8:14am PT by Eriq Gardner
Mark Cuban's Landmark Theatres Demands Dismissal of Antitrust Lawsuit
In new court papers, Mark Cuban-owned Landmark Theatres insists there's no antitrust conspiracy from seeking the exclusive rights to exhibit a movie in a geographic region as long as the theater chain is not using its nationwide footprint to coerce distributors.
Landmark is facing a lawsuit from a group of independent community movie theaters who complain about being deprived of art films. According to the complaint in D.C. federal court, Landmark demanded and obtained clearances from those distributing such films as Moonlight, Birdman and The Illusionist. The plaintiffs, operating movie theaters in Washington, D.C., Denver and Detroit, suggest Landmark accomplished this by exploiting its circuit power.
But in a motion to dismiss filed Friday, Landmark tells the judge that plaintiffs have failed to spell out "who, what, when, where, or how" the indie-cinema giant leveraged its circuit power in communications with distributors over film licenses.
"Plaintiffs fail to allege facts sufficient to plausibly suggest that Landmark entered into any agreement with any distributor at any time at all," states the memorandum in support of dismissing the lawsuit. "Indeed, the most that can be gleaned from Plaintiffs’ allegations is that Landmark in some instances preferred to not show the same film as theaters located near its own in these three cities, and that unnamed distributors have agreed in certain situations to honor Landmark’s preference. Far from supporting an antitrust claim, these facts reveal a competitive market where distributors and exhibitors are unilaterally and rationally choosing the terms on which they do business with one another on a theater-by-theater, film-by-film, and city-by-city basis."
For Landmark, the allegation it has engaged in anti-competitive conduct is either ironic, or in plaintiff's eyes, "hypocritical."
That's because Landmark itself sued Regal Entertainment in 2016 and alleged the even larger movie chain used its power to coerce film distributors like Sony, Lionsgate and Disney to geographically clear movies such as Hunger Games: Mockingjay – Part 2 and Star Wars: The Force Awakens. That case settled approximately eight months later.
But according to Landmark, unless there's some sort of factual support for an illicit agreement covering theaters beyond a given geographic region or more than one film, that's just fair competition and a "rational business practice."
Landmark's memorandum also highlights a difference between art films and big-budget ones.
"As Plaintiffs themselves allege, Specialty Film markets are inherently different from Commercial Film markets because of the limited audiences for Specialty Films — thereby highlighting the reasonable business justification for Specialty Film theaters to decline to play a film that is simultaneously licensed to play at a nearby theater, diluting the already limited audience and ticket-sales potential," states the brief (read in full here). "And it is equally rational for Specialty Film distributors to honor such requests from a reliable, long-standing successful exhibitor."