AMC Entertainment will have to defend itself against a charge that it illegally forced Hollywood studios to withhold hit films from a Houston theater that serves Spanish-speaking audiences, a judge there has ruled.
U.S. District Court Judge Alfred Bennett rejected AMC’s request to dismiss an antitrust claim brought by Viva Cinemas against the so-called clearance deals.
Under these arrangements, major exhibitors push studios to give them exclusive access in a community to popular releases. The Justice Department’s antitrust division and several state attorneys general are investigating the practice.
Viva charged that AMC told studios including Warner Bros, Fox, Paramount, Disney, Universal, Sony and Lionsgate that “should they allow Viva to show any film within the first three weeks of its opening — the most financially impactful three weeks of a newly released movie — AMC would not show that movie,” the judge said.
Indeed, when Disney allowed Viva to show Planes, “AMC did not show the movie” at its nearby theater.
The No. 2 exhibition chain declined to comment on the Houston ruling.
The case is distinctive: Viva says that its Spanish-speaking ticket buyers, who want films that are dubbed or have subtitles, constitute a submarket that does not have an alternative.
AMC argued that just 7% of the local population speaks only Spanish. What’s more, the judge noted, AMC said that “movies are observed through more than just language. Viewers also observe story lines, body language, sound effects, etc.”
Bennett was unpersuaded.
“AMC does not explain why 7% of Houston’s population is not a sufficient submarket,” he writes.
Viva also demonstrated that there’s an area it serves within Houston that has a high concentration of Spanish-speaking residents and that “drivers are unlikely to drive very far outside of this zone to see a movie.”
AMC, controlled by China’s Wanda Group, is poised to become the world’s largest exhibition chain with pending deals to buy Carmike Cinemas and UK-based Odeon & UCI Cinemas.