Why Disney’s ‘Free Guy’ Will Be on HBO Before It’s On Disney Plus

When Disney announced during its quarterly earnings call in May that “Free Guy” and “Shang-Chi and the Legend of the Ten Rings” would be the studio’s first exclusive theatrical releases (with a shortened, 45-day window) during the COVID pandemic, CEO Bob Chapek said it was based on “recent signs of increased confidence in moviegoing.”

But on Thursday, during the company’s most recent earnings call with Wall Street analysts, Chapek confirmed Disney actually has no choice but to release “Free Guy” in theaters exclusively. The film, starring Ryan Reynolds as a background video game character, is also part of the longstanding output deal between 20th Century Fox and WarnerMedia that call for Fox’s theatrical releases to have their first pay window on HBO.

Fox has had a movie output deal with HBO for 40 years. The most recent extension struck in 2012 — years before Disney acquired 21st Century Fox — extended the partnership through early 2022. There’s little doubt that Disney’s theatrical slate will be earmarked for Disney Plus after that.

Chapek addressed this issue when asked by an investor why, with the rapid spread of the Delta variant continuing to depress box office, Disney wasn’t also putting “Free Guy” on Disney Plus Premier Access, as it had with its other summer releases “Jungle Cruise,” “Black Widow,” and “Cruella.”

“We acquired [‘Free Guy’] under a different distribution assumption and set of agreements,” Chapek said. “We don’t have the degree of freedom to do [a Premier Access release] on ‘Free Guy.’ “

In other words, Disney is contractually barred from releasing “Free Guy” on Premier Access and in theaters at the same time.

It’s unclear whether “Free Guy” will follow the old-school trajectory for a theatrical film — moving to DVD/Blu-ray and digital purchase and rental before the pay one window — or whether it would jump direct to HBO, and therefore HBO Max, as has become more commonplace in the emerging streaming era. The former would provide Disney with more immediate revenue opportunities, but further prolong when “Free Guy” could begin streaming on Disney Plus. A spokesperson for Disney said the company has not “confirmed anything beyond the theatrical date at this point” for “Free Guy.”

Whatever post-theatrical life is in store for “Free Guy,” it won’t be alone: Disney’s 20th Century Studios films for 2021 — the animated film “Ron’s Gone Wrong,” Ridley Scott’s period drama “The Last Duel,” and Steven Spielberg’s musical “West Side Story” — also will be covered along with any theatrical releases that come through the early 2022 expiration of the contract term.

There is also the irony that Disney is avoiding violating its contract with a rival studio by giving “Free Guy” an exclusive theatrical release while embroiled in a public fight with Scarlett Johansson over practically the same issue, something Chapek addressed obliquely in the Q3 call as well. (A representative for Johansson did not respond to a request for comment.)

As for “Shang-Chi,” Chapek said he saw the Marvel Studios film as “an interesting experiment” for the company to test out the 45-day window for one of its top tier titles. Taking “Shang-Chi” to Disney Plus immediately after a 45-day theatrical run, Chapek said, would provide the studio with “another data point” to further refine their release strategy moving forward.

But Chapek also struck a regretful note about the decision to put “Shang-Chi” in theaters.

“That title was planned on being in a much more healthy theatrical environment,” he said.

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