Disney CEO Bob Chapek defends Disney+ releases amid Scarlett Johansson lawsuit

Yahoo Finance's Alexandra Canal breaks down Disney's strong Q3 earnings report, and how the company plans to address compensation hurdles amid the streaming boom.

Video Transcript

- Disney shares bursting out today. One of the top performers in the Dow shares, up just over 1%. So a little off their highs of the day. They had strong earnings out after the bell yesterday beating on both the top and bottom lines, Disney+, also their park numbers, were two standouts during the quarter. Alexandra Canal has the latest on that for us and, Ali, it looks like investors are pretty encouraged by the numbers that we saw yesterday.

ALEXANDRA CANAL: For sure, and as you said, it was a very strong quarter for Disney. They also beat on those subscriber estimates, which is especially important since we're seeing a bit of a slowdown across the board from these major players when it comes to those subscribers. Analysts had expected 114 million subs, but Disney added an additional-- ended up having 116 million subscribers at the end of the quarter. So this was very encouraging for Disney. It also really underscored the importance of Disney+ and how that is a strong asset for the company, especially during this time when their parks business has been a little slower to recover.

However, I will say that Hollywood has been a bit apprehensive to embrace the streaming wave. Just a few weeks ago, we saw that Scarlett Johansson, the star of Marvel's "Black Widow" went ahead and filed a lawsuit against Disney, citing breach of contract. In that filing, she said-- Her and her legal team said that she missed out on a lot of earnings potential due to that decision to air Black Widow on Disney+ the same time as theaters. According to sources at the "Wall Street Journal", she lost out on about $50 million when it comes to those potential bonuses.

Now in response to that, Disney had quite a fiery reaction. Basically, citing the COVID-19 pandemic and that rhetoric did carry over into the earnings call last night. CEO Bob Chapek saying that Disney+ day and date releases are here to stay. It's something that we encourage during this uncertain time and how flexibility is especially important. He also noted that they have figured out ways to fairly compensate their talent. He said quote, "Since COVID has begun, we've entered hundreds of talent arrangements with our talent and by and large, they've gone very very smoothly, so we expect that that would be the case going forward."

So clearly a lot of back and forth here. SAG-AFTRA also wading into this debate and sided with Scarlett Johansson. We'll see what happens over the next few weeks, but I think this earnings report just underscored that Disney+ is here to stay. And you can expect a lot more releases to be on Disney+ in the coming months.