The Update Issue: Streaming Wars Prompt Hollywood Lawsuits, Gen Z Flexes Its Corporate Activist Muscle, A Crypto Star Is Born

Making movies available to stream on their theatrical release dates has created a bonanza for lawyers... Entertainment has never been an industry short on lawsuits, but the rapid business-model pivot from showing new movies on a theater screen to making them available in the living room has been a gravy train for lawyers. The first […] Not rendering correctly? View this e-mail as a web page [here](. [Empire Financial Daily] The Update Issue: Streaming Wars Prompt Hollywood Lawsuits, Gen Z Flexes Its Corporate Activist Muscle, A Crypto Star Is Born By Berna Barshay Making movies available to stream on their theatrical release dates has created a bonanza for lawyers... Entertainment has never been an industry short on lawsuits, but the rapid business-model pivot from showing new movies on a theater screen to making them available in the living room has been a gravy train for lawyers. The first wave of litigation was between the theaters and the studios... remember the whole [tiff between theater chain AMC Entertainment (AMC) and media conglomerate Comcast's (CMCSA) Universal Filmed Entertainment]( over – of all things – the animated flick Trolls: World Tour? More recently, we saw Scarlett Johansson, star of the Marvel film Black Widow, sue media giant Disney (DIS) for breach of contract when the company dropped the movie to its Disney+ streaming service as a $30 premium video on demand ("PVOD") title on the same day it hit theaters. Johansson's lawyers asserted that since a large amount of her compensation was indexed to the film's performance at the box office – and her contract guaranteed an exclusive theatrical release – she was owed money. While we don't know the total PVOD revenue for Black Widow, we do know that it did $60 million in PVOD sales on just the first weekend. The film grossed about $50 million less domestically than lower-profile films from the Marvel universe like Doctor Strange and Ant-Man and the Wasp. Looking at it another way, 15 movies from the Avenger universe made $300 million or more at the domestic box office, and many of them were released five or more years ago when ticket prices were cheaper (and it took more tickets sold to get to $300 million). Black Widow stalled out at around $185 million in domestic box office. It's impossible to arrive at a number that would exactly pinpoint what the opportunity cost at the box office was for Black Widow when it released on PVOD concurrently... but it's a safe bet that it was at least $100 million just domestically, plus whatever it missed out on internationally from home streaming. We also don't know the details of Disney's deal with Johansson – what percentage cut of box office revenues she was entitled to – but one person close to the situation told the Wall Street Journal that the move to PVOD could cost Johansson more than $50 million. We've got some misaligned incentives here, as the Journal points out... The suit also notes that annual bonuses for Disney Chairman Robert Iger and Chief Executive Bob Chapek are tied to the performance of Disney+ and cites that as further motivation for putting Black Widow on the service. Disney disclosed in its 2021 proxy that Messrs. Iger and Chapek both received bonuses for the success of Disney+. "In short, the message to – and from – Disney's top management was clear: increase Disney+ subscribers, never mind your contractual promises, and you will be rewarded," the suit said. According to a statement from Disney, Johansson has already earned $20 million from the film, which will likely limit the sympathy she will get from many non-movie stars who hear about this lawsuit. But a contract is a contract, so it's her right to pursue what she believes she is owed. In a spin on the much scrutinized and critiqued dress that ultra-progressive Rep. Alexandria Ocasio-Cortez wore to the gala for New York's Metropolitan Museum of Art (the Met Gala) earlier this month – which had "Tax the Rich" scrawled across the back in bright red letters – comedian Bill Maher offered this (fake) photo of the dress Johansson "wore"... Source: YouTube/Real Time With Bill Maher (HBO) When WarnerMedia made the [decision to drop all its new releases onto its streaming service HBO Max on the same day they hit theaters]( [Warner executives received a mountain of complaints]( and ultimately ended up having to renegotiate many of its talent contracts that were tied to box office receipts. The Journal reports that Warner paid out more than $200 million in such negotiations. However it shakes out with new releases going to streaming in a post-pandemic world, it's clear that the already complex talent agreements that are worked out between agents and studios are going to get even more complicated, in order to anticipate all the contingencies with how a movie might be delivered in the streaming era. As the already contentious exercise of negotiating studio deals gets even more intense in the digital age, it's not shocking that we saw consolidation in the talent agency space yesterday... Creative Artists Agency ("CAA") snapped up smaller agency ICM Partners ("ICM"). As the New York Times' Dealbook noted, "Talent agencies are competing with entertainment Goliaths as much as with other agencies." The deal, if completed, will leave Hollywood with just two big agencies: the CAA-ICM tie-up, and Endeavor (EDR), the product of a merger of William Morris with the predecessor Endeavor, which went public in April of this year. CAA now will have to deal with the anti-trust regulators... as well as Disney, on Johansson's behalf. --------------------------------------------------------------- Recommended Links: [Why the FBI demanded to speak to this stock analyst]( If you've never heard about the Alpha Profit Code, it's critical that you learn about it as soon as possible. The minute you do, you'll understand how this little-known investment technique has produced gains as high as 816%... 