The Walt Disney Company has an awful mess on their hands this week as Scarlett Johansson has sued the company over its business decisions with the movie Black Widow. While this has almost certainly meant Johansson will never work with Disney again, according to various sources, it has called Disney out into the spotlight in ways that it would prefer to avoid. Simultaneously, the amount of money at stake is such that Disney might not be willing to settle out of court.
A cost that Disney doesn’t want to afford versus revelations it seriously doesn’t want in public make this an awesome Catch 22 seldom seen in Hollywood.
Black Widow currently has a $319,451,514 box office haul worldwide. Given its $200 million production cost and a (likely) $100 million marketing budget, that would mean the movie is far below where Disney needs it to make a profit. In fact, when considering that Disney only likely saw around 60% of those profits after taxes and movie theaters receive their cut, Disney is almost certainly around $110 million in the hole with the movie. That’s not Space Jam New Legacy bad, but it’s not far from John Carter bad.
Now that’s something you won’t read in the trades, huh?
Two weeks ago, I reported on Pirates and Princesses that Disney’s new strategy for reporting movie income was poised to change the industry forever. By only announcing good news for revenues for streaming, and not announcing results when they’re unfavorable, Disney was able to make box office results an unreliable way to determine movie success. That was purposeful. So while Black Widow opened to lackluster box office results, Disney managed to change the headlines so that they received glowing narratives about a $200 million opening weekend worldwide.
In reality, Black Widow is an epic failure financially, and the first real stinker for Marvel in more than a decade. Now, it may be a headache that Disney wishes it could forget.
Scarlett Johansson is suing because she is claiming that Disney managed to cut her out of her negotiated profits by putting the movie on Disney+. Because the movie was on Disney+, and reportedly made $60 million off of streaming instead of box office, Johansson was unable to gain any compensation for the streaming profits, which likely did cut into the box office totals. The problem for Disney is that they would like to continue having this option available, and so pulling a mea culpa here would make Disney+ potentially less profitable.
Yet there is a bigger danger for Disney than having untold amounts of money removed from them by future profit sharing. The thing Disney wants to avoid most is for Black Widow’s full financial picture to be laid bare in documents related to a court case. The entire move to release the movie’s streaming numbers via press release was an attempt to save face by leaving commentators and investors clueless about how much the film actually made. If the financials are made fully-public, it will inevitably show that Disney was playing a corrupt game with the way they manipulated the numbers and the narrative. This move affected their stock price, as well as Johansson’s paycheck. A lawsuit such as this could sully Kevin Feige, and damage Bob Chapek.
For Johansson, the move is gutsy. It could, in fact, end her Hollywood career. Will other studios be willing to take a risk with her if she is a litigation risk? Then again, perhaps this earns her so much publicity clout that she can take on studios that are unwilling to hire her by slamming them in the press for being anti-feminism? She’s probably just behind the height of her career, so the stakes are staggering.
At a time when movie studios are hurting more than ever before (and hiding it more than ever before), Johansson’s actions have put the entire streaming + box office combo on notice. Contracts with profit sharing models are not going to be safe to exclude from the streaming side of the equation. And dubious attempts to manipulate the narrative about your box office duds could just fail spectacularly.
All this over a film that is more than a hundred million in the hole…
