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» Film-Tech Forum   » Operations   » Ground Level   » Landmark Theatres Sues Regal, Claims Chain Has Stranglehold on Movies in D.C.

   
Author Topic: Landmark Theatres Sues Regal, Claims Chain Has Stranglehold on Movies in D.C.
Rick Raskin
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With the opening of Landmark Theatres' Atlantic Plumbing location last October—the latest opening in D.C.’s current and future cinema boom—friendly competition among the District’s movie theater chains seemed inevitable. Apparently, it's not so friendly.

Yesterday, Landmark filed suit in federal court against Regal Cinemas—the largest movie theater circuit in the country—alleging that it holds a monopoly in showing first-run commercial movies in D.C., something detrimental to Landmark's success in the District, specifically at its new Atlantic Plumbing theater.

According to the lawsuit, which singles out Regal’s Gallery Place theater, “Regal has used its national circuit power, its dominant presence in the greater D.C. area, and its monopoly power in the relevant markets to coerce film distributors to deprive Landmark, its competitor in the relevant markets of fair competitive access to commercial films to exhibit to the public at its competing theater, all as a means of perpetuating and enlarging its circuit power and monopoly power in the relevant markets and of insulating itself from competition on the merits.”

Landmark, primarily, is an indie theater chain that typically programs smaller indie and foreign films that wouldn’t normally play at Regal Cinemas (hence why this lawsuit has never come up before, even with Gallery Place's close proximity to Landmark’s E Street Cinema). But with its new, lush Atlantic Plumbing theater, Landmark says they want to program “desirable, commercial, ‘first run,’ feature-length motion pictures” and that Regal’s monopoly power makes it so that exhibitors won’t license the film rights to them for screening within the market.

For filmgoers looking to see new commercial films in that market, which the lawsuit describes as the “District Core” (basically, downtown D.C. and the surrounding Northwest neighborhoods), the only option is Regal Gallery Place. But Landmark’s Atlantic Plumbing theater wants to be that second option for filmgoers, and one that it says is far more desirable than Regal’s Gallery Place theater.

The suit details poor consumer experiences at Gallery Place as “typical,” highlighting “long ticket and concession lines, large, loud, and unpleasant crowds (including teens and children) that can destroy the movie-going experience, a virtually constant police presence, sold-out shows, exorbitantly priced concessions, ticket price surcharges/fees, bag searches, dirty bathrooms, and standard (non-plush/oversized seatings.” The lawsuit goes on to list specific examples of consumers' reports: “When seeing comedies, there tends to be a disproportionately huge number of annoyingly whooping, talking, and texting teens;” “Two out of three times, someone will be in there w[ith] their crying baby, loud kids shouting… or on the phone during the movie.”

Meanwhile, with its reserved seating, 40-seat bar, and swanky lounge area that resembles a “a tricked out Restoration Hardware ad," the Atlantic Plumbing theater is attempting to cater to different filmgoing crowd. But Regal’s alleged monopoly on commercial films is making it hard for Landmark to program its Atlantic Plumbing theater the way it wants to.

According to the lawsuit, Landmark sought the licenses to show films such as Star Wars: The Force Awakens, The Hunger Games: Mockingjay, Part 2, Spectre, Burnt, and Our Brand Is Crisis at its Atlantic Plumbing theater, only to have each distributor refuse the license “because Regal’s Gallery Place had demanded an exclusive license for the film and had informed the distributor that it would not play the film at its Gallery Place theater if the film were licensed to Landmark’s Atlantic Plumbing theater."

Additionally, in the few cases where Landmark was granted the license to show commercial films at Atlantic Plumbing–for Steve Jobs, Love the Coopers, and Miss You Already—Regal allegedly refused to play the films at Gallery Place, the suit claims.

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Martin McCaffery
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Just so we know Landmark is not without sin:
Washingtonian

Former West End Cinema Owner Says Landmark Theatres Is Suing Regal Over What It Did to Him

By Benjamin Freed on January 29, 2016

When Josh Levin, who operated the West End Cinema at M and 23rd streets, Northwest, read Landmark Theatres’ lawsuit this week against Regal Entertainment claiming the Gallery Place movie theater is keeping big-ticket films out of Landmark’s new theater in Shaw, he says it felt like a bad remake of a movie he’d seen before.

“It was like reading the story of my life with the names changed,” says Levin, who ran West End Cinema from 2010 to 2015 before it went out of business. “That behavior [Landmark is] claiming with Regal they were the perpetrators of with West End and other independent theaters.”

