Actress Scarlett Johansson stars in the latest Marvel superhero film Black Widow that hit audiences in theaters two weeks ago. In its first week, the movie brought in $80 million in domestic box office revenue with another $78 million abroad. Sounds like good news, right? Well not according to Johansson in a recent lawsuit filed in Los Angeles County on her behalf against Disney Studios.

Johansson is alleging that the day-and-date release of her Marvel movie was in breach of her contract with Disney. Day-and-date means that a movie is released in theaters and simultaneously released for streaming as well. The movie Black Widow was released to theaters and then Disney put the movie on its Disney+ streaming service the same day. Johansson alleges that this movie was designed and produced with the theatrical experience in mind and with Disney releasing the movie in both theaters and on Disney+ it is in breach of her contract and could potentially deprive her of a huge box-office-infused paycheck.

Johansson’s lawsuit claims that she was promised the film would receive a wide theatrical release. A substantial portion of her total compensation was from bonuses based on theatrical box office sales. The day-and-date release strategy with Disney Plus, she alleges, tortiously interfered with her Marvel deal. Although Johansson tried to renegotiate her contract with Disney, it has been with no success. Johansson’s lawsuit complains that Disney knew it was forgoing hundreds of millions of dollars in box office receipts by simultaneously releasing the movie to theaters and to Disney+ and thereby, promoting the streaming service instead of a “weak” theater business (mostly due to the pandemic) and not having to pay out what could have been very large box office bonuses from a theatrical box office release.

Within hours after the lawsuit was filed, Disney responded with a press statement: “The lawsuit is especially sad and distressing in its callous disregard for the horrific and prolonged global effects of the COVID-19 pandemic. Disney has fully complied with Ms. Johansson’s contract and furthermore, the release of Black Widow on Disney+ with Premier Access has significantly enhanced her ability to earn additional compensation on top of the $20M she has received to date.”

The result of the filing of this lawsuit has been chaotic for the movie industry and it has spurned several other lawsuits from other actors making similar claims. Johansson’s lawsuit also highlights how streaming has forever changed the way we experience movies and the implications for the creatives and talent who make them. Talent and studio lawyers will inevitably work out new deal points to address the new business realities of streaming. Until they do, more of these lawsuits will probably occur.

As in most industries, business evolves and so does contract negotiating and individuals and companies have to stay present and informed on upcoming trends in their industry to understand the changes that are occurring. For example, Johannsen’s contract for Black Widow was negotiated in 2017, pre-pandemic and pre-Disney+. But with the shift to streaming and the ongoing pandemic, delivery systems for entertainment have changed, perhaps permanently, in ways many predicted with the speed few foresaw.

While actors know now that they need to negotiate terms for streaming, determining the worth of streaming is more difficult than simply looking to box office receipts. Streaming services have been alleged to hold their performance data extremely close to the chest and they are reluctant to share specifics about engagement and earnings on specific titles.  With traditionally negotiated contracts based on box office performance and with alleged lack of transparency by streaming services, it can lead to confusion and difficulty for actors and actresses to properly evaluate their bargaining position during contract negotiations. Additionally, predicting the success of a movie in the theater vs the success based on the viewership of streaming is as much art as science.

The ability to negotiate a contract and its terms is difficult and having the foresight to include terms that will reflect the current industry and accommodate future changes can be as unpredictable as anticipating the success of a movie. This reality applies regardless of the industry.  If you have a contract to negotiate, review and/or prepare, the attorneys in our Austin and Dallas offices are available to answer any questions you may have. You may email your questions to info@gstexlaw.com.

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