Recently, Scarlett Johansson — who plays Black Widow in the Marvel Cinematic Universe (MCU) — sued Disney for breach of contract. Her claim is that Disney broke a promise to release Black Widow exclusively in theaters. This matters because, according to the complaint, “the bulk of Ms. Johansson’s compensation (is) tied to box-office receipts.” Her argument is that, by launching the film simultaneously in theaters and on Disney+, Disney “pulled millions of fans away from the theaters and toward its Disney+ streaming service” and “dramatically decreased box office revenue for the Picture.”
This is not the first time this kind of issue has come up. Last year, a similar problem arose in connection with HBO Max, when Warner Bros. announced that it would release all of its 2021 films simultaneously in theaters and on HBO Max. As I explained in that article, “anyone who is promised a percentage of box office revenue has reason to object to a streaming distribution plan that is likely to reduce or eliminate that revenue.” The same is true here.
Scarlett Johansson’s Legal Claims Against Disney Are Strong
If the case doesn’t settle, I think Johansson is likely to succeed. Because this is a breach-of-contract case, any case assessment should focus on the contract itself. Here, the relevant contract language states: “For the avoidance of doubt, if Producer … 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).” Viewed in a vacuum, this language is not sufficient to show a breach. After all, the contract defines a wide theatrical release as a release that extends to at least 1,500 theaters. The complaint does not allege that Black Widow was released to fewer than 1,500 theaters. But that’s not the whole story.
As the complaint explains, the standard custom and practice in the entertainment industry — and the long-standing practice between Johansson and Marvel — is that the term “theatrical release” referred to an exclusive theatrical release. Generally speaking, courts don’t like to look beyond the language of a contract itself to resolve contract disputes. However, courts do look beyond the contract to understand the meaning of particular terms, especially where, as here, those terms have an other-than-ordinary meaning in a particular industry. When the contract is read in light of that industry-wide understanding, the outcome is fairly obvious.
To be clear, a Johnasson victory is not a guarantee — Disney could make a reasonable argument that the pandemic changed the meaning of “wide theatrical release” and that the industry’s pre-COVID understanding of that term shouldn’t apply. It’s not the worst argument in the world, but the law says that you interpret the contract in accordance with the meaning it had at the time it was entered, which would mean the pre-COVID understanding would apply.
The Case Will Settle
As with the HBO Max dispute, I don’t think this case will ever see the inside of a courtroom. The strength of Johansson’s claims, in tandem with her high profile and Disney’s PR missteps in connection with this litigation, all point to the same outcome — that Disney will pay Johansson a lot of money to settle the lawsuit. This outcome is further bolstered by the fact that HBO Max did the same thing.
Ultimately, while the politics surrounding the Johansson lawsuit are interesting, there’s not much to say about the legal issues. Johansson’s claim is strong, a settlement is likely, and that’s about it. If Disney had only paid more attention to the comics, they would have known that if you get in her way, Black Widow Strikes.
