The one Disney film label not named in Disney’s policy update is Touchstone, which it uses to release PG-13 films from DreamWorks under a seven-year distribution agreement.
Disney also maintains a $250 million loan facility for DreamWorks. In effect, then, Disney and DreamWorks enjoy a deal structure common among the major studios: the major studio finances, markets and distributes a film made by a production company.
Other major studios’ tobacco depiction policies also exempt distribution deals. This gives studios flexibility to allow smoking in films from producers who make money for the studios. Data in recent years suggest all the major studios have given "rainmaker" producers a smoking pass.
This loophole echoes a claim put forward by the major studios early in the movie smoking controversy: as mere distributors of another’s product, the studios have no real say over the product. They are just distributors and movies are plumbing parts.
A former studio attorney confirms to us that this claim is absurd. In fact, major studios exercise ultimate contractual authority over every aspect of the films they develop and market. It's their money and money talks.
Covert subsidies to the production company from a tobacco agent, in cash or kind, like any third-party financing, inherently reduces the studio’s own financial exposure and speed its break-even on the film.
(Studios that say they don't cut tobacco placement deals at the corporate level, but ignore deals cut elsewhere in the production chain, are retaining the same loophole.)
Disney’s omission of Touchstone from its updated policy — exempting the only Disney film label that has released youth-rated films with smoking in the past five years — means that this policy cannot yet be treated as exemplary.
Update: Disney's distribution agreement with DreamWorks lapsed in August 2016. Since October 2016, DreamWorks has worked out of Universal Studios (Comcast).