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Scarlett Johansson and Disney (DIS) locked horns on Thursday over the release of "Black Widow," with the entertainment behemoth dismissing a high-stakes breach of contract lawsuit as "sad and distressing."
Johansson, who starred in multiple Marvel Cinematic Universe movies as Natasha "Black Widow" Romanov, fired the first salvo in a bombshell filing that alleged Disney broke its contract with her by releasing her solo feature on streaming platform Disney+ on the same day as theaters.
According to Johansson's team, her earnings potential was "largely" tied to box office performance, with Marvel promising the movie star that the film would receive a theatrical-only release.
The filing added that Disney wanted to lure audiences away from the theater in order to grow its fledging streaming service Disney+, explaining that the move "substantially devalued Ms. Johansson’s agreement." According to "The Wall Street Journal," which first reported the news, Scarlett Johansson lost out on over $50 million due to the shift away from an exclusively theatrical release.
However, Disney pushed back hard against Johansson's arguments. In a statement issued to Yahoo Finance, the media giant said, “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."
It added: "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.”
Potentially 'pretty bad' for Disney/Marvel
An email exchange shared in the complaint shows Marvel’s Chief Counsel confirming an exclusive theatrical release in May 2019. It read:
"We totally understand that 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."
However, Devin McRae, LA-based entertainment & business litigator at Early Sullivan Wright Gizer & McRae, told Yahoo Finance that the details make Marvel look "pretty bad."
Still, McRae doesn't seem to think that the lawsuit will change the needle for current contracts already in place as Disney will most likely evaluate on a "case by case basis."
He added that the studio giant will most likely settle with Johansson to avoid a trial. However, future contracts could significantly change amid the shifting streaming tide.
"I think that we will see an immediate change in new deals," he explained.
Producers and talent "are going to want to work in protections for decisions like this and they're probably already saying that they don't want earnings to be based solely on the theatrical side because that's not the way things are working right now," he added.
"Black Widow" secured the highest pandemic-era opening to date, raking in $80 million at the domestic box office in its opening weekend, although still shy of expectations.
The Marvel prequel was simultaneously available on Disney+ for a $30 rental fee — a familiar strategy that Disney has applied to other pandemic-era tentpoles like "Mulan" and "Cruella."
Following the film's debut, Disney reported streaming revenue for the very first time, and the reasons why were obvious. According to the company, the film generated $60 million on Disney+ — less than theaters, but a significant haul amid Hollywood's new "pandemic normal."
Yet the suit accuses Disney of "hiding behind COVID-19," even as multiple studios amended release strategies this year, including WarnerMedia (T). The company announced last year that all 2021 films will have a day-and-date release plan.
The studio also implemented a much shorter theatrical window of just 45 days before a film becomes available on streaming or on-demand.
However, unlike Disney, WarnerMedia did renegotiate many of its talent contracts on the heels of its hybrid release plans. Warner Bros. reportedly paid more than $200 million to talent as part of the new agreements.
Still, despite a slow theatrical comeback, some analysts believe Disney left a decent chunk of cash on the table by choosing a hybrid strategy for "Black Widow." Historically, Marvel films perform the best at the box office, and, according to TorrentFreak, the film is currently the most pirated movie of the pandemic-era.
But studio heads might not care.
Studios that release films directly to platforms — Disney to Disney+, Warner Bros. to HBO Max — keep a significant portion of the revenues (about 80%), whereas a theatrical release is often split with theater chains.
"This is a watershed moment for the industry," LightShed Partners Rich Greenfield told Yahoo Finance at the time of "Black Widow's" release. He suggested movie studios are "becoming more powerful" in the wake of COVID-19, as the focus shifts from box office exclusives to hybrid releases on streaming platforms.
"[Studios] don't need the theaters as much as they used to....the leverage in the relationship is shifting [and movie studios] are realizing that they can generate a lot of money directly to consumer," he added.
Alexandra is a Producer & Entertainment Correspondent at Yahoo Finance. Follow her on Twitter @alliecanal8193