Buying cinema chains ruled out by Universal, Warner Bros.

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There’s no return to the golden era of Hollywood on the cards for the major studios, it would seem, as cinema acquisitions are ruled out.

Cinema chains have been finding it increasingly difficult to operate of late, both here in the UK and in the US as well. The company operating Cineworld and its American counterpart, Regal, has suspended business for the foreseeable future, whilst the AMC cinema chain, the owner of Odeon here in the UK, has admitted its cash reserves may not last out the year.

One potential outcome to this scenario that has been mooted online is for film studios to swoop in and purchase the cinema chains for a rock-bottom price, thus ensuring that any film studio operating its own multiplex chain can guarantee favourable distribution of its movies.

This was of course common practice in the US throughout the era of the studio system, before it was banned in 1948 in a landmark ruling known as The Paramount Decree. However, with that decree recently abolished, there is nothing, in theory, to stop studios from attempting to own cinema chains once more.

However, with Disney announcing just this week that its focus would be on streaming (and its current distribution policy clearly taking that path too), it seems that their interests lie elsewhere.

Now, the studio heads of Warner Bros and Universal too have rejected the idea of acquiring their own cinema chains. Donna Langley, Chairperson of Universal has said ‘we have no plans to do that’, according to Deadline, whilst speaking at a global virtual panel on the effect of Covid-19 on Hollywood. The notion was also dismissed by Ann Sarnoff,  CEO of Warner Bros.

Whilst this doesn’t entirely rule the idea out, as there are other cash-rich players like Amazon who may yet elect to make a move, it certainly makes the prospect more unlikely.

Ultimately, because of its major market share, other studios will look to what Disney does, in the hope of understanding its model of success. Disney’s decision to reorganise its corporate structure to focus on streaming will not have gone unnoticed amongst those other studios.

Whilst cinemas are no doubt in a dire position, we can’t help but feel that wholesale buyouts by film studios would lead to equally compromising problems further down the road. In the meantime though, the industry will have to find its own way out of this crisis, it seems.

Image: BigStock

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