Let’s break down the case file
2019: Marvel fans’ dream come true: Scarlet Johansson’s first standalone Marvel film, Black Widow. It was scheduled to release in May 2020.
April 2020: And then the pandemic happened. People were too terrified to go to the theatre.
May 2020: Disney CEO Bob Chapek insisted that Scarlett Johansson-front superhero movie “Black Widow” was still on course to make its debut in theatres worldwide.
Jan 2021: But then, things didn’t work out as planned. It was time to come up with a backup plan. It took the decision of sending its big-budget live action movie “Mulan” to Disney Plus.
July 2021: Black Widow was released in theatres and online simultaneously.
July 2021: Scarlet Johansson sues Disney.
Contract: Johansson claims she was promised by Marvel Studios (which is owned by Disney) that the film would be released first in cinemas and then there would be a window of time that would pass before it would be streamed online.
What happened: Johansson’s salary is largely based on box office performance – her character’s standalone film raked in $158 million from theatres across the globe. However, Disney enjoyed $60 million in home sales of the movie, which costs $30.
Why did she sue? Johansson is suing because her compensation depends in large part on how well the film does on the big screen, Johansson argues, the availability of the movie at home reduces her potential earnings. So in her eyes, there is a clear breach of contract.
Disney’s response: ‘There is no merit whatsoever to this filing. The lawsuit is especially sad and distressing in its callous disregard for the horrific and prolonged global effects of the COVID-19 pandemic.’
What was not said: By releasing confidential numbers regarding Johansson’s compensation and bringing up the pandemic, Disney tried to make her sound insensitive.
There are obviously two sides to any story.
Why would one take Johansson’s side?
- The contract specifically says only theatre release.
- Disney’s response to the lawsuit is beneath them.
- Attempt to character assassinate by revealing her salary to try to make her sound greedy and unsatisfied (Somehow, when men charge more – it is a sign of pride?)
In any event, Disney will undoubtedly face reputational damage as a result of this claim. The company is already coming under fire for its strongly worded statement to Johansson. In its statement, Disney also leaked Johansson’s salary and appears to be accusing her of being insensitive to the effect of the pandemic on the entertainment industry.
Why would one take Disney’s side?
They made the call to release the movie in a hybrid model keeping in mind the pandemic and the desire to gain more followers by streaming the movie online and ensuring that everyone got to see the movie.
Time to think.
- Compensation is frequently contingent on a future event, often called a “trigger”: hitting a sales target, closing a deal, selling a certain number of books. Does the party making the payment have an obligation to allow the triggering event to take place?
- Why didn’t Disney amend the contract before releasing the movie online to ensure that Johansson did not get affected by the change in the strategy?
- Is this a ploy to increase subscribers, thereby boosting the company’s stock price?
- If it was an Iron Man movie, would Disney have taken adequate precaution to keep all parties happy?
- Why are the other actors mum about the lawsuit?
- Johansson is making the sideways legal claim that Disney, as parent company, caused Marvel, its subsidiary, to breach contractual obligations. Does this matter?
- For Johansson to win, she must show that Disney intended to induce Marvel to act in bad faith. Can she?
- With business models being agile to suit changing times, will the compensation model be affected?
- In contract law, there’s also a concept called “frustration of purpose” where contractual duty is excused upon an unforeseen event (hello, COVID-19) that impedes performance.Will this help Disney beat Johansson?
- Emma Stone, for example, is rumoured to be considering a similar lawsuit against Disney for their Cruella release strategy. Is this the start of a trend?
Either way, the case has become part of Hollywood history as it has the power to change how Hollywood pays and contracts talent in an age where streaming is rising in popularity. Many actors would now request for upfront payment and not rely on box-office performance. Percentage of profits might not always be a priority.
The legal battle continues. Public opinion? What do you say?