In its suit, filed Tuesday in DC’s federal district court, Landmark claims Regal is abusing its “clearance” pacts with studios to only distribute major releases like Star Wars: The Force Awakens, Spectre, and The Hunger Games: Mockingjay Part 2 at its 14-screen Gallery Place venue, while Landmark’s six-screen cinema at the Atlantic Plumbing development gets left with the dregs, like the little-seen, poorly reviewed holiday film Love the Coopers. Regal can do this, Landmark argues, because it owns 91 percent of movie-theater seats in what the lawsuit defines as the “District Core” (Northwest DC as far north as Adams Morgan and as far west as Rock Creek Park).

While any movie theater would have little trouble selling out Star Wars, Landmark’s claims of being pushed around by a bigger chain sound a little rich to its often-vanquished competition. The company’s 56 locations across the United States specialize in showing foreign, independent, and prestige studio films instead of effects-driven blockbusters. But that doesn’t mean the company isn’t capable of its own tactics to muscle out competitors, Levin recalls.
“Every single film that Landmark showed at E Street during the five years we were open we were denied,” he says. “It left us without access to the indie and prestige films that had the most commercial viability. We were then picking from the films with the least marketing and advertising support that drew the least amount of awareness and attention. It doesn’t mean they were lesser pieces of art, it meant they were less commercially viable.”

Obtaining “clearances” is one of the oldest practices in the movie-exhibition business: A cinema asks studios to “clear” a market, meaning other theaters within a specified radius can’t show the same titles when they open, or “day and date,” in industry parlance. In a place like New York City, which has a high density of movie theaters, the radiuses might be measured in blocks; a market like Washington will likely have its clearances measured in miles.

Levin says there were “hundreds of films” he wanted at West End while he ran it but Landmark reserved for its E Street Cinema about two miles away, or even its Bethesda Row location nearly ten miles away. “If there was a Weinstein [Company] movie I wanted and it was playing in Bethesda, it would never play in DC,” Levin says.

One film that fell into this situation was The King’s Speech, the Weinstein Company’s Best Picture-winning 2010 drama about King George VI and his dialect coach. The King’s Speech played at Landmark’s E Street and Bethesda locations when it opened nationally Christmas Day, but West End didn’t even get a chance to run it for more than a month. “We would have killed to show that at West End,” Levin says.

West End Cinema struggled along for nearly five years before closing last March. Landmark took over the property and merged its three tiny screening rooms into two auditoriums, where it now runs typical awards-seeking fare. (Currently playing are Academy Award Best Picture nominee Room, Best Actor nominee Trumbo, and a Weinstein Company-produced adaptation of Macbeth.) Through a spokesperson, the Mark Cuban-owned company declined to comment for this article.

“We cannot comment on pending legal matters but the filing speaks for itself,” the spokesperson, Laine Kaplowitz, tells Washingtonian in an email.

Days before Landmark filed its suit in DC, Regal had been ordered to stop clearing parts of Houston, where it had been preventing a multiplex operated by iPic from showing first-run studio films the same time as its nearby venue. A Texas state judge issued a temporary injunction stating that iPic’s theater did not act as “substantial competition” to Regal, which had blocked iPic from screening both prestige movies like The Hateful Eight and mass-audience fare like Ride Along 2. Regal has beaten back lawsuits over the “clearance” issue in other state, though it and its main national rival, AMC Theatres, are defendants in similar cases in multiple states.

As Levin tells it, “clearances” are far more impactful for exhibitors of independent and prestige films than blockbusters like Star Wars. The biggest metric for an indie film’s opening is its per-screen average gross, creating an incentive for the distributor to limit the number of screens. But as Landmark has grown, it has become to small movie-house operators like Levin to what it is accusing Regal of being. Landmark can dictate where studios like Focus Features, Fox Searchlight, and the Weinstein Company distribute their Oscar bait.

“Landmark is small compared to Regal, but in the independent world, Landmark is the bigfoot,” Levin says. “And in the market where they have cinemas, it has been their practice to routinely clear other independent cinemas.”

Levin has not pursued litigation against Landmark over movie clearances, although he says he “had conversations about my legal options” while he was running West End Cinema. And he warns that even with DC’s continuing movie-theater boom—at least three more cinemas, including another Landmark venue on North Capitol St., are scheduled to open in the District over the next three years—Washington film buffs won’t necessarily get more choice.

