Last December, Mickey Mouse signed up for AI video. On December 11, 2025, Disney and OpenAI announced a three-year license letting Sora, OpenAI's video app, generate short fan videos using "more than 200 animated, masked and creature characters from Disney, Marvel, Pixar and Star Wars." Disney would also make "a $1 billion equity investment in OpenAI, and receive warrants to purchase additional equity." Fans would even be able to watch "curated selections of Sora-generated videos on Disney+." The BBC said the deal "was seen as a turning point for the tech industry and Hollywood."
Then, on March 24, OpenAI said it was shutting Sora down. The BBC reported Sora made $1.4 million in global net in-app revenue since launch, citing Sensor Tower, compared with $1.9 billion for ChatGPT over the same period. A Disney spokesperson said, "we respect OpenAI's decision to exit the video generation business and to shift its priorities elsewhere." The company added that it "will continue to engage with AI platforms to find new ways to meet fans where they are," per Deadline. Deadline also quoted a Disney insider: "The deal is not moving forward." Deadline also reported that, as far as it had heard, "no actual money changed hands as the deal was never finalized."
How does a billion-dollar deal just stop? A clue was in the original press release.
Takeaway #1: Announced isn't the same as signed
FROM THE PRESS RELEASE
"The transaction is subject to the negotiation of definitive agreements, required corporate and board approvals, and customary closing conditions."
What it means for you. Read that sentence twice. It says the long-form contracts hadn't been negotiated yet. What the companies announced was the deal they intended to make. Until definitive agreements are signed and the conditions are met, either side can usually walk away, and depending on what was signed, there may be no claim at all.
Big announcements often work this way. A term sheet or a memorandum of understanding sets out the headline terms: the price, the scope, the length. The definitive agreement is where the hard parts live: approvals, exclusivity, what happens if the product shuts down.
The release did spell out one limit worth noting: "The agreement does not include any talent likenesses or voices." Characters, costumes and props, yes. Actors' faces and voices, no.
That's the quiet power of a deal that isn't final. It can end without a fight, because there may be nothing binding to fight over. For a creator, the same lesson scales down nicely.
Your move. When a brand announces a partnership with you, ask what's actually signed. Don't spend the money, turn down other offers or tell your manager it's done until the definitive agreement is.
Takeaway #2: How the SEC defines a deal that counts
FROM THE RULE
"For purposes of this Item 1.01, a material definitive agreement means an agreement that provides for obligations that are material to and enforceable against the registrant, or rights that are material to the registrant and enforceable by the registrant against one or more other parties to the agreement, in each case whether or not subject to conditions."
What it means for you. Public companies generally must file a Form 8-K when they enter "a material definitive agreement not made in the ordinary course of business." The SEC's test is about enforceability. Does the document create obligations someone can enforce? A press release about a deal still being negotiated doesn't, on its own.
Notice the last phrase, too: "whether or not subject to conditions." A signed, binding contract can still have conditions, like board approval, and still count. What matters is whether the core promises are binding. The devil is in the details, and here the detail is the difference between "we agree" and "we agree to negotiate."
Your move. If you're signing a letter of intent, ask your lawyer to mark clearly which parts are binding (confidentiality, exclusivity, costs) and which aren't.
Sample wording (our illustration): "Except for Sections 5 and 6, this letter is not binding, and no party is obligated until a definitive agreement is signed."
And always remember, don't sign it till you read it, my friends.
General information, not legal advice. Reading this doesn't create an attorney-client relationship. Ask your own lawyer what's binding in any deal you sign.
Sources
- The Walt Disney Company press release, 'The Walt Disney Company And OpenAI Reach Landmark Agreement To Bring Beloved Characters From Across Disney's Brands To Sora', Dec 11, 2025
- Deadline, 'Disney's $1B Investment In OpenAI DOA As Sam Altman Pulls Sora Plug', Mar 24, 2026
- BBC News, OpenAI shuts down Sora video app, Mar 25, 2026
- SEC Form 8-K, Item 1.01
