AMC Accused of Coercing Film Distributors in Antitrust Lawsuit
One Southeast movie theater chain says that as a result of AMC's market power, it has been deprived of Sony Pictures films and forced to make unfavorable deals with Warner Bros.
Can't find Hollywood blockbuster films at the local cineplex?
According to one Georgia-based movie theater chain, that might be AMC Entertainment's fault.
Cobb Theaters has filed a federal antitrust lawsuit in Georgia, alleging AMC has used its worldwide market power to coerce film distributors to deprive competitors of access to studio films.
AMC owns about 350 theaters with more than 5,000 screens in North America. It's the second-largest theater circuit in the U.S., and after being acquired by Chinese conglomerate Wanda Group, wields enormous power as the world's largest cinema operator. Now the question is whether AMC is abusing that power. Last July, two U.S. government agencies and three Chinese authorities blessed the merger and presumably reviewed any antitrust concerns.
Cobb, which owns 19 theaters and 231 screens in the Southeast region, isn't satisfied.
According to the complaint, "Dominant exhibitor circuits like AMC derive substantial market power from their ability to provide numerous exhibition locations or runs simultaneously to distributors for the wide release of a film, including locations in non-competitive zones where a distributor has no other alternative exhibitor to play a film."
The plaintiff says it beat AMC in the leasing of a space for a theater in Georgia, and afterward, AMC's head film buyer sent a letter to major film distributors demanding preferential or exclusive licensing treatment over Cobb's new theater.
Cobb says major film studios complied with the demand, and as a result, they've been shortchanged on the bigger movies.
"For example, between January 1, 2013 and October 27, 2013, the only films released in 2013 that Sony Pictures licensed to the Brookhaven CineBistro were Elysium and Captain Phillips," says the lawsuit. "During the same time period, Sony Pictures licensed to one or both of AMC’s Buckhead theaters After Earth, The Amazing Spider-Man, Battle of the Year, The Call, Carrie, Evil Dead, Grown Ups 2, The Mortal Instruments, One Direction: This Is Us, This Is the End, White House Down, and Zero Dark Thirty."
"And Warner Bros. Pictures conditioned its license of The Hobbit: The Desolation of Smaug to the Brookhaven CineBistro on the Brookhaven CineBistro’s agreement to play the film on 4 of its 7 screens," continues the lawsuit.
Such arrangements historically are not too unusual, but now Cobb is charging AMC with "attempted monopolization of the market for film licenses" in its region and a "ruthless campaign to prevent Cobb from competing with AMC."
Cobb is demanding trebled damages, disgorgement of profits and an injunction against AMC from continuing to engage in alleged anti-competitive conduct.
AMC declined comment.