“It’s like any other business in America,” Levin says. “There’s the constant consolidation, so fewer and fewer curators are picking the pictures audiences can see, and ultimately the real loser is the consumer.”

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Steve Kraus
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What is the relevant case law on this sort of thing? A theatre is like a store selling products obtained from others, no? Is a manufacturer obligated to supply all stores that want to sell their products? If you open a clothing store and wish to sell Polo shirts isn't Polo within their rights to say they are happy with the dealers they presently have?

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Martin McCaffery
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I would imagine it would depend on whether Polo Shirts are franchised. If you have to "join the Club" to sell polo shirts, then that would be the mechanism for limiting outlets.

They tried that with movies, but the Paramount Consent Decree put a stop to it. Movies are supposed to be sold on a title-by-title basis. Setting up clearances and letting the exhibitor dictate which theaters get the films seems to be in violation of this principle.

I, and most other small art theaters, can produce dozens of examples where we outgross the major chains on the same movie, but they are still given first shot at them. Part of that could be delusion on the distributors part (they think every movie is going to be a hit), but after a while, it looks like a suspicious practice.

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David Buckley
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quote: Steve Kraus
If you open a clothing store and wish to sell Polo shirts isn't Polo within their rights to say they are happy with the dealers they presently have?
I think the gist of it is Wallmart saying to Polo "you cant allow any store with 10 miles of a Wallmart to sell Polo shirts". This would be Wallmart using their buying power to force a supplier into behaviour that is bad for consumers.

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Mark Gulbrandsen
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Mark Cuban seems like a lawsuit kinda guy....

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Steve Guttag
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It has been my experience that when the subject of clearances are litigated, the practice tends to held illegal (or illegal enough) that it stops between the parties in the law suit but not such much so that it becomes precedent law. Generally, the big bully backs off out of court. However one does have to spend the money to get the whole lawyer thing involved.

Personally, I think that in this stage of exhibition, clearances are bad and Landmark is as guilty as any in the industry. Claiming Art films are special my have some degree of legitimacy, but competition has a greater claim. Think about it...Landmark could effectively put in any low-rent theatre and then clear the area and deliver the lowest quality show (not saying they do but if clearances are allowed, they certainly could).

However, given the choices between clearances to cultivate a market versus fair competition, at this point, I'll take competition. The sad thing in the DC area is places like the West End (if you knew the theatre) were NEVER a threat to the likes of E-Street...the West End, since day-1 (I was there on or about day-1) was always an econo theatre with screens very tiny and seat counts in the under 100 (conventional seating). Yet Landmark felt the need to clear them? Or the Avalon, DC's oldest operating cinema...the Avalon has a greater potential to give any movie justice than a theatre like Bethesda Row (Landmark) yet Landmark clears them but further up the street, Arclight doesn't.

At this point, I definitely see more harm than good out of clearances. Personally, I'd rather see a bunch of home-grown independents than massive chains serving each area (but that isn't limited to movie theatres).

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Rick Raskin
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I agree with Steve's rationale. I think there is significant reason suspect anti-trust violation, but that doesn't seem to keep the big boys from trying.

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Jonathan Goeldner
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there's a good article in the Washington Post (last Saturday) regarding this

https://www.washingtonpost.com/lifestyle/style/the-nasty-world-of-the ater-clearances-and-why-it-matters-to-filmgoers/2016/01/29/5bc6a540-c5d2-11e5-a4aa-f25866ba0dc6_story.html

as it was pointed out by others here, Landmark shares equal blame. Arclight helped the Avalon get some films that Landmark could have prevented them getting. The Avalon AND AMC Mazza also get the same movies at the same time occasionally, AMC aren't as douchey as Regal (or Landmark) are. Also from a technical aspect - seeing a movie on the Avalon's screen 1 easily trumps any presentation at Bethesda Row - if it's 4K and/or 7.1 sound - I'll be there. Landmark comes across as cheap in not installing 4K projectors or 7.1 sound (the latter is thankfully at Atlantic Plumbing).

Cinemark (Fairfax 14) could also easily sue Regal (Fairfax Corner) for it's "clearing" as well.

The Angelika will more than likely go to battle with Landmark when (and if) it opens it's planned NoMA theater - near it's Pop-Up Union Market theater.

