The head of Cinema United is reiterating the lobbying organization’s opposition to Paramount Skydance’s proposed merger with Warner Bros., as well as the group’s support of litigation filed by state Attorneys General that has put the deal on hold.
In a letter to theater owners on Wednesday, Michael O’Leary, who serves as CEO of Cinema United, argued that “this transaction will result in fewer movies, higher costs for you and your patrons, and ultimately, fewer theatres. 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.”
O’Leary went on to the tell the organization’s members that he had provided a sworn declaration outlining exhibitors’ concerns in support of the states’ successful motion for a temporary restraining order. The Cinema United chief expressed skepticism about Paramount’s promise it will release 30 films annually after combining with Warner Bros. That’s far more than any other studio produces a year. He noted the combined company will carry a debt load of $80 billion, which could hamper those efforts.
“We will continue to argue against the expense of this highly leveraged transaction being passed on to theatre owners and movie fans through increased costs,” O’Leary wrote. “We will continue to advocate for theatres of all sizes to have access not just to new movies, but also the considerable storehouse of classic films in these two studios’ vast libraries. These are not Hollywood issues, they are Main Street issues, and we are committed to making them relevant not just for this transaction, but to the long-term future of this vital industry.”
O’Leary said Cinema United’s executive board asked to speak with Paramount at CinemaCon, an annual convention for theater owners and studios that was held last spring, but its invitation was declined. He said he then met with Paramount in Washington, D.C. in June, where he outlined the organization’s reservations about the sale.
“We mutually committed to talking further to see if we could align on enforceable commitments that would allay our concerns about the merger,” O’Leary wrote. “On July 1, after what Cinema United believed were additional constructive conversations with Paramount, we provided them with a comprehensive list of our concerns to move the discussions forward. We have not heard from them since.”
In a statement, a spokesperson for Paramount disputed O’Leary’s characterization.
“We met with Cinema United in Washington in June and mutually committed to talking further to see if we could align on enforceable commitments related to two distinct items Cinema United requested. We provided enforceable commitments to Cinema United but then their counsel introduced new demands unrelated to the merger. Notably Cinema United uses the same law firm that represents multiple clients opposed to our merger. We would be pleased to work with Cinema United or their members as they are our partners.”
O’Leary also turned to historical precedents to explain his opposition, noting that when the Walt Disney Company acquired much of 21st Century Fox in 2019, the number of films the companies produced shrank considerably.
“Cinema United has not wavered on our list of concerns and will continue to press for meaningful, tangible guardrails to ensure that this transaction, the largest in the history of Hollywood, does not have the same negative impact on the global box office that you experienced after Disney/Fox,” O’Leary wrote. “Too often, this transaction has been viewed as a Hollywood transaction, and the real-world impact – the Main Street impact – on businesses like yours has taken a back seat. Despite well-orchestrated media campaigns attempting to win the public relations battle, we have ensured that the potentially devastating impact the merger will have on theatrical is not overlooked.”
On July 24, Paramount reached an agreement with a coalition of state attorneys general to postpone the Warner Bros. Discovery merger until after an antitrust trial. As part of that deal, Paramount agreed not to close the $111 billion transaction until five days after a trial is held or June 1, 2027, whichever is earlier.
Despite Cinema United’s opposition, some exhibitors have endorsed Paramount’s plans to buy Warner Bros. AMC, the world’s largest cinema chain, has come out in support for the transaction, arguing that Paramount and its head David Ellison are passionate defenders of the big screen and will invest in the sector.
“I greatly appreciate David Ellison’s track record of success and his passion to make movies that will dazzle audiences the world over,” AMC’s CEO Adam Aron said in a statement last April. “In just the short time he has owned Paramount Pictures, he already has begun to assemble a superb team around him and already has been increasing the number of movies being greenlit at Paramount.”