When I post about revenue disputes, it’s usually about legal decisions, valuations and the like. But this post is about strategies outside of the courtroom; in particular, Disney’s personal attack on Scarlett Johansson in response to her Black Widow lawsuit.

The deal that Scarlett Johansson made as star of Black Widow was that she would receive bonuses tied to the movie’s box office success. When Disney released the movie in theaters and on the Disney+ service on the same day, however, Johansson quickly sued, claiming this “day and date” release would unfairly depress box office and, hence, her bonuses.

How much is at stake? According to sources cited by the Wall Street Journal, more than $50 million.

On July 30, the day after Johansson sued, a Disney spokesperson accused the star of a “callous disregard for the horrific and prolonged global effects of the COVID-19 pandemic” and doxed her floor compensation as “$20M .  .  . to date”. This, while Black Widow was still in theaters. Outside of “me too” reckonings, it’s virtually unheard of for a studio to publicly attack a star in this way.

So, what explains Disney’s highly personal and even inflammatory attack? Was it:

1. a tone deaf blunder, a rogue act of an overly aggressive PR team? or

2. an exercise in “kayfabe” – the careful promotion of a staged conflict presented as genuine? or

3. a dramatic intent to transform talent relations and profit participations as we know them?

Natasha Romanova

Scarlett Johansson has performed the role of Natasha Romanova aka the Black Widow in nine films in the Marvel Cinematic Universe, including Iron Man 2 (2010), The Avengers (2012), Captain America: The Winter Soldier (2014), Avengers: Age of Ultron (2015), Captain America: Civil War (2016), Avengers: Infinity War (2018), a cameo in Captain Marvel (2019), and Avengers: Endgame (2019). Black Widow, which was filmed in 2019 and released on July 9 of this year, is the final movie in which Johansson will appear in the role and is the subject of her lawsuit.

Disney’s Public Statement

Films in which Johansson has appeared as the Black Widow character have collectively generated billions of dollars at the worldwide box office. Yet Disney’s statement, made the day after Johansson filed suit, makes no mention of the larger relationship or the many Marvel films in which she appears. Here’s Disney’s statement in response to the lawsuit:

There is no merit whatsoever to this filing. The lawsuit is especially sad and distressing in its callous disregard for the horrific and prolonged global effects of the COVID-19 pandemic. Disney has fully complied with Ms. Johansson’s contract and furthermore, the release of Black Widow on Disney+ with Premier Access has significantly enhanced her ability to earn additional compensation on top of the $20M she has received to date.[1]

What is problematic about this statement? Johansson has made a commercial claim regarding money and the performance of promises. Disney’s response, on the other hand, is an outrageous and largely ad hominem or, to be more precise, ad feminam attempt at character assassination. It would be hard to imagine another Fortune 100 company acting this way.

Alleged Lack of Empathy

There have been more than 4.3 million Covid deaths, and more than 600,000 in the U.S. alone.

Scarlett Johansson has said her job as an actor is to enable “an empathetic experience through art.”[2] By accusing her of a “callous disregard for the horrific and prolonged global effects of the COVID-19 pandemic”, Disney is saying, in effect, that Johansson herself lacks empathy. This is an attack on the basis and meaning of her art – a “shoot to kill” move, albeit with words.

Alleged Lack of Ethics

In response to a lawsuit, a defendant can publicly say nothing, or something. If the decision is to say something, a defendant will often leave it at “we disagree”, and maybe add “we’ll defend this claim in court.” But, instead of simply saying “we disagree”, the Disney spokesperson declared Johansson’s lawsuit to have “no merit whatsoever” (emphasis added), another over-the-top play.

Before commencing a lawsuit, a lawyer has an ethical obligation to determine that the case has a degree of merit.[3] A lawyer may not ethically bring a lawsuit that the lawyer knows, or would know from appropriate investigation, to be totally lacking in merit. By saying, however, that Johansson’s carefully written lawsuit has “no merit whatsoever”, Disney has plainly accused Johansson’s counsel of being unethical. Moreover, the studio has implicitly accused Johansson, by association, of lacking ethics herself, or of not having sufficient knowledge or ethics to hire an ethical lawyer.

Johansson’s Brand

Disney is in the brand business, and they’re great at it. They understand their brands and the brands of others. And it’s fair to say that their attacks on Johansson’s character, art, ethics and competence are a direct attack on her brand.

Asymmetric Warfare: Non-Disparagement

The complaint that Johansson filed is carefully written and, from what I’ve seen, her lawyer’s statements outside of court have been measured. She is taking a position in a commercial dispute. One can agree or disagree with her position, or reserve judgment.

Instead, Disney has directly disparaged Johansson’s character and brand.

Film and TV contracts typically include a provision that the artist won’t disparage the studio or network. If there’s such a clause in Johansson’s contract, Disney is treating it as one-way. Disney’s public statement shows that, in their view, they remain free to disparage artists who disagree with them.

