Theater owners voiced their displeasured over Netflix’s successful bid for Warner Bros. Discovery, slamming the news as an “unprecedented threat” to the movie business.
Cinema United, the world’s largest exhibition trade association that represents over 30,000 movie screens across the country, weighed in on Netflix’s winning bid for Warner Bros Discovery Thursday evening, and made it clear they opposed the pending acquisition.
“The proposed acquisition of Warner Bros. by Netflix poses an unprecedented threat to the global exhibition business. The negative impact of this acquisition will impact theatres from the biggest circuits to one-screen independents in small towns in the United States and around the world,” Cinema United President and CEO Michael O’Leary said in a statement. “Cinema United stands ready to support industry changes that lead to increased movie production and give consumers more opportunities to enjoy a day at the local theatre. But Netflix’s stated business model does not support theatrical exhibition. In fact, it is the opposite.”
As O’Leary continued, he called on regulators to “look closely at the specifics of this proposed transaction and understand the negative impact it will have on consumers, exhibition and the entertainment industry.”
Per Cinema United, a Netflix acquisition of Warner Bros. Discovery would run the risk of removing about 25% of the annual domestic box office, as Netflix has a tendency to release only a handful of films in theaters. Most go directly to its streaming platform.
“Netflix success is television, not movies on the big screen. A true commitment to exhibition means a robust slate of movies with a meaningful period of theatrical exclusivity supported by marketing. Sporadic and truncated theatrical releases to meet awards criteria in a handful of theatres is not a commitment to exhibition,” O’Leary added. “Movie theatres are cultural and economic anchors of communities of all sizes—we are a Main Street industry. Research shows that for each dollar spent in a local movie theatre, an additional $1.50 is spent in surrounding businesses in the community—restaurants, bars, shopping centers, transportation. That is what is at risk here if we sanction fewer movies in the marketplace. Theatres will close, communities will suffer, jobs will be lost.”
The Directors Guild of America expressed similar concerns Thursday night, noting they plan to meet with Netflix to address their apprehension regarding the acquisition.
“We believe that a vibrant, competitive industry — one that fosters creativity and encourages genuine competition for talent — is essential to safeguarding the careers and creative rights of directors and their teams,” the DGA stated. “We will be meeting with Netflix to outline our concerns and better understand their vision for the future of the company. While we undertake this due diligence we will not be commenting further.”
Cinema United and the DGA’s statements come mere hours after word broke that Warner Bros. Discovery was moving forward with exclusive deal talks with Netflix. As we reported, WBD has selected Netflix after the streaming giant offered $30 a share for the studio and streaming assets, according to two people familiar with the situation.
The deal also includes a $5 billion break-up fee to match the terms that Paramount added with its bid.
The decision followed WBD’s request for a third round of bids, which were due on Thursday and involved Paramount, Comcast and Netflix.
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