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Jack Ondracek
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A couple of long ones here...

http://www.wsj.com/articles/fox-ends-film-screening-practice-1459379488

Fox ends clearances and independents cheer!

Fox Ends Film-Screening Practice
Studio will no longer honor theaters’ requests to show its movies exclusively

By ERICH SCHWARTZEL
March 30, 2016 7:11 p.m. ET

A controversial practice that has kept some big movies from playing at certain theaters appears headed toward a crossroads, as a major Hollywood studio has told exhibitors it would no longer grant their requests for exclusive screening rights.

Twentieth Century Fox executives have told theater owners in recent days that they would no longer entertain requests for “clearance,” which allows theaters to show a movie exclusively in markets where a competitor is located nearby. It is a rare occasion on which a Hollywood studio has set an official policy on the practice.

“We like to have choices for consumers and we think it will grow the pie,” said Chris Aronson, Fox’s president of domestic distribution.

Fox has told theater owners that its policy change would go into effect with the release of highly anticipated “X-Men: Apocalypse,” which comes out on May 27. 21st Century Fox, which owns the studio, and News Corp, owner of The Wall Street Journal, were until mid-2013 part of the same company.

Clearance affects a small number of the nation’s 40,000 screens, but it has created a major rift in the theatrical business as smaller operators claim they are being denied certain movies that bigger chains want.

Debates over clearance have heated up over the past two years. Several small exhibitors have sued larger rivals over the practice, and the Justice Department’s antitrust division has been interviewing theater executives about it for more than a year. The agency has told theater chains to turn over documents related to the matter, but it is unclear whether a formal investigation is under way. The Justice Department declined to comment.

Fox made the decision in part to “keep us out of any litigation,” said Mr. Aronson.

Studios have the power to grant or deny clearance requests from exhibitors, and often theaters will refuse to play a movie in a market where their request is denied.

Clearance can be requested in markets where larger circuits compete with smaller operators and in places where major chains compete with one another.

Some smaller chains say they have been forced out of business because clearance requests deprived them of so many movies. Houston-based Viva Cinema closed in 2013 after it said it was forced to fill screens with movies like “The Croods” and “World War Z” months after they had left most theaters.

IPic Entertainment Holdings Inc., a smaller movie-theater chain, is suing AMC Entertainment Holdings Inc. and Regal Entertainment Group over the practice. IPic said it couldn’t book several recent titles in some locations, including the Fox blockbusters “The Revenant” and “The Martian.”

AMC didn’t provide updated comment on the iPic case, but at the time of the lawsuit filing last year, an AMC spokesman said, “Allocated film zones have demonstrated benefit to all stakeholders—moviegoers, studios and exhibitors.” Regal representatives didn’t respond to a request for comment.

Regal and AMC, the nation’s largest and second-largest theater chains, respectively, have in the past opted not to show movies in markets where their clearance requests are denied.

“Clearances have been a long-standing industry practice for decades. However, AMC is confident that we will thrive and prosper whether clearances continue or not,” said AMC Chief Executive Adam Aron. The company didn’t comment on how it would specifically respond to Fox’s plan.

By saying it won’t honor any requests as a policy, Fox runs the risk that the biggest theater chains will decide not to show the studio’s movies in some markets.

“That’s their prerogative,” Mr. Aronson said of that possibility, though he questioned whether theaters would really forego big titles. “It’s hard to have revenue if you don’t have product.”

Fox’s decision is the strongest stance taken by a distributor yet, though other studios have shown more reluctance to granting clearance requests as the controversy has heated up, exhibitors say.

Fox’s move could lead to a moment of reckoning on the issue. If other studios follow suit, it could present a new calculus that causes clearance to fade away by virtue of exhibitors needing movies to fill seats.

Fox’s policy change was cheered by exhibitors who have spoken out against the practice.

“The concepts of clearances are antiquated and don’t apply to modern-day society,” said Hamid Hashemi, CEO of iPic Entertainment.

Contributing to Fox’s decision: changing trends in moviegoing. Many major chains have begun retrofitting auditoriums with plush, wide recliners and other amenities. Such upgrades tend to lead to increased attendance even though they can significantly decrease the number of seats.

That reduced capacity means it is harder for studios to grant clearance requests, since they now might need two theaters showing a title to reach the same number of viewers as one traditional auditorium, said Mr. Aronson.

