Antitrust Scrutiny for 3 Big U.S. Theater Chains

from NYTs

A simmering federal investigation into whether the big movie theater chains are misusing their market clout to keep new films away from independent competitors gained steam on Tuesday.

Cinemark Holdings, the nation’s third-largest movie theater operator, disclosed in a filing with the Securities and Exchange Commission that it had received a civil investigative demand for information from the antitrust division of the Justice Department.

Cinemark’s two bigger competitors, Regal Entertainment Group and AMC Entertainment, on Monday alerted shareholders to similar requests.

Together, the three chains control about 42 percent of the nation’s movie screens.

For months, the government has been looking into antitrust complaints from a handful of independent theater owners.

At issue is a decades-old business practice in the exhibition industry known as “clearances.” As part of their negotiation with studios over movie bookings, chains seek exclusive rights to show films in a certain geographic area. The goal is to prevent another theater a couple of miles away from playing the same movie at the same time.

Several small theater companies — notably ones that have sunk large sums of money into new locations that bump up against the big chains — have been crying foul. Some have taken legal action.

More here.

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