Scarlett Johansson's Lawsuit Claims Disney's Tactics Hurt 'Black Widow' Box Office

22 May 2024

Periwinkle Entertainment, Inc. v. The Walt Disney Company Court Filing retrieved [redacted] is part of HackerNoon’s Legal PDF Series. You can jump to any part in this filing here. This part is 8 of 12.

E. Marvel’s Breach is the Direct Result of Disney’s Tortious Interference

37. Why would Disney forgo hundreds of millions of dollars in box office receipts by releasing the Picture in theatres at a time when it knew the theatrical market was “weak,” rather than waiting a few months for that market to recover? On information and belief, the decision do so was made at least in part because Disney saw the opportunity to promote its flagship subscription streaming service using the Picture and Ms. Johansson, thereby attracting new paying monthly subscribers, retaining existing ones, and establishing Disney+ as a must-have service in an increasingly competitive marketplace. Ms. Johansson, and the express promises that Marvel had made to her concerning WWBO bonuses and a “traditional” theatrical release “like our other pictures,” were simply collateral damage. By interfering with the Agreement and inducing Marvel to breach it, Disney not only increased the value of Disney+, but it also intentionally saved Marvel (and thereby itself) what Marvel’s itself referred to as “very large box office bonuses” that Marvel otherwise would have been obligated to pay Ms. Johansson.

38. Disney unquestionably understood how it would benefit from inducing a breach of the Agreement. When he announced the release of another Disney film, Mulan, on Disney+ Premier Access, Mr. Chapek noted that “under a premiere access offering, not only does it get us revenue from our original transaction of [Premium Video on Demand], but it’s a fairly large stimulus to sign up for Disney+.”

39. Moreover, Disney knew that the availability of the Picture on Disney+ would dissuade a number of would-be moviegoers, including many would-be repeat moviegoers, from paying to see the Picture in theatres. When Disney first announced its plan to release the Picture on Premier Access, no less than the New York Times described it as “a move that will likely hurt cinemas (lower ticket and concession sales) while helping Disney (higher streaming revenue).” Similarly, one Hollywood trade journal opined on January 11, 2021 that “it’s insurmountably more challenging for a film the size and scale of ‘Black Widow’ to become profitable without a traditional theatrical window.” On June 10, 2021, one month before the release of the Picture, another prominent Hollywood trade journal reported that with respect to Disney’s day-and-date strategy, “[t]he whole game now is to bring subscribers into the Disney+ ecosystem and keep them there,” and that this “has been damaging for talent” who are compensated by sharing in the box office receipts from a film. Just as these news outlets predicted and Ms. Johansson feared, the Picture’s box office receipts for its opening weekend were significantly below the opening weekend performance of Marvel’s previous films and have “suffered [a] steeper-than-normal decline[]” since then. In short, Disney’s strategy to lure viewers away from the theatres and toward Disney+ worked.

40. There can be no doubt that Disney’s conduct was knowing and intentional. Indeed, as recently as March 1, 2021, Mr. Chapek publicly acknowledged that shortening or eliminating the standard exclusive theatrical window could “cut the legs off a theatrical exhibition run.” Yet he and Disney have done just that, notwithstanding (and in disregard of) Marvel’s contractual promises.

41. This negative impact upon traditional WWBO receipts is exacerbated by the Disney+ Premier Access model, which will allow viewers who pay the Premier Access fee to rewatch the Picture an unlimited number of times so long as they remain subscribed to Disney+.

42. Traditionally, if a moviegoer enjoyed a film enough to see it a second time, he or she would have to either buy another theatre ticket or wait to buy the film on home video, electronic-sell-through (iTunes), or some other form of distribution after the theatrical window concluded. And historically there was no shortage of Marvel superfans willing to do so. Indeed, movie-ticket service Fandango announced that in the first week alone, Avengers: Endgame saw 85% more repeat viewers than Avengers: Infinity War. Marvel itself has banked on these repeat viewers in the past, having re-released Avengers: Endgame with seven minutes of additional footage in an explicit bid to draw in enough additional ticket sales to make the film the highest grossing of all time. In fact, the Guinness World Record for the most times seeing the same film in theaters is held by a Marvel fan who saw Avengers: Endgame 191 times in theatres; the previous record was held by a fan who saw Avengers: Infinity War 103 times.

43. But with Premier Access, there are no repeat ticket sales. Subscribers pay a onetime fee to view the Picture as many times as they want. It is tantamount to handing each moviegoer a free DVD on their way out of the theatre. On top of that, unlike in the theatres, a single Premier Access purchase of the Picture can be shared with tens if not hundreds of would-be paying moviegoers whose ticket buying would have generated WWBO. Still other viewers will forego the theatre and the $30 Premier Access fee because they know they can simply wait what is widely expected to be just 90 days to access the Picture on Disney+ through a regular $8 monthly subscription. And millions of others who would have watched in the theatres will instead view the Picture on perfect digital pirated copies—all made possible by Disney’s decision to release the Picture “day-and-date” on Disney+. Indeed, Black Widow was the No. 1 pirated title of the July 19 week, per the news site TorrentFreak. All of this has undermined the consideration promised to Ms. Johansson in her Agreement and ignores Marvel’s recognition that her “whole deal is based on the premise that the film would be widely theatrically released like our other pictures.”

44. Adding insult to injury, Ms. Johansson has spent the last several months fulfilling her own obligation under the Agreement to promote the Picture—and therefore, by association, its release on Disney+. In other words, Disney has enjoyed the benefits of having one of Hollywood’s top actresses promote its wholly owned subscription service at no additional cost to Disney, and with the intended effect of taking money out of that actress’ own pocket.

45. On information and belief, Marvel’s decision to release the Picture simultaneously in theatres and on Disney+ Premier Access—if it can be called Marvel’s decision at all—was the direct result of Disney’s tortious interference with the Agreement. Absent this interference, it was Marvel’s intent and desire to release the Picture exclusively in theatres at a time that would have maximized box office receipts and, therefore, Marvel’s and Ms. Johansson’s profits from the Picture. The only reason Marvel did not wait for a more opportune time to release the Picture exclusively in theatres as intended is because it was induced or forced by Disney to release it dayand-date on Disney+ Premier Access to drive profits to Disney at Ms. Johansson’s expense.

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