Top three movie theater chains urge California to settle Paramount lawsuit in win for David Ellison
All three of the nation’s largest movie theater chains are now urging California to settle its antitrust lawsuit against Paramount’s mega merger with Warner Bros. Discovery — a win for Paramount boss David Ellison.
Cinemark on Tuesday became the latest major theater operator to toss its hat in the ring, after AMC Theatres and Regal Cinemas previously backed the $110 billion Paramount-WBD merger.
“We collectively benefit most when all stakeholders work together in pursuit of shared industry objectives, including creating and releasing compelling films, attracting audiences to theaters and fostering long-term growth,” the country’s third-largest theater chain said in a statement.
“To that end, we join those who have recently called for an expedited resolution of the proposed Paramount Skydance and Warner Bros. Discovery merger as prolonged uncertainty runs the risk of diverting time and resources away from achieving these priorities.”
Theater chains rushed to support the deal after several concessions from Ellison, including a pledge to produce 30 movies theatrically each year and keep them in theaters exclusively for 45 days after release. He has vowed to stick to these commitments for at least three years.
It’s also a sign that movie theaters fear a lengthy court battle involving two of Hollywood’s largest studios could do more damage to an industry that is finally showing signs of recovery after the pandemic.
Earlier this month, a judge set a March 2027 trial date for the lawsuit filed by 12 lefty state attorneys general, led by California’s Rob Bonta – a much later date than Paramount had been hoping for. If Ellison isn’t able to reach a settlement with Bonta by Oct. 1, Paramount will be forced to cough up a painful “ticking fee” of $7 million per day until the merger is completed.
But California’s lawyers could have a tougher time making a case against the deal in court after the three major theaters spoke out in support of the merger, since Bonta’s main argument has been that the deal will hurt the film industry.
“Movie theatres rely on competition between Paramount and Warner Bros,” the July 13 complaint filed by state attorneys general said. “Through this competition, theatres incentivize creativity and quality, and they secure competitive prices and terms for themselves and for audiences.”
The lawsuit alleged the combined company will control 30% of movies that have earned $100 million-plus at the box office – ultimately leading to higher prices, lower quality and less content.
Also on Tuesday, Cinema United, the world’s largest movie theater lobbying group led by Michael O’Leary, flipped its stance to support the deal – though it emphasized the need for Ellison to make commitments to the industry.
“For many in our industry, the current environment is marked by disruption and uncertainty. That is why we believe that it is incumbent upon both of you to meet in good faith to discuss a resolution that would provide robust protections and serve the entire industry,” said a letter from Cinema United, which was signed by O’Leary.
O’Leary previously blasted the deal in a letter to members, warning that it would result in fewer films, higher costs and the eventual closure of movie theaters.
AMC Entertainment, the world’s largest theater operator, was the first major chain to endorse the merger in April, while Regal – the second-largest movie theater chain in North America – backed the deal earlier this month.
Together, AMC, Regal and Cinemark account for 60% of movie ticket sales across the country and operate about 1,230 domestic theaters with roughly 16,700 screens, according to data service Boxoffice Pro.
In the meantime, Paramount has remained optimistic about its odds of closing the deal. Ellison has been seeking leverage in his battle with Bonta and New York AG Letitia James, reportedly considering taking the Hollywood studios out of California and moving CBS News headquarters out of the Big Apple.
Behind closed doors, pressure has been mounting within the Democratic Party to keep the studio owner happy. California Gov. Gavin Newsom has privately warned that if the media merger is blocked, it could hurt Hollywood jobs.
Paramount has repeatedly defended the merger, noting it has already been greenlit by the US Department of Justice, as well as regulators in the EU, UK, Australia and China.
The massive deal would combine HBO Max, Paramount+, HBO, CBS, CNN and thousands of movie titles under one company led by Ellison, the son of Oracle billionaire and close Trump ally Larry Ellison.