Cinemark CEO Points Out Potential Adverse Impact of Universal and AMC Deal

Late last month, Universal Pictures and AMC Theatres announced a surprising new deal that drastically reduced the timeframe the theater chain has exclusive rights to movies from the studio. Instead of a typical 90-day exclusive window, the new deal allows Universal to send movies to VOD services just 17 days after they first hit theaters, giving AMC a chunk of the revenue generated during early VOD sales. As it turns out, there's at least one other theater chain that seems to have an issue with the deal, suggesting it could set a dangerous precedent with other exhibitors around the country.

During Cinemark's Q2 investor's call Tuesday morning, CEO Mark Zoradi said the "overly aggressive" deal could have an "adverse" impact on the box office as movies get to the middle of their typical theatrical release.

“Consistent with our past practices, Cinemark does not comment on the actions of our competitors," Zoradi said on the call. "That said we believe an exclusive theatrical window is critically important. While we have publicly stated that we’re willing to have conversations with our studio partners to evolve windows, we’re mindful that an overly aggressive shortened theatrical window could have an adverse impact to the mid-to-tail-end of a film’s life."

When the AMC and Universal deal was first announced, the news surprised many — not only because of the drastically reduced theatrical window but because just weeks prior, the chain pledged it would stop showing Universal films after the studio's decision to go direct to VOD for releases at the beginning of coronavirus quarantining.

As you might expect, AMC chief Adam Aron said the deal was born out of necessity. “Focusing on the long-term health of our industry, we would note that just as restaurants have thrived even though every home has a kitchen, AMC is highly confident that moviegoers will come to our theaters in huge numbers in a post-pandemic world," Aron said in a statement. "As people enjoy getting out of their homes, we believe the mystical escape and magical communal experience offered at our theaters will always be a compelling draw, including as it does our big screens, big sound and big seats not to mention the alluring aroma of our perfectly prepared popcorn.”