”It’s not the best way to deal with talent,“ an entertainment attorney says
Scarlett Johansson’s bombshell lawsuit against Disney over the dual theatrical-streaming release of “Black Widow” could open the floodgates for other stars and producers to pursue legal claims against studios whose shift in release strategies impact monetary bonuses based on box office performance.
“Profit participation suits are nothing new, but this angle of testing day-and-date releases based on COVID is uncharted territory, and I think it will cause many actors, actresses and producers to examine their contracts,” Daniel Rozansky, Partner at Stubbs Alderton & Markiles LLP, told TheWrap. “Stars want to make sure they’re getting what they bargained for.”
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Devin McRae, Partner at Early Sullivan Wright Gizer & McRae LLP, agreed: “I’m sure that entertainment attorneys representing talent in these deals are watching this, when they negotiate similar deals with clients it’ll be a subject for discussion.”
In her suit on Thursday, the actress alleged that Disney breached her contract by abandoning a promised exclusive theatrical release of “Black Widow” — thus depriving of her of box office-based bonuses that insiders told the Wall Street Journal were worth as much as $50 million. (A rep for Disney called the actress’ suit “without merit” and said she had already been paid $20 million for her work on the Marvel film.)
But Johansson is not the only major star of a Disney film in the last year that’s gotten a dual release in theaters and on the Disney+ streaming service — and may be impacted by reduced backend revenue based on ticket sales. Niki Caro’s live-action “Mulan,” “Raya and the Last Dragon” and the Emma Stone-led “Cruella” have all gotten a dual theatrical-streaming release — as will Dwayne Johnson and Emily Blunt’s “Jungle Cruise,” which opens Friday in both formats.
Reps for Stone, Johnson and Blunt did not respond to TheWrap’s request for comment.
An individual close Johansson told TheWrap that the actress is aware that she’s using her clout to confront a studio to which she has had a close association for more than a decade and nine MCU movies — but feels that it’s the right thing to do for herself and for others in the industry.
Several Hollywood insiders and attorneys expressed surprise that Disney didn’t follow the approach of Warner Bros., which renegotiated deals with the stars and producers of its 2021 films after it decided to release its full slate simultaneously in theaters and on its own streaming service, HBO Max. According to the Wall Street Journal, WarnerMedia paid out $200 million in new deals — including $10 million each to “Wonder Woman: 1984” star Gal Gadot and director Patty Jenkins.
And in May, Bloomberg reported that John Krasinski and Emily Blunt sought additional compensation after Paramount decided to halve the theatrical run of “A Quiet Place Part II” and stream it on Paramount+ just 45 days after it hit theaters. The studio rebuffed the appeal at the time, according to Bloomberg. The horror sequel managed an impressive $158 million at the domestic box office. An individual with knowledge of the studio’s proceedings said that it never became a pay dispute. Reps for Krasinski and Blunt did not respond to requests for comment.
The issue of compensation for key talent for films shifting to streaming had been on Disney’s radar. Last December, TheWrap exclusively reported that Marvel was exploring new talent deals for future film productions to provide flexibility in case the studio decides to bypass theaters and take films to Disney+. Under the new contract language, key above-the-line talent like actors, writers, directors and producers would receive adjusted compensation depending on whether the film opens in theaters or debuts on the Disney+ streaming service, according to an insider with knowledge of the situation. Marvel blockbusters typically pay backend bonuses to key talent based on a film’s box office performance, which can be substantial for MCU films.
But such language was not in place for films like “Black Widow” whose contracts were signed before the pandemic — and the launch of the Disney+ streaming service. In her suit, Johansson said she tried to speak to Disney and Marvel about renegotiating her pre-existing deal ahead of this month’s “Black Widow” release, but the studio “ignored” her. (The studio so far has not addressed this claim.)
And that’s where many Hollywood lawyers say that the studio may have erred. “They decided to make more profit by violating her contract so they made a calculated decision in an efficient breach of contract — they decided that they were going to do what they were gonna do and deal with her later,” McRae said. “Probably would’ve been better to negotiate with her up front. It’s not the best way to deal with talent.”
James Sammataro, Partner Pryor Cashman LLP agreed: “There needs to a re-alignment as to how A+ stars and directors are paid.”
One top Hollywood agent said that Disney is likely to settle the case — to Johansson and other stars’ financial benefit. “They’re going to have to cut a check for at least $50 million to ScarJo (and likely more) and also for other similarly situated talent on their films that are doing simultaneous theatrical/streaming releases,” the agent said.
Umberto Gonzalez
Film Reporter ◘umberto@thewrap.com◘Twitter: @elmayimbe
Beatrice Verhoeven
Film Editor, Twitter: @bverhoev