Asymmetric Warfare: Confidentiality

Johansson didn’t attach her Black Widow contract to the complaint. While there’s no requirement that a plaintiff do so, a typical provision of film and TV contracts is that the artist will maintain the confidentiality of deal terms.

If there’s such a provision in Johansson’s contract, Disney is, again, treating it as one-way. They have publicly stated her floor compensation on Black Widow to be $20M. In Disney’s view, the studio is apparently free to dox artists’ deal terms.

Kayfabe

“Kayfabe”, the structuring principle behind professional wrestling, has been used to explain conflict in other contexts as well, ranging from academia, to politics, to diplomacy, and beyond. In professional wrestling and other performative milieus, “kayfabe” refers to a careful layering of falsehoods and reality, whereby each putative fighter is actually allocated a role – typically, hero or villain – in a scripted “promotion.” In a “true” kayfabe contest, there are no “true” winners or losers.[4]

It’s possible to see Disney’s management of its dispute with Johansson as the hyperbolic staging of a fight intended to draw viewers into the main attraction – which, of course, is the Disney+ service. In this staging, Disney is the champion of the “everyman”, the hapless consumer who just wants to safely watch a movie at home, against a privileged elitist, a would-be princess now approaching the age at which, in Disney movies, female stars sometimes move on to a second life playing witches. In other words, Disney’s PR strategy is arguably to create a resonant but ultimately fake sideshow designed to promote the company’s turn to streaming.

Streaming Data

Streaming activity on Disney+ is now a source of key film and TV consumer data for the parent company. Undoubtedly, Disney carefully monitors subscriber acquisition and maintenance via data categories such as first movie or series watched by new or previously inactive subscribers.

Disney’s PR team very likely monitored any boost in customer behavior on Disney+ and other public sentiment tied to their July 30 attack on Johansson. Indeed, it would be PR malpractice for them not to “socially listen” in this way. On the other hand, the uptick in search interest, as reported by Google Trends, went to Johansson.[5] Google searches for Disney+ and Black Widow in the same time period did not show a similar uptick.

The Long Term Trend

For Disney, the long-term trend is to move sources of film and television revenue from third party platforms, such as movie theaters, pay television services, home video retailers and broadcasters, to owned platforms, such as Disney+. By necessity, the upside from third party platforms is shared between Disney and the platform; by contrast, Disney+ subscriber fees belong 100% to Disney.

Historically, the flow of revenue from third parties has allowed for tracking of revenue to specific productions and, ultimately, to beneficial revenue sharing arrangements for high level participants. Johansson’s sharing formula for Black Widow, for example, is tied to theatrical box office – a third party platform with published results.

To the extent that sources of revenue move to owned platforms, not only are studios like Disney able to keep more revenue vis-à-vis third-party platforms as a whole but, potentially, vis-à-vis talent as well. In Johansson’s case, the swing, per sources cited by the Wall Street Journal, may be more than $50 million.

Multiple Choice Test, Revisited

Returning now to the multiple choice test, was Disney’s attack on Scarlett Johansson a tone-deaf blunder, a rogue act of an overly aggressive PR team? Disney is arguably the most sophisticated brand manager in entertainment. Press statements like Disney’s aren’t the work of freelancers; they are undoubtedly cleared ahead of time in multiple departments and at multiple levels. And the Disney statement seems crafted. So, no, the answer cannot be A.

Was the attack an exercise in “kayfabe”, a careful promotion of a staged conflict – staged at least insofar as Disney is concerned – but presented as genuine? It may be, especially if, in this drama, Disney’s assumed persona of attacker benefits the studio in other talent fights. But conscious assumption by Disney of a mixed hero and villain role – retributive attacker! – would seem dissonant for a brand which eschews irony. No, kayfabe, while intriguing, doesn’t feel like a wholly satisfactory explanation.

The better explanation, I think, is that Disney’s attack on Johansson is a bold step intended to transform talent relations and profit participations as we know them. It’s an act not of litigation but of war. Here, the immediate attacks on Johansson’s character, art, ethics, competence and brand, and the choice of asymmetrical weapons such as doxing and disparagement, seem inspired not by the Age of Enlightenment but by a theory of shock and awe. And there may be enough at stake in this case, and others like it, to motivate folks at “the happiest place on earth” to seek a decisive end to the revenue participation paradigm.

[1] https://www.indiewire.com/2021/07/scarlett-johansson-sues-disney-black-widow-streaming-1234654389/

[2] https://www.newsweek.com/what-scarlett-johansson-has-said-about-actors-making-political-remarks-1579248

[3] See, for ex., https://www.abajournal.com/magazine/article/election-fraud-cases-highlight-ethics-rules-on-baseless-complaints

[4] This video for an entertaining explanation of kayfabe https://www.youtube.com/watch?v=SZpBvfBxLxc

[5] https://trends.google.com/trends/explore?date=today%201-m&geo=US&q=Scarlet%20johansson

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Ezra Doner is an entertainment and copyright lawyer who focuses on the film, TV and other content sectors. He is based in New York and is admitted to practice in New York and California. He does not represent any of the parties in this case.