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Nope, Scarlett Johansson's Disney Lawsuit Didn't Change the Movie Industry After All

By Anders Bylund – Updated Oct 2, 2021 at 9:40AM

Key Points

  • Johansson’s suit over Disney’s handling of the "Black Widow" movie could have set a legally binding example for other artists and studios to follow.
  • Instead, the parties simply settled out of court.
  • This ultra-quiet endgame leaves the movie industry unsettled in the move from one era to another.

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The lawsuit has been settled in the least game-changing way possible. That's a bummer.

When Scarlett Johansson filed a lawsuit over Walt Disney's (DIS -1.68%) premiere of her Black Widow movie, the suit had the potential to set new standards for the movie business as a whole. Two months later, Disney and Johansson shook hands over a quiet settlement instead. Black Widow's game-changing moment never happened.

Here's what the quietly settled suit means for investors in the entertainment industry.

Settling the score

Terms of the settlement were not disclosed, though I assume that it involves Disney making Johansson whole for the theatrical profit-sharing profits that didn't materialize from the Black Widow release.

The movie premiered on the streaming Disney+ platform on the same day as the theatrical release, in a rare practice known as a day-and-date digital release. Johansson's contract included language giving her a share of the cinema-based profits, which were lowered by the competing stay-at-home viewing option.

According to a statement that first appeared in The Hollywood Reporter, Johansson is "happy to have resolved our differences with Disney" and "incredibly proud of the work we've done together over the years." She has appeared as Natasha Romanoff (also known as The Black Widow) in nine of Disney's Marvel movies to date, and her door seems open for further collaboration again.

Disney Studios chairman Alan Bergman also noted his appreciation for Johansson's work, looking forward to the upcoming Tower of Terror movie. That title has been in development for years but brought Johansson aboard as producer four months ago.

What could have been

I expected Johansson's lawsuit to help the movie industry come to terms with the new realities of video-streaming services taking the baton from movie-theater traditions. She can obviously afford to take a case like this all the way to the highest courts of the nation, forcing the judicial system to set up a legal framework for actor contracts in the digital era. A lesser light might not have the financial freedom to get that far, especially if vindictive Hollywood studios blackball them over a direct challenge to their established systems.

But the two parties settled their differences privately after making a fuss for a few weeks. This outcome will not set any new movie industry standards, neither in legal terms nor in newly established operating practices.

A judge's gavel in a grey light with digital symbols in the background.

Image source: Getty Images.

This is bad news for Disney and friends

Johansson's peaceful settlement is not good for the media sector as a whole. I say that as a longtime shareholder of Disney and Netflix (NFLX -0.74%), both of which should prefer to have a stable framework for contract negotiations.

In the long run, the content creation studios must come up with some sort of boilerplate language for actor deals that include profit-sharing across physical and digital platforms. Having that framework in place would make it easier to form and maintain working relationships with the creative talent, from A-list actors all the way down to the best boy grip's personal assistant.

Instead, this settlement leaves the contract situation just as unsettled as it was before the Black Widow premiere. Some other top-level talent will surely bring the legal heat someday unless the industry reaches acceptable cross-platform contract standards on its own.

Uncertainty is always worse than stability. Johansson's settlement surrendered a perfectly good opportunity to make Hollywood work better for all of its stakeholders in the age of media-streaming services. I'm a disappointed media-stock shareholder today, even though both Disney and Netflix saw their share prices rise on the news.

Anders Bylund owns shares of Netflix and Walt Disney. The Motley Fool owns shares of and recommends Netflix and Walt Disney. The Motley Fool has a disclosure policy.

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