Tags: Justice | DOJ | clearances | movie theaters | Hollywood | antitrust law

DOJ Investigates Agreements Between Hollywood, Theaters

By    |   Thursday, 16 April 2015 09:34 PM

The Department of Justice is taking aim at the movie industry and its practice of granting exclusive screenings of select films in particular areas.

According to The Wall Street Journal, the DOJ's antitrust division has taken a renewed interest in the agreements between studios and theaters known as "clearance."

Smaller theaters claim they lose money when larger exhibitors are given exclusive access for movie premieres, and say it violates antitrust law.

The "clearance" agreements happened frequently in the 1990s and have recently resurged because more theaters are being built.

"The Justice Department has been looking into the clearance issue for several months, but recently ramped up interest in the matter, asking for market-specific details about when larger circuits requested clearance and expanding the ring of people interviewed, these people said," writes the Journal. "The Justice Department hasn't launched a formal investigation into the issue, according to these people."

The DOJ, according to the Journal, is targeting the nation's three largest theater companies — Regal Entertainment Group, AMC Entertainment Holdings, and Cinemark Holdings — that account for almost half of the country's 40,000 movie screens.

Regal, according to the Journal report, said the agreements "enable film studios to cost-effectively distribute their movies, allow exhibitors to compete for film content and provide consumers with the variety of movies that they enjoy."

AMC also defended the practice, saying, "there is nothing new about the longstanding, well-established industry practice."

The "clearance" requests generally come from theaters that are within three miles of another one.

The Los Angeles Times reports that DOJ investigators have already interviewed at least two theater owners who claimed the three aforementioned companies are edging them out of the market by securing deals for big films.

"Our issue is that three or four large companies are using zones and clearances to preempt competition and they're doing it so blatantly, even before we sign a lease. It's clearly a scare tactic," IPic Entertainment CEO Hamid Hashemi told the Times. IPic operates 11 luxury theaters across the country.

Last summer, meanwhile, the DOJ announced a plan to require move theaters to provide closed captioning and audio description to grant people with hearing and vision disabilities access to seeing movies on the big screen. The plan came in the form of an amendment to the Americans with Disabilities Act.

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The Department of Justice is taking aim at the movie industry and its practice of granting exclusive screenings of select films in particular areas.
Justice, DOJ, clearances, movie theaters, Hollywood, antitrust law
Thursday, 16 April 2015 09:34 PM
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