October 20, 2021

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What Does the Black Widow Lawsuit Mean for COVID-Era Movies?

7 min read

Scarlett Johansson’s complaint against Disney is a reaction to a rescaling of studio ambitions during the streaming wars.
Photo: Marvel

When word came down that Scarlett Johansson was suing Disney for breach of contract for releasing her star vehicle Black Widow on Disney+ at the same time as the $200 million movie would be hitting theaters, it seemed as though a bilious disagreement had broken out in the Marvel Cinematic Universe — the most public venting of spleen since director Edgar Wright departed Marvel Studios’ adaptation of Ant-Man over “creative differences” in 2014.

On one side you had a two-time Oscar nominee and key performer in nine MCU entries putting the studio on blast for not living up to its end of a contractual bargain; that is, allegedly guaranteeing Widow a “wide theatrical release” (curtailed by its availability for concurrent streaming rental) and bilking the star out of back-end salary bonuses payable upon the prequel’s blockbuster box-office performance. The studio, meanwhile, issued an unusually caustic response, calling Johansson’s complaint “sad and distressing in its callous disregard for the horrific and prolonged global effects of the COVID-19 pandemic” — denying any contractual breach while divulging her $20 million payday for the film.

From there, several separate but related things happened in quick succession. On Friday, the advocacy groups ReFrame, Women in Film, and Time’s Up issued a joint statement slamming Disney’s attempts to castigate Johansson as a “gendered character attack.” And her powerful agent Bryan Lourd stepped from behind his firm Creative Artists Agency’s veil of silence to lambaste the studio. “They have shamelessly and falsely accused Ms. Johansson of being insensitive to the global COVID pandemic, in an attempt to make her appear to be someone they and I know she isn’t,” Lourd said. “The company included her salary in their press statement in an attempt to weaponize her success as an artist and businesswoman, as if that were something she should be ashamed of.”

A day after Johansson’s claim hit the wire, Gerard Butler filed a lawsuit against Nu Image/Millennium Films alleging he is owed at least $10 million in never-paid back-end bonuses for starring in the action-thriller Olympus Has Fallen. It all seemed to signal an end to a certain status quo surrounding star compensation and studio civility. It also threw into question: Were more Hollywood stars set to come forward to declare war on the studios for cooking the books in the COVID era?

According to industry insiders, Johansson’s lawsuit can be understood as a “public flailing”: an exceedingly rare instance of a top-level star negotiation spilling into the hard light of public view — even with the risk of disastrous optics on both sides — as well as a testament to the actress’s industry clout at a transitional moment when the MCU has switched its focus from film to Disney+ streaming series like Loki and WandaVision. But the complaint also reflects a rescaling of studio ambitions during the streaming wars when executives at various Hollywood backlot empires — but most notably Warner Bros. and Disney — appear more concerned with drawing new subscribers to their platforms than in maintaining long-term talent relationships.

Without exception, though, top entertainment lawyers, managers, and corporate strategists contacted by Vulture expressed shock that Johansson would attempt to take on Hollywood’s most powerful studio. “Disney has endless money,” a top entertainment-industry attorney says. “So the overriding issue you run into is, Who has the financial wherewithal to sue? Clearly she does. Even if it means never being in business with Disney again.”

According to sources, Johansson feels she should have earned around $70 million from Black Widow — and that the film’s less-than-stellar performance damaged her brand equity (as the type of box-office draw who can even demand as much as $70 million per role). But any discussion of what Johansson is and isn’t owed by Disney must begin with the question of whether or not Black Widow can be considered a hit. Upon arriving in theaters July 9, the female-centric superhero flick took in $80 million domestically to snare the biggest North American start of the N95 era and the most lucrative opening weekend overall since 2019’s Star Wars: The Rise of Skywalker. On top of Widow’s $218 million worldwide gross over that period, Disney took the rare (and impossible to independently verify) step of disclosing its streaming-only revenues: $60 million from Disney+ premium video rentals (at $30 per household on top of subscription fees).

Within days, pristine copies of Black Widow had flooded bootleg websites, helping the title surpass Chris Pratt’s The Tomorrow War as the most-pirated movie of the pandemic era. And in its second weekend in theaters, the stand-alone origin story for Johansson’s character Natasha Romanoff plummeted a disastrous 67 percent — the most precipitous decline for a Marvel Studios feature to date.

