Regal Entertainment’s SEC filing this afternoon reads a lot like the one AMC Entertainment made this morning about the Justice Department’s investigation into so-called clearance agreements by the largest chains that allegedly prevent independent theaters from landing splashy releases.
The No. 1 theater chain says it received a Civil Investigative Demand from the Antitrust Division on Thursday to provide documents and answer questions. That was followed by similar requests today from the Ohio attorney general.
“The Company intends to cooperate with these investigations and any other related Federal or state investigations to the extent any are undertaken,” Regal says. “While the Company does not believe that the DOJ or state investigations will produce evidence that the Company has engaged in any anticompetitive conduct in violation of Federal or state antitrust or competition laws, the Company can provide no assurances as to the scope, timing or outcome of the DOJ’s or any other state or Federal governmental reviews of the Company’s conduct.”
AMC’s filing this morning seemed to weigh on some investors today, though officials’ concerns already were widely known. AMC shares fell 3.2% while Carmike was down 2.6%, Cinemark fell 0.5%, and Regal fell 0.3%.
Investigators are looking into whether local exclusivity for hit films hurts consumers by making the market less competitive. In AMC’s case, about 10% of its markets are subject to competitive clearances, and most of those markets include theaters owned by another major chain, Stifel Research analyst Benjamin Mogil says. The conflicts tend to show up in urban markets where theaters are close to each other.