Cinema United has had a change of heart on the prospect of a Paramount–Warner Bros. Discovery merger
The movie theater trade organization previously cheered on 12 state attorneys general, including California‘s Rob Bonta, as they filed suit to block the merger of the two historic studios. But in a letter postmarked Tuesday, the organization changed course and called for both Paramount Skydance CEO David Ellison and Bonta to “meet in the immediate future and discuss all possible avenues for resolving“ the lawsuit
The letter from Cinema United president and CEO Michael O‘Leary and Cinema United board chair Mike Bowers, the president and CEO of Harkins Theatres, was broad in its explanation of why the coalition, previously so fierce in its opposition to the megamerger, was changing its tune. But they gestured to recentsuccesses at the box office and fears that that momentum could slow in their explanation
“Today, our industry has the wind at its back. Studio partners are creating and distributing extraordinary films. Audiences across generations are responding with enthusiasm,” O‘Leary and Bowers wrote. “But none of that can be taken for granted. Global exhibition believes in a bold future for this industry, but reaching our full potential requires working together.“
The leaders of the trade organization additionally expressed concern over the consequences that uncertainty about the future could mean for the entertainment business. “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. In fact, it is the next logical step,“ they wrote
Four guardrails would give movie theaters reassurance about the deal, they wrote. One is a commitment to “maintain or expand“ the production of projects meant for theatrical release with significant marketing and a robust period of theatrical exclusivity. Another is a promise that the consolidation will not result in “an increase in rental terms.“ Finally, the organization also called for safeguards that ensure movie theaters of all sizes can exhibit projects without onerous requirements and can continue to access film catalogs “under reasonable conditions and precedents.”
In its gestures toward the potential ramifications of uncertainty in the marketplace, the Cinema United letter resembles a similar missive from the leaders of IATSE and the Directors Guild of America that was sent to Ellison and Bonta the previous week. In their letter, the Hollywood unions warned that the current schedule for the antitrust trial — set for March 2027 — could prove disastrous for industry workers already dealing with the effects of an industry contraction and runaway production.
“We cannot overemphasize how damaging the current timeline for the trial — which would extend the uncertainty surrounding the proposed merger until the spring of next year at the earliest — is to an already struggling industry,“ the unions leaders wrote
And the Cinema United letter also follows several major movie theater leaders throwing their support behind the $111 billion merger. After the CEOs of AMC Theatres and Regal Cinemas backed the deal, on Tuesday Cinemark called for an “expedited resolution“ to the merger. The theater chain‘s statement said that a “constructive dialogue“ was taking place between Paramount Skydance and Cinema United