“This business has changed an awful lot,” said Mr. Aronson. “This is a legacy practice and the time has come to move on.”

www.wsj.com/articles/fox-ends-film-scree...-practice-1459379488

National Association of Theatre Owners
1705 N Street NW
Washington, DC 20036

http://deadline.com/2016/03/20th-century-fox-exhibition-clearances-circuit-dealing-1201729061/

Distribs & Exhibs Hold Line On Clearances Despite Fox’s Position Change

In the wake of 2oth Century Fox’s decision to scrap exhibitor clearance requests, most major studios are taking a business-as-usual stance as they continue to yield to one theater in certain competitive zones.

Disney distribution chief Dave Hollis told Deadline today, “As has always been the case, we make any and all decisions regarding clearances based on our best business judgment as to what we consider maximizes the picture.”

Added Sony’s distribution honcho Rory Bruer: “We will make decisions theater by theater, picture by picture and we aren’t looking to change that. It’s our intention to continue to distribute our pictures on what’s right for each film.”

Another studio insider summarized, “Clearances are good for business.”

Despite all the brouhaha that clearances have stirred up with the Justice Department as they investigate Cinemark, Regal and AMC, many studio distribution chiefs say most clearances are mutual; and that the ones we hear about in the press are the few that went sour.

“Most of the clearance fights are smaller chains duking it out among themselves; they’re not battling the big theater chains,” asserted one distribution suit.

Nonetheless, the majors are watching the outcome of Fox’s maneuvers with theater owners as they begin to book X-Men: Apocalypse.

“Fox is trying to be smart about something that is becoming an issue,” said an exhibition insider. “The Justice Department has been involved in these situations with allocated zones and quite frankly the majors have been making haphazard decisions on who they’re clearing. It’s made everyone vulnerable including the distributors.”

Clearances have also been the subject of a major lawsuit against the big chains by iPic. Using Regal as an example, they said the big exhibs threaten boycotts to certain movie studios and their films whenever they also give smaller chains the title to release in the same area. In fact, iPic praised Disney for not buckling under, but others have gone along – specifically in court, they said that Universal, and Sony “capitulated” to what they see as akin to bullying.

“Fox isn’t stupid for doing this (to protect themselves from litigation),” said one theater owner. “While their decision to reject clearances doesn’t reinvent the wheel, it just doesn’t mean that the rest of us are going to ignore our rights for clearance.”

Another theater owner agreed saying, “If the competition is playing the same movie across the street, it’s a theater owner’s prerogative to turn down the film if they want to.” That same source pointed to one of the classic clearance zones in the U.S.: the AMC Empire 25 and the Regal E-Walk, which are directly across from each other on 42nd Street, adjacent to Times Square.

AMC Theatres issued a statement: “Clearances have been a long-standing industry practice for decades. However, AMC is confident we will thrive and prosper whether clearances continue or not.”

Essentially clearances provide a greater playability of product in a specific neighborhood. Clearance defenders say it avoids business being cannibalized for a specific title, plus it permits older titles to hold longer. Given the litigious fight between iPic and Regal over their Houston locations, one studio played the same title at both locations. Essentially business was bigger at the Regal in that instance over iPic.

By no means is anyone expecting Fox’s clearance blockage to impact X-Men: Apocalypse’s box office results, but it does raise more questions. Do second-run houses now have the opportunity to play first-run films? Is an exhibitor allowed to play everything day-and-date? In time all these questions will be sorted out.

Exhibition vet and consultant Rick Roman describes a situation where a clearance-free market would spur theater owners to improve their facilities so as to compete better with one another: “Due to clearances, theatres that are old and run down have survived because they have exclusivity of films. Moviegoers will see a tentpole film just about anywhere but the other films suffer when the theatre is old and run down. Without clearances a new theatre could be built or the old and run down theatre would need to renovate.”

PREVIOUS, THURSDAY, 12:14 AM: While exhibition and distribution were rubbing their chins over Wednesday’s news that the Screening Room is headed to CinemaCon, 20th Century Fox announced in the Wall Street Journal that it’s no longer honoring clearance requests from theater owners.

Clearances are defined as those agreements between a theater chain and a distributor whereby said exhibitor obtains the exclusivity to show first-run movies at its hubs within a certain zone, and thus block any nearby competition from playing the same title simultaneously. The misconception with clearances is that they’re negotiation tactics completely relegated to big chains. However, it’s a two-way street: indie venues request clearances over the big guy all the time.

