Movie Theaters Go Public With New Effort to Stop Warner Bros. Sale

Theater chains oppose any sale of Warner Bros. on Capitol Hill.

“We are deeply concerned that this acquisition of Warner Bros. by Netflix will have a direct and irreversible negative impact on movie theaters around the world,” Cinema United, the largest trade organization representing exhibitors, said in written remarks sent Wednesday to the House Judiciary Subcommittee on Administrative State, Regulatory Reform and Antitrust as it prepares to hold a hearing on the potential Warner Bros. acquisition.

“Such an acquisition will further consolidate control of film production and distribution in the hands of a single, dominant global streaming platform in an already highly concentrated market,” added the group, led by CEO Michael O’Leary.

As Paramount and Netflix continue a bitter battle for WBD, largely over price and terms of the deal, theater owners have told Congress that Netflix’s business model does not include theatrical exploitation, and that Paramount’s acquisition of Warner Bros. would significantly increase market consolidation after previous rounds of mergers and acquisitions.

“If Paramount or another major studio ultimately supplants Netflix as a buyer, our concerns are no less serious. A combination of Paramount and Warner Bros., for example, would consolidate up to 40 percent of each year’s domestic box office in the hands of a single dominant studio,” the trade organization wrote to Washington, D.C. politicians.

The threat to the exhibition industry if Netflix or Paramount prevail in the acquisition of Warner Bros. would be a reduction in Hollywood film production and consumer choice at the multiplex. “Amid this backdrop of significant M&A activity, Netflix is ​​now seeking to acquire Warner Bros., a streaming competitor that controls a sizable library of shows and movies. While Netflix’s proposed acquisition of Warner Bros. is uncontested, the threat to our members is serious – and perhaps even existential – given its hostility to exploitation,” Cinema United said.

In the latest twist in the heated competition for Warner Bros., WBD’s board of directors released a letter Wednesday rejecting Paramount’s new offer and sticking to its signed deal with Netflix.