Black Widow star Scarlett Johansson sues Disney (DIS)

The Walt Disney Company (SAY) last version Black Widow is becoming a source of controversy. The film, which recorded the best opening weekend of the year in Hollywood for crashing into one of lowest box office receipts for a Marvel movie, made headlines after movie theater owners criticized Disney’s business strategy. It’s in the news again. This time, her star Scarlett Johansson is suing the studio for breach of contract.

The problem is Johansson’s salary from the film. She claims that Disney’s decision to simultaneously release the film in theaters and on its streaming service reduced its overall revenue, as it “pulled” audiences from first to second. Johansson is said to have received a percentage of the profits from the film’s theatrical collections.

The case is a first of its kind and could set a precedent for future earnings of new media stars. As the stock market has been rewarding Disney based on its streaming service’s performance lately, it could also set the tone for investors’ expectations for its future earnings.

Key points to remember

  • Black Widow Actress Scarlett Johansson is suing Disney for breach of contract, saying the studio’s decision to release the film simultaneously in streaming and theaters hurt her earnings.
  • Disney says the costume is without merit.
  • Other actors who have starred in the streaming versions of Disney have also reportedly “weighed their options.”
  • The lawsuit could set a benchmark for how actors are paid for hybrid releases on streaming services and theaters.

Why is ScarJo suing Disney?

Typical studio films pay big stars between $ 15 million and $ 20 million for big movies. Above this amount, stars take a share of box office and home entertainment revenue, known as backend payments, as part of their compensation. This latter payment can be especially important for big-ticket movies and blockbuster franchises. For example, Tom Cruise got a big salary from the Impossible mission series.

With over $ 22.5 billion in revenue, the Marvel series is a lucrative franchise for the stars who play it. In his costume, Johansson claims that Disney assured him that Black Widow would be released “only in theaters”. As Ms. Johansson, Disney, Marvel, and almost everyone in Hollywood know, a ‘theatrical release’ is an exclusive theatrical release. Disney was well aware of this promise, but nonetheless ordered Marvel to violate its engagement and instead air the image on the Disney + streaming service the same day it hits theaters, ”the costume says.

He further claims that Disney’s decision prevented the actress from “taking full advantage of the market with Marvel.” A source told The Wall Street Journal that she lost around $ 50 million due to Disney’s business tactics. According to the lawsuit, the studio did not respond when attorneys for Scarlett Johansson attempted to renegotiate the terms of her deal with the company.

Disney said the costume was baseless. Disney has fully complied with Ms. Johansson’s contract and furthermore, the release of Black Widow on Disney + with Premier Access has dramatically improved its ability to earn additional compensation on top of the $ 20 million it has received to date, ”the Burbank, Calif., based company said, adding that Johansson had received an award. compensation of $ 20 million to star in the film. He also criticized the actress for filing a complaint with “total disregard for the horrific and prolonged global effects of the COVID-19 pandemic.”

Black Widow earned $ 60 million on Disney Plus, the studio’s streaming service, in its opening weekend and grossed $ 158 million at the box office (domestic and overseas) during the same period. It broke the $ 100 million mark at the domestic box office in five days, the fastest figure to hit that figure in a year when the end of the pandemic hammered home box office revenue for most. studios.

However, the film has seen a dramatic drop in collections since then and has some of the lowest revenue for any feature in the Marvel Universe. Johansson isn’t the only one to blame the film’s streaming release for the low collections. The National Association of Theater Owners (NATO) issued a statement blaming the entertainment conglomerate and castigate streaming as an “pandemic era” artifact.

How much should actors be paid for streaming roles?

While Disney Plus has raised Disney’s stock price, the streaming service may prove to be a mixed blessing for the cast. It has the potential to expand their reach across geographies and strengthen their personal brand. But it can also eat into their overall income from the company’s franchises. Actors receive less cash up front in the current system, but backend payments provide a steady stream of income later on. Streaming could change this dynamic.

According to some reports, Netflix, Inc. (NFLX), the largest streaming service in terms of subscribers, pays actors more money and keeps future streaming revenue for itself. For example, Hollywood actor Ryan Reynolds was awarded $ 27 million to start in Six undergrounds. Will Smith reportedly grossed $ 35 million for his role in Bright 2. The downside to these numbers is that Reynolds and Smith can’t participate in any future hits for their films, meaning they won’t receive backend payment even if viewers stream the films multiple times. For Netflix, high upfront payments inflate movie budgets, so it’s important that they are hits.

Other streaming services are also taking steps to change their payment terms. HBOMax — a division of Warner Media, which is owned by AT&T Inc. (T) – reportedly changed his deal with the stars and spent up to $ 250 million in payment after announcing that his list of films would be streaming as well as in theaters this year. However, the studio did not provide details on the new compensation deal with the cast.

Johansson’s trial could bring such discussions to light. Commercial publication Variety says it “emboldens” actors like Emily Blunt and Emma Stone – two stars of recent streaming releases – to weigh their options and could have an expensive “cascading effect” for Disney. Joe Pichirallo, a former studio manager, told the site that “a new compensation system needs to be worked out so that talent doesn’t feel like it’s being looked down upon or treated badly.”

The outcome of this case could also have repercussions on Disney’s results. By investing money in its content initiatives, Netflix has raised the bar for the average budget for streaming productions. An omnichannel strategy coupled with a higher starting salary for actors could reduce Disney’s overall profits from a typical production.