Johansson v. The Walt Disney Company, A Contracts Cautionary Tale

The litigation between Scarlett Johansson and Disney settled with undisclosed terms but the fons et origo* of the dispute is a contracts cautionary tale.

Generally, each party to a contract should have a clear understanding of the terms of the agreement. It should be easy for a party to a contract to articulate what they are getting and what they are giving.

A well-written contract or agreement will provide both parties with a clear picture of the entire transaction and outline the remedies (or legal recourse) available to the parties in the event that things do not go as planned.

Ambiguity by design—in a contract—is a crazy concept (even for Hollywood).

Yet, the case of Johansson v. The Walt Disney Company shows us that ambiguity had been the standard in Hollywood contracts. A kind of “secure the deal now and we’ll negotiate any ambiguous details later” approach. The release of Black Widow, the 2021 Marvel Studios film starring Scarlett Johansson, contained a plot twist:

Litigation ensued over an ambiguous contract term regarding pay. Not a typical plot twist but there are important lessons (or reminders) to take from this twist.

First, the tea:

The entire suit, Johansson v. The Walt Disney Company, finds its genesis in the fact there was no express term in Ms. Johansson’s Black Widow contract requiring the movie’s release be exclusive to theaters for any duration.

According to the complaint, the term regarding the release of Black Widow states: “For avoidance of doubt, if [Marvel] in its sole discretion determines to release the Picture, then such release shall be a wide theatrical release of the Picture (i.e.**, no less than 1,500 screens).”(1) So, while the contract required Black Widow, if released, be released to 1,500 screens. The ambiguity here is whether the terms of the agreement permit a simultaneous theatrical and Disney+ Premier Access release.

Prior to the announcement of Black Widow’s hybrid release, Marvel reassured Ms. Johansson (in writing) that the release of Black Widow would be, as was both Marvel and industry standard at the time, exclusively released in movie theaters for somewhere in the range of 90-120 days.

Despite the contractual term and written reassurance from Marvel, on July 9, 2021, Black Widow was released simultaneously in theaters and on the Disney+ Premier Access streaming service.(2)

By doing so Disney increased its own profits at the expense of Ms. Johansson’s profits. Profits that Disney, Marvel, and Ms. Johansson had a clear understanding Ms. Johansson was entitled to and had, in standard industry practice, contracted for.

According to the complaint (1), a large portion of Ms. Johansson’s compensation is a percentage of theater box office receipts. It should go without saying but —for dramatic effect—less people go to see a movie at the theater in the middle of a global pandemic when the movie can be live streamed from the comfort of their couch and enjoyed with the companionship of their four-legged besties.

Here’s even more tea:

Reports detail that the sales of Black Widow on opening weekend were $80 million at the domestic box office, $78 million in international box office and $60 million from Disney + Premier Access.(3) For an analogous comparison, on its opening weekend the sales of Captain Marvel were $153 million at the domestic box office and $273 million in the international box office.(4)

Disney and Marvel pulled this “switcheroo” after Ms. Johansson had already held up her end of the bargain (a/k/a “fully performed under the terms of the contract”). After the movie was made and Ms. Johansson spent “several months fulfilling her own obligation” promoting Black Widow, Black Widow was released in a manner that was to Disney’s benefit and to Ms. Johansson’s detriment.(1)

I have no doubt Ms. Johansson had excellent attorneys negotiate and review her Black Widow contract. Details of Hollywood contracts and the standard operating procedure for how movies are released had been unchanged for so long the industry had essentially adopted an understood operating procedure. Reliance on long-standing standard operating procedures, or industry standards, in interpreting a contract term is not a practice limited to glamorous Hollywood contracts.

Disney is definitely still magical, and we are all glad the Marvel Cinematic Universe is still expanding but the most appropriate quote to summarize this cautionary tale is a reference from Black Widow herself; “Pain only makes us stronger”. Thanks to Ms. Johansson’s pain (the expenditure of time, emotional, physical, and traditional resources) we are reminded to be vigilant in considering and crafting contracts.  This contract cautionary tale pokes at the comfortable underbelly of reliance on industry standards with three important reminders:

[1] Words matter, so avoid ambiguity. It may be industry standard but important terms need to be express terms with purposefully defined language. Spell terms out within the four corners of the document. A definitions section may be appropriate. [2] Even when a contract is non-assignable or non-transferrable it is still imperative to avoid ambiguity. The party pulling the ultimate strings may not be the trusted party you contracted with in the first place. Ms. Johansson contracted with Marvel but Marvel’s parent company is Disney. Disney bought Marvel in 2009 which was both well before the pandemic and well before Ms. Johansson contracted with Marvel to star in Black Widow (2017).(1) [3] Slow is smooth and smooth is fast. Take the time to be clear and concise especially on the terms that impact the benefit you are bargaining for. Ambiguity leaves room for multiple interpretations and understandings; there should be only one.

It is a best practice to have a firm or lawyer learn your needs and goals and review contracts before you bind yourself to the agreement. If you have questions or need assistance, contact business attorney Tiffany Ann Jones or a member of our Widerman Malek team.

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(1) Johansson v. The Walt Disney Company filed July 29, 2021

Read the complaint here: https://link.edgepilot.com/s/65d7bbcb/0JR7gczc10y3sbkJgZE0LA?u=https://deadline.com/wp-content/uploads/2021/07/Complaint_Black-Widow-1-WM.pdf

(2) I believe this was announced sometime in March 2021. See Pamela McClintock and Aaron Couch, ‘Black Widow’ to Hit Disney+ Premier Access and Theaters Simultaneously, The Hollywood Reporter  (March 23, 2021) https://link.edgepilot.com/s/85a52bea/BoRBZiRsgUG2lyeNjVLtpg?u=https://www.hollywoodreporter.com/movies/movie-news/black-widow-to-hit-disney-premier-access-and-theaters-simultaneously-4129190/ 

(3) Jay Peters, Black Widow has been a big hit on Disney Plus, The Verge (July 11, 2021) https://link.edgepilot.com/s/788fec21/13VbcTKPHUuWzUs6uxLdWA?u=https://www.theverge.com/2021/7/11/22572613/black-widow-disney-plus-premier-access-theaters 

(4)Don Reisinger, ‘Captain Marvel’ Has Sixth-Biggest Debut of All Time With $455 Million Opening Weekend, Fortune (March 11, 2019) https://fortune.com/2019/03/11/captain-marvel-opening-weekend/ 

 

Latin 

*fons et origo = the source and origin 

**i.e. = id est = to clarify