1,560%... even 2,247%. [Click here for the full story](. --------------------------------------------------------------- [The Big EV Story Everyone's Missing]( While investors are obsessed with Tesla's surge, legendary investor Whitney Tilson says an even bigger EV story will provide the highest gains. [Click here to learn more](. --------------------------------------------------------------- Over at the real Met Gala, Billie Eilish, the wildly popular 19-year-old singer, flexed her Gen Z socially conscious muscle... The pop star was the youngest person ever to co-chair the event, which is – in the words of the Times – "fashion's version of the Super Bowl." Designers vie to dress celebrities as arrival pictures taken at the event are shared widely via both social and traditional media. Dressing a popular celebrity for the event is publicity that money can't buy. Red carpet stalwart Oscar de la Renta wanted to dress Eilish... but she had a demand before agreeing to wear a dress from the design house: stop selling fur. As the Times explains... Oscar de la Renta will terminate all fur sales at the urging of Ms. Eilish, who is a vegan and animal rights activist. [Creative Directors] Mr. [Fernando] Garcia and Ms. [Laura] Kim haven't used fur in their designs for a few years now – ever since they told Alex Bolen, the brand's chief executive, that they didn't find fur chic, modern or relevant. Mr. Bolen disagreed, he said, but told them it was fine to stop using fur on the runway. The company still sold fur products in stores, however. While declining to provide figures, Mr. Bolen said fur made up a "meaningful amount of sales and profit" for Oscar de la Renta. The Times notes that CEO Bolen had been lobbied by his own wife – a fashion executive at the company, and his mother-in-law, Annette de la Renta (widow of Oscar) to stop selling fur... but it was the young Eilish who ultimately forced the point. The bet paid off as Eilish's image was everywhere in the days after the gala, and she – and the brand – won many best-dressed polls... Source: New York Times I've been writing a lot about [environmental, social, and governance ("ESG") investing]( and Eilish's ability to force corporate change is a great allegory of the how the younger generations – millennials and Gen Z – think differently about consumerism and sustainability as well as corporate responsibility. Eilish strong-arming a company that was founded 36 years before she was born into making a corporate change was a very Gen Z thing to do... but also something we will see a lot more of. As the financial clout of millennials and Gen Z continues to grow, expect to see more demands made by them of the companies that these folks frequent. You may not like it, but the new socially minded consumer is here to stay... and only growing more and more influential. Finally, in yet another reminder that no matter how well you are doing trading stocks in 2021, you're probably underperforming those with the foresight to just stick their money in crypto at the beginning of the year... Even with a sizable pullback from its April highs, bitcoin is up 44% year to date, trouncing the S&P 500 Index's 16% gain over the same time frame. Other cryptocurrencies are doing even better... For example, ethereum is up almost 300% in 2021. It's frustrating for those of us on the sidelines, so the story of crypto's latest trading star will add insult to injury... News site Business Insider reports that a German hamster named Mr. Goxx has boasted a 24% return in crypto since he began trading on June 12. Mr. Goxx sits in box and his trading decisions are determined by his movements... When he runs on his wheel, it picks which of 30 cryptocurrencies to trade. His choice of either of two possible tunnels to run through yields a "buy" or "sell" decision. Here's an illustration of his setup... Source: Business Insider You can see his impressive performance here... Source: Business Insider No word yet on the minimum investment required to get into Mr. Goxx's imminent hedge fund... but given the average lifespan of a hamster is less than three years, prospective investors may want to opt for a shortened due diligence period. In the mailbag, more thoughts on the labor shortage plaguing U.S. employers seeking workers... Do you think today's young people are really holding companies to a higher standard of philosophical alignment? Or are higher levels of idealism and moral outrage merely enduring characteristics of younger generations more generally... and ones that go away as one ages and gets more jaded? Or could this youth-led corporate activism merely be a sign of the divided times? Share your thoughts in e-mail to feedback@empirefinancialresearch.com. "An old phrase – Necessity is the mother of invention. Hopefully a lot of the people who are out of work are working on being inventors or entrepreneurs because reality is going to hit them in the face. There will be a lag time between federal benefits being cut and people getting off the couch. All the reasons you mentioned – housing costs/transportation costs/safety – are a factor." – R.F. "In the U.K., staff in hospitality businesses are on zero hour contracts, if they are on any contract at all, and get treated badly. At short notice, you can be told not to come in today... and due to the covid regulations, you have to clean the cafe/bar/restaurant thoroughly after you close. For my son working in a bar this summer, that meant he got paid minimum wage but only until they closed and nothing for cleaning the place afterwards. Sometimes he was there for 2 hours after his shift was supposed to finish. "He also had to wear a mask, which he hated, and it did make his skin sore. Customers were quite rude either being paranoid about disease or fed up with the regulations, etc. "In conclusion, the whole experience was horrible, and he left and will never go back to that working environment. If businesses continue to offer working at home for even one day a week, that is a more attractive proposition to many, especially the younger generation who find the concept of commuting bizarre in the age of the Internet. Why commute when you can work from your bed." – David A. Berna comment: David, it should be illegal to make employees punch out before spending time – even hours! – cleaning up. I think it is illegal here in the U.S., and probably in the U.K. too. But I'm also sure what happened to your son with the unpaid work happens all the time, both here and there. I agree with your broader points about no minimum guarantee on hours worked and difficult customers making hospitality jobs very unattractive to those who have the option to do something else. These negatives – along with the great requirements of reopening from a standing start – are why staffing problems are particularly acute in the hospitality industries. "How do out-of-touch millionaire slumlords expect $12.00 per hour workers to pay $700 to $800 – or more – for rent?" – Scott G. Berna comment: Scott, I agree that the unsustainable relationship between rents in large metro areas and prevalent hourly wages is contributing to labor shortages, as more and more people are looking to move to places where their work adequately provides for housing costs. Regards, Berna Barshay September 29, 2021 If someone forwarded you this e-mail and you would like to be added to my e-mail list to receive e-mails like this every weekday, simply [sign up here](. © 2021 Empire Financial Research. All rights reserved. Any reproduction, copying, or redistribution, in whole or in part, is prohibited without written permission from Empire Financial Research, 601 Lexington Ave., 20th Floor, New York, NY 10022 [www.empirefinancialresearch.com.]( You received this e-mail because you are subscribed to Empire Financial Daily. [Unsubscribe from all future e-mails](