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Movie theater owners have become embroiled in the kind of drama they usually sell on the big screen, thanks to the ongoing saga of Paramount’s proposed takeover of Warner Bros. Discovery.
Cinema United, the exhibition
industry’s main lobbying group, for months has been publicly opposed to any potential sale of Warner Bros. The trade organization’s president, Michael O’Leary, is concerned a merger will lead to fewer films and potential theater closures. He now has another problem: The group’s two most powerful members, AMC Theatres and Regal Cinemas, are contradicting that message.
In a major blow to the org’s solidarity, the CEOs of the two largest theater chains, AMC’s Adam Aron and Regal’s Eduardo Acuna, are throwing their support behind the $111 billion deal. Insiders note that O’Leary, who became president and CEO of Cinema United in 2023, was appointed in part because he was viewed as less fiery than his predecessor, John Fithian, an outspoken advocate for theater owners. With O’Leary now out of step with his two biggest members, Cinema United’s smaller exhibitors worry about how the internal fracture might jeopardize their future bargaining power, should the pact knock out another major supplier.
“This infighting is not good for anybody,” says one regional exhibitor. “Leadership can’t control the big guys, and it makes us all look like clowns. How do studios take you seriously if they don’t know who is running the ship?”
Cinema United’s leadership isn’t blinking. O’Leary tells Variety the group’s “responsibility and commitment is to the entire exhibition community.” He adds, “As we have since the outset, we will continue to pursue opportunities for meaningful and enforceable guardrails to protect our industry for the future.”
AMC and Regal declined to comment.
Aron has been backing the merger since CinemaCon in April, arguing the combined company would strengthen the theatrical business. After a collection of state attorneys general filed an antitrust lawsuit last month to block the deal, Aron doubled down in a Variety op-ed, asserting the “complaint simply gets the economics of our business backwards.” Making matters more uncomfortable: Aron’s piece was published on the same day that O’Leary issued his own letter to endorse the litigation to delay the merger, writing “the promises of support for theatrical being made in the media are high-level and unenforceable and as such do nothing to alleviate the harms.”
Then Acuna warned last week that delaying the merger might create “more uncertainty and distraction that could be damaging to our industry as we build on our current success.” Hollywood is enjoying its biggest summer season since COVID, and yearly domestic revenues are poised to hit $10 billion for the first time since 2019.
Meanwhile, Sean Gamble, CEO of No. 3 U.S. chain Cinemark, hasn’t officially endorsed the merger.
Cinema United’s leaders were blindsided by Aron’s support for the merger at CinemaCon, sources say, but many members saw his contradictory comments as par for the course, since Aron has diverged with Cinema United on prior issues. Now, with Regal also backing the deal, the group may be on the brink of a civil war.
Aron and Acuna are disposed to favor the pending marriage because Paramount Skydance CEO David Ellison has pledged the joint studio will release at least 30 films a year. By contrast, Disney and Universal, the two biggest studios by market share, each release 16-20 movies annually.
O’Leary and others in Hollywood are skeptical of Ellison’s promise, pointing to the combined company’s substantial $80 billion debt load and plans to cut $6 billion in duplicative efforts across the business. Meanwhile, cinema operators haven’t yet recovered from the 2019 Disney-Fox merger, which resulted in fewer new releases.
There’s a sense among industry insiders that Aron and Acuna believe the Paramount-Warner Bros. union is inevitable and want to stay on Ellison’s good side. Shortly after Acuna’s statement, Bloomberg reported that Ellison offered AMC and Regal a three-year, contractually enforceable agreement that would guarantee exclusive 45-day theatrical windows.
“Paramount already guaranteed a 45-day window,” the indie operator points out. “I don’t see how that swung the tide.”
Cinema United can still argue the health of the exhibition business rests on more than just AMC and Regal. Those large circuits each operate hundreds of locations, and, sure, they might be able to survive more consolidation. However, more than 90% of Cinema United members have fewer than 75 screens. It’s the hundreds of independent theaters that will be vulnerable.
“We will be faced with the same dilemma from Disney-Fox,” says another arthouse theater owner. “There were fewer films and therefore less competition to get on our screens, putting them in a controlling position. We’ve been told, ‘Take it or leave it.’”
