The CEO of Cinema United, Michael O’Leary, has reiterated the organization’s strong opposition to the proposed merger between Paramount Skydance and Warner Bros. In a letter addressed to theater owners, O’Leary emphasized support for ongoing litigation from state Attorneys General that has currently delayed the merger.
Concerns Over the Merger’s Impact
O’Leary articulated his concerns regarding the merger, arguing that it would lead to a decrease in movie production, increased costs for theater owners and patrons, and ultimately, the closure of more theaters. He dismissed Paramount’s promises to support theatrical releases as “high-level and unenforceable,” indicating that such commitments do little to mitigate the potential negative consequences of the deal.
Skepticism Towards Paramount’s Promises
In his correspondence, O’Leary detailed his reasoning, pointing out that Paramount’s pledge to release 30 films annually post-merger is unrealistic, as it significantly exceeds the output of any other studio. Additionally, he highlighted that the combined entity would carry an extensive debt burden of $80 billion, further complicating these ambitious promises.
Advocating for Theaters of All Sizes
O’Leary affirmed that Cinema United will persist in opposing cost increases resulting from the merger and will advocate for theaters of all sizes to not only access new films but also to tap into the rich catalog of classic films held by the two studios. “These are not Hollywood issues, they are Main Street issues,” he stated, emphasizing the long-term ramifications on the industry.
Attempts to Initiate Dialogue
Throughout the process, O’Leary has sought dialogue with Paramount. At CinemaCon, an annual gathering of theater owners and studios, Cinema United’s executive board requested a meeting, which was declined. Subsequently, O’Leary met with Paramount representatives in Washington, D.C. in June to express the organization’s reservations about the merger. Despite initial mutual commitments to continue discussions, O’Leary noted they have not received further communication since providing a comprehensive list of concerns on July 1.
Paramount’s Counterstatement
A spokesperson for Paramount has contested O’Leary’s portrayal of the discussions, asserting that while there was a commitment to further dialogue, Cinema United’s legal representation introduced new demands unrelated to the merger after enforceable commitments were offered.
Historical Context and Ongoing Advocacy
O’Leary referenced historical mergers, specifically the Walt Disney Company’s acquisition of 21st Century Fox in 2019, which resulted in a notable reduction in film production. He expressed that Cinema United’s stance remains firm and will continue to seek safeguards to prevent similar adverse effects from the current high-stakes merger of Paramount and Warner Bros.
Legal Delay and Industry Responses
As the situation unfolds, a recent agreement reached on July 24 allows for a postponement of the Warner Bros. Discovery merger until after an antitrust trial. According to the terms, Paramount will not proceed with the $111 billion transaction until five days post-trial or by June 1, 2027, whichever comes first.
Divergent Views on the Merger
Despite the backlash from Cinema United, some exhibitors, including AMC, have voiced support for the merger, affirming their belief that Paramount and its leader, David Ellison, are committed to enhancing the cinema experience. AMC CEO Adam Aron praised Ellison’s track record and his intention to increase the number of films greenlit at Paramount since taking the helm.
As this situation develops, the implications of the merger, both immediate and far-reaching, remain a critical concern for industry stakeholders.