20th Century Fox says that effective with the May 27 release of X-Men: Apocalypse, it will not honor clearances. One reason, per a Fox distribution suit, is so that 20th Century Fox can stay out of any litigation. Prior to the WSJ story, an owner of a small midwest theater chain phoned Deadline today to tell us about Fox’s latest decision and it wasn’t alarming. Here’s why: Fox already has a history of being consistently fair and equitable, particularly in regards to distribution issues that affect both large and small exhibitors alike. Five years ago I wrote a story about Flagship Theatres’ legal woes with Cinemark’s Century Theaters, and a then-Fox executive specifically told me that they didn’t tolerate circuit dealing: “My company doesn’t make a policy of stiffing the little guy in favor of the big one. It’s in no one’s favor. Besides, the studio decides what is competitive and we’re constantly doing research to analyze the environment and what makes it competitive.”

In this day and age when a film like Disney’s Star Wars: The Force Awakens breaks a slew of records and becomes the highest grossing film of all time at the domestic B.O. with a total $933.9M, major studios can’t afford to acquaint themselves with theaters’ clearance requests since there’s no financial gain in it. When a studio needs a film to be everywhere, it’s everywhere. Also with the different types of movie theaters that exist today from PLFs to restaurant/multiplex combos, Fox believes the consumer should have the right to choose where they’ll see a movie. This puts some pressure on exhibition to provide a better experience than their competition down the street. Generally, in regards to clearances, it’s the smaller distributors who find themselves being strong-armed by big chain requests: They can’t afford to live without big exhibition, especially when they’re trying to cross a successful limited release over to a mainstream audience.

Smaller exhibitors contend that circuit dealing is alive and prevalent. IPic Theaters, a chain of high-end luxury venues-cum-restaurants, sued Regal and AMC Theatres in a Texas district court last fall claiming they were using their market muscle to squeeze out iPic’s Houston multiplex and another one being planned in the Dallas area. IPic says its Houston location was unable to book the first-runs of The Martian, The Revenant, Bridge Of Spies and Steve Jobs because Regal and AMC were bullying the studios.

Despite receiving an appeal in the fall of 2011, Flagship’s case against Cinemark is still ongoing. Since 2002, when Century acquired the River Multiplex in Rancho Mirage, CA, it allegedly cannibalized first-run titles available to Flagship’s 10-screen cinema, The Palme D’Or — owned by Oscar nominee Bryan Cranston; ESPN radio host Steve Mason; Brian Tabor; producer Alise Benjamin-Mauritzson (Ray); and her husband, Andreas Mauritzson — a Palm Desert, CA theater that’s two miles down the road on Highway 111. At the start of their trial, The Palme was shut out from playing Sony’s The Da Vinci Code in 2006, despite offering better terms to the studio than the River. Flagship Palm Desert regularly offered to open films on three screens and guaranteed three months on screen (which The River couldn’t offer) and Sony still accepted lesser offers from Cinemark.

In 2014, 20-theater chain Cobb Theatres went after AMC in a U.S. District Court in Georgia. Cobb said that AMC used its monopoly muscle to block some first-run movies from being screened at an upscale venue in Atlanta suburb, Brookhaven. Though AMC moved to dismiss the case, a federal judge allowed it to proceed. Since the middle of last year, the Department of Justice has been investigating Regal Entertainment Group, AMC Entertainment Holdings Inc. and Cinemark Holdings Inc. in regards to any federal antitrust laws violations. However, per the WSJ, no formal investigation is under way.

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Buck Wilson
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FANTASTIC!!! Good move, Fox!

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Michael Putlack
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I wonder if this applies for Fox Searchlight films as well...

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Paul H. Rayton
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The practice isn't over yet. One prime example of an independent struggling was here in Southern California. According to their lawsuit (we've heard about this before) the Cinemark group is forcing out of business a location near Palm Springs, CA:

quote:
Bryan Cranston's Palme d'Or theater closes amid battle with national chain

April 26, 2016 -- Los Angeles Times

Cinemas Palme d'Or, the specialty movie theater part-owned by "Breaking Bad" star Bryan Cranston, is closing its doors in Palm Desert amid a protracted battle with one of the nation's largest multiplex chains.

The theater said Tuesday it is shutting down after 13 years in business, saying it was squeezed out by what it considers to be anti-competitive practices by Plano, Texas-based exhibitor Cinemark, the third largest movie theater company.

In a statement, Palme d'Or's owners said Cinemark pressured movie studios to keep the indie theater from getting big film titles.