In her complaint, Johansson’s lawyer John Berlinski accuses studio executives of prioritizing the growth of Disney+’s subscriber base over adherence to the actress’s contract (which stipulates an exclusive theatrical release for Black Widow in 1,500 theaters for between 90 and 120 days). The suit goes on to note that former and current Disney CEOs Robert Iger and Bob Chepak reaped enormous stock grants tied to the platform’s financial performance. There is, of course, still ample room for lawyers to parse whether wide theatrical release means exclusive theatrical release. But the suit substantiates its breach-of-contract claim with a 2019 email from Marvel Studios’ chief counsel David Galluzzi to Johansson’s lawyer Kevin Yorn that details the studio’s specific intention to distribute Black Widow as it did Captain Marvel, which grossed $1.1 billion worldwide over its only-in-theaters run. (Emphasis added per Johansson’s complaint):

Further [to] our conversation today, it is 100% our plan to do a typical wide release of Black Widow. We have very high expectations for the film and are very excited to do for Black Widow what we’ve just done with Captain Marvel.

We totally understand Scarlett’s willingness to do the film and her whole deal is based on the premise that the film would be widely theatrically released like our other pictures. We understand that should the plan change we would need to discuss this with you and come to an understanding as the deal is based on a series of (very large) box office bonuses.

Disney is hardly the only major studio that seems to be making up new COVID-era compensation packages for its creative partners as it goes along. Last winter, Warner Bros. infuriated much of Hollywood by announcing it would release the entirety of its 2021 film slate via a “hybrid model” on HBO Max concurrent with each film’s theatrical release. Then the studio began quietly ironing out a series of splashy deals to pay performers and filmmakers something close to what they would have made in box-office bonuses if their movies had been traditionally released. Under those new terms, Wonder Woman 1984’s star and director Gal Gadot and Patti Jenkins reportedly walked off with more than $10 million each. And Denzel Washington is said to have earned around $20 million in lieu of back-end bonuses tied to his role in the underperforming thriller The Little Things.

“Warner Bros. has this whole formula now,” adds a manager who represents several top-tier actors, “and they’ve largely gotten away with it.”

According to an insider with knowledge of Disney’s C-suite (who agreed to speak on background), Chapek and Disney’s chairman of media and entertainment distribution Kareem Daniel are fixated on the bottom line. Which means increasing the number of Disney+ subscribers even if that means the “way talent is taken care of” must suffer. The studio’s priorities: business first, creativity and those who supply it a distant second.

Butler, for his part, sued Nu Image and Millennium Films, claiming the production companies had underreported foreign and domestic receipts for 2013’s Olympus Has Fallen by $11 million (including an $8 million kickback to the companies’ senior executives) in what Variety called a “more traditional ‘Hollywood accounting’ case.” Unlike the ScarJo case, however, COVID-19 had nothing to do with Nu Image and Millennium’s alleged fuzzy math.

Johansson became a box-office force — ranked as Forbes’ highest-paid actress in 2019 — after appearing in Marvel movies; she scored an eight-figure check for Widow and a reported $35 million back-end payday for her turn in Avengers: Endgame. But Black Widow fulfilled Johansson’s multi-film contractual obligation to Marvel Studios (the title providing a prequelized swan song for her elite Russian assassin character who was killed off in the third act of 2018’s Avengers: Endgame). She is understood to have been emboldened to pursue legal action against Disney precisely because there are no more planned cameos for Natasha Romanoff or MCU sequels.

Ultimately, Johansson’s complaint — with its allegation that Disney decided to release the film at a time when “it knew the theatrical market was ‘weak,’ rather than waiting a few months for that market to recover” — may be both too subjective (in light of the coronavirus infection spike caused by the Delta variant) and too Black Widow–specific to inspire a cascade of similar lawsuits by other Disney marquee movie stars. In its defense, the studio is expected to invoke force majeure: a common contractual clause freeing parties from liability or obligation in the face unforeseeable circumstance or an irresistible force often related to a state of emergency of an act of God.

“Her view is, ‘Hey, I’m getting fucked here because I should have made a ton of money and I’m not,” the lawyer quoted earlier explains. “That doesn’t mean they get to take advantage of her. And it doesn’t mean that she doesn’t have the right to sue them. And the studio is saying, ‘Well, hey, this is COVID-related. This is a force majeure. This is something that wasn’t anticipated and that we can’t do anything about.’ They’re going to say, ‘Look, if we only put it in theaters, we knew we were going to lose money. We planned on this but we didn’t know how COVID would be.’”

“But you would think that there would have been a lot more attempts to solve this thing behind the scenes,” he continues. “Were they having dialogues? Did Disney do anything? Why would you make such a public spat out of this? Black Widow was supposed to be one of their crown jewels. The studio is clearly pissed.”

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