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Paramount Pledges 30-Plus Films a Year to Win WBD Deal

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Paramount CEO David Ellison settled antitrust concerns by promising 30-plus theatrical releases a year, but exhibitors worry about what comes after year five.

Paramount chief executive David Ellison has committed to releasing at least 30 films in theaters in 2027 and 2028, and at least 32 films in each of 2029, 2030 and 2031, as part of a settlement that clears a path for his company's acquisition of Warner Bros. Discovery. The deal combines two of Hollywood's oldest studios.

The theatrical guarantees are written into an agreement Ellison reached this week with a group of state attorneys general who had raised antitrust concerns about the merger. Ellison framed the output in blunt terms: a new movie roughly every 11 days. The combined company already has 35 films scheduled for release next year, according to data from Rentrak.

The settlement does more than set a headline number. It specifies how many of the releases must be distributed widely and how many must carry budgets above $50 million. Paramount agreed to face steep financial penalties if it misses those thresholds during the five-year period.

Theater owners split on the promise

Hollywood has been pressing for more theatrical titles since the Covid pandemic closed theaters and backed up the production pipeline. Ellison began promoting his theatrical commitment as early as April, at the industry's annual CinemaCon event. That pitch won early support from the chiefs of the three largest cinema chains - AMC's Adam Aron, Cinemark's Sean Gamble and Regal's Eduardo Acuna - before the settlement was even finalized.

Cinema United, the lobbying group representing theater owners, had firmly opposed the merger. This week it reversed course, saying the agreement with the states "accomplishes many of exhibition's objectives."

Not everyone in the business is satisfied. Several theater executives, speaking anonymously to talk candidly, said they remain skeptical. Their doubts center less on the raw count of films than on what those films will be and how the enlarged company will behave.

"This is much more complicated than simply asking whether 30 movies is enough," said Paul Dergarabedian, head of marketplace trends at Rentrak. He called 30 wide releases "a meaningful commitment to theatrical" and said exhibitors would welcome a strong pipeline.

"But ultimately the proof will be in how those movies perform, how varied the slate is, how consistently they reach theaters and how the combined company executes on those commitments," Dergarabedian said.

Concerns over leverage and debt

Exhibitors' worries extend beyond the quality of the slate. Several operators told CNBC they fear the merger will shrink the number of studios feeding films into the market and weaken competition. That, they argue, would hand the combined company a stronger hand in negotiating windowing terms and rental fees.

The pressure would not fall evenly. Chains that run hundreds of locations can absorb consolidation. Smaller chains and independent operators carry far less bargaining weight and stand to lose the most from any reduction in film supply.

The backdrop is an industry still reshaping itself after the pandemic. Screen counts have fallen and audiences have thinned. Higher ticket prices have papered over some of that decline - and are expected to push the domestic box office past $10 billion for the first time since the pandemic - but the economics of moviegoing remain in flux.

Historically, studio mergers have led to fewer releases, which cuts into revenue and hits smaller theaters hardest. That pattern is precisely what critics of the Paramount-WBD tie-up are watching for.

The sharpest question is what happens when the five-year agreement runs out. Some theater owners doubt Paramount can sustain output of more than 30 theatrical films past the deal's expiration, particularly as production and marketing costs keep climbing. Adding to the strain, the company will carry roughly $79 billion in debt once the merger closes.

"Of course, I worry about what happens in year six," said Rob Lehman, president and chief operating officer, capturing the unease among operators who welcome the near-term commitment but see no guarantee beyond it.

For now, the settlement resolves the immediate antitrust hurdle and locks in a defined slate of releases through 2031. Whether it delivers the varied, high-performing lineup exhibitors say they need - and whether the pace holds once the obligations lapse - will not be clear for years.

Paramount Warner Bros Discovery merger, David Ellison, theatrical release commitment, movie theater exhibitors, antitrust settlement, box office 2027, Cinema United, Rentrak

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