The claim echoes a 2006 lawsuit in which Palme d'Or accused Cinemark of "circuit dealing," an industry practice in which theater chains leverage their size and buying power to prevent distributors from booking movies at theaters owned by their rivals.

Initially dismissed in Los Angeles County Superior Court, the suit later was revived by an appellate court. The case was dismissed again in 2014 in a decision that Palme d'Or has appealed. The company said it plans to continue its litigation, despite the theater's closure, which is set to take effect June 30.

"We have fought hard, but circuit-dealing has made it impossible to stay in business," the owners said. "We have lost millions of dollars because of circuit dealing over the last 13 years, and we intend to win this lawsuit."

In court filings, Cinemark has argued that its business practices are lawful and that the company did not have sufficient strength in the Coachella Valley market to stifle competition.

Cinemark fired back at Palme d'Or in a statement Tuesday that the company does not engage in "circuit dealing" and that the case is "entirely without merit."

Flagship Theatres bought the Palme in 2003 with ambitions to create a destination for cinephiles to see the kinds of arthouse, specialty and foreign films often restricted to the Los Angeles city limits.

Besides the Emmy-winning Cranston, its owners include movie producer Alise Benjamin and radio personality Steve Mason.

But the 10-screen cinema's aims to create a cultural oasis in the desert were overshadowed by its clash with Cinemark, which operated 513 theaters in the U.S. and Latin America as of the end of last year.

The ongoing dispute reflects long-boiling tensions between independent theater owners and big chains.

Smaller chains and mom-and-pop operators have for years complained that their bigger rivals have abused the tradition of so-called clearances, in which chains ask studios for exclusive rights to show a movie within a certain geographic area.

The practice of clearances, which is less expansive than circuit-dealing, has generated controversy as well. The Department of Justice has been investigating the issue to see whether the largest chains have violated federal anti-trust laws.

Cracks in the traditional way of doing business are beginning to surface. Film studio 20th Century Fox said in March that it no longer would honor exhibitors' requests for clearance.

Above article was found here

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Michael Putlack
Expert Film Handler

Posts: 179
From: Fort Collins, Colorado
Registered: Sep 2011


 - posted 05-14-2016 07:22 PM      Profile for Michael Putlack   Author's Homepage   Email Michael Putlack   Send New Private Message       Edit/Delete Post 
Uni going the way of Fox:

quote:
Universal Scraps Exhibitor Requests For Clearances Starting With ‘Warcraft’; AMC To Play In Competitive Zones
by Anthony D'Alessandro
and Anita Busch
May 13, 2016 6:15pm

EXCLUSIVE: “The second domino tumbles!” That’s what one Delaware-based theater owner exclaimed to Deadline today, referring to the news in the exhibition world that Universal has followed 20th Century Fox’s lead in not granting exhibitor clearances, beginning with the June 10 release of the Legendary Pictures title Warcraft. For studios, this is a matter of good business, keeping their hands clean of the calamity that has ensued with the Justice Department’s investigation of Cinemark, Regal and AMC’s circuit dealing in the past.

Per our previous report, there are some major studios out there, namely Sony and Disney, that believe clearances are good for business, particularly when it comes to maximizing revenue for a film. Paramount has a longstanding practice of not honoring exhibition clearances. And even though a studio won’t honor clearance requests, it doesn’t mean that an exhibitor will ignore its right for clearance.

That said, there also has been a change in attitude toward clearances with one major exhibitor: AMC Theatres.

An AMC insider recently informed Deadline that it will begin playing in competitive areas starting with the May 27 release of Fox’s X-Men: Apocalypse. “AMC is accepting Fox’s term and playing X-Men day-and-date,” said our source. What does that mean? It means that AMC will play the Bryan Singer title even if it’s up on a Regal marquee in the same zone. And in fact, X-Men: Apocalypse is currently booked at both AMC’s Empire 25 and the Regal E-Walk Stadium, which are directly across the street from each other on 42nd Street in Manhattan.

(Source )

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Eric Hooper
Jedi Master Film Handler

Posts: 530
From: Fort Worth, TX, USA
Registered: May 2003


 - posted 05-26-2016 01:20 AM      Profile for Eric Hooper   Email Eric Hooper   Send New Private Message       Edit/Delete Post 
Well, this is going to get interesting with theaters across the street from each other both showing X-Men. Seems to me that it just means more money (especially on opening weekend) for Fox...

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