSSPR held £25.9m in Russian bank accounts by the end of 2021, which was due to be distributed to the studios. The £13.1m dividend left around £10m in WDSSPR’s Russian accounts.
Accounts for EEH for the year-ending Dec 31, 2023 state that “under current regulations, monthly dividend payments of 10,000,000 roubles (approximately £100,000) by WDSSPR to the company are permissible and a dividend payment process was implemented in July 2023.”
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