Legal and Reputational Risk Management in Entertainment: Navigating the 2025 Landscape

The entertainment and production industries are no strangers to legal turbulence. In 2025, a wave of high-profile litigation and public scrutiny has reshaped how investors assess risk, with cases like Scarlett Johansson v. OpenAI and Paramount v. Barry Tubb illustrating the profound financial and reputational stakes. These disputes highlight a critical shift: legal and reputational risk management is no longer a peripheral concern but a core determinant of brand value and investor confidence.

The AI Dilemma: Scarlett Johansson v. OpenAI

Scarlett Johansson's lawsuit against OpenAI over the unauthorized use of her voice in an AI assistant named Sky has become a cultural flashpoint. The case underscores the ethical and legal ambiguities of AI-driven content creation. Public perception surveys from 2025 show a 12% decline in consumer trust in AI voice technologies post-incident, with 68% of respondents expressing concerns about identity replication without consent. Legally, the case draws from precedents like Midler v. Ford (1988), where courts ruled against the unauthorized imitation of a celebrity's voice. If Johansson prevails, it could establish a binding precedent for stricter AI licensing protocols, forcing companies to invest in consent-based frameworks.

From an investor perspective, the fallout has been nuanced. OpenAI's valuation, while still robust, saw a 7.5% dip in Q3 2025 following the lawsuit, reflecting market unease. reveals volatility linked to regulatory inquiries and public backlash. Investors now scrutinize AI firms for ethical governance, with ESG scores becoming a key metric. For example, competitors like Anthropic and Anthropic's parent company have seen their stock outperform OpenAI by 18% in 2025 due to proactive transparency measures.

Legacy Franchises and Contractual Entanglements: Paramount v. Barry Tubb

Paramount's legal battle with Barry Tubb over the unauthorized use of his 1986 Top Gun photo in Top Gun: Maverick (2022) highlights the complexities of legacy content. Tubb's breach-of-contract claim, tied to Screen Actors Guild agreements, has kept the case in legal limbo. While Paramount's anti-SLAPP motion initially favored dismissal, a 2025 court ruling allowed Tubb to amend his claim, introducing uncertainty.

This case has had a muted but telling impact on Paramount's stock. shows a 4% dip in Q1 2025 amid the lawsuit's escalation, though the stock rebounded after the film's $1.5 billion box office success. However, the broader message is clear: investors now demand clarity in legacy rights management. Studios that fail to address contractual ambiguities risk reputational damage and litigation costs that erode margins.

Broader Implications: A Sector in Transition

The 2025 litigation landscape extends beyond individual cases. Netflix's defense of Squid Game against a copyright infringement claim and TikTok's Supreme Court battle with the U.S. government illustrate the sector's exposure to global regulatory shifts. These cases have prompted a 20% increase in legal reserves for major studios in 2025, according to industry reports.

Public perception is equally critical. A 2025 Harvard Business Review study found that companies with poor governance on AI and IP issues experienced 15% higher stock volatility compared to peers with robust risk frameworks. For instance, Disney's stock outperformed Warner Bros. Discovery by 22% in 2025, partly due to its early adoption of AI ethics guidelines.

Investment Advice: Prioritize Legal Preparedness

For investors, the 2025 experience offers three key takeaways:
1. Scrutinize ESG Metrics: Companies with transparent AI policies and strong contractual governance (e.g., Disney, Netflix) are better positioned to weather legal storms.
2. Monitor Regulatory Developments: The potential for federal AI laws, such as the FAIR Act, could reshape liability landscapes. Firms like Microsoft and Google, which have lobbied for regulatory clarity, may gain a competitive edge.
3. Assess Reputational Resilience: Public perception surveys and social sentiment analysis should be part of due diligence. A 2025 survey by Nielsen found that 73% of consumers prefer brands that address ethical concerns proactively.

Conclusion

The 2025 legal and reputational crises in entertainment underscore a paradigm shift: investors must now view legal risk as a strategic asset. Companies that invest in ethical AI frameworks, transparent contracts, and proactive public relations will not only mitigate litigation but also enhance brand loyalty and investor trust. As the sector evolves, those who treat risk management as a competitive advantage will lead the next wave of growth.