Paramount will put 30-film pledge in writing to theatre chains if Warner deal goes ahead: Sources

LOS ANGELES – Paramount Skydance has agreed to sign contracts with major theatre chains guaranteeing that it will release 30 movies a year in cinemas if it acquires Warner Bros Discovery, according to sources.

Paramount has offered three-year agreements to AMC Entertainment Holdings and Cineworld Group’s Regal Cinemas, the world’s two largest theatre chains, requiring it to release the films exclusively in theatres for at least 45 days, according to the sources, who asked not to be identified because the agreements are private. The films would also not be available to stream online for at least 90 days.

Paramount CEO David Ellison has already made similar claims in public, but the written commitments provide assurances that he would not change his mind later. If Paramount does not fulfil its obligation, it would face penalties, according to the sources.

The agreements could provide a template for settling the antitrust lawsuit brought by 12 states to try to stop Paramount’s US$110 billion (S$140 billion) acquisition of Warner Bros. Paramount has already tried to negotiate a settlement with California Attorney-General Rob Bonta, who is leading the lawsuit by the states.

The states claim the deal will harm the movie business because Ellison would wield too much control and reduce output, costing people jobs. The merger would place two of Hollywood’s oldest and largest movie studios, Paramount and Warner Bros, under one roof. A trial is scheduled for March.

The merger has divided the cinema industry. AMC and Regal came out recently to back Ellison.

AMC CEO Adam Aron published an op-ed in the Hollywood trade outlet Variety, while Regal CEO Eduardo Acuna said in a separate statement that a long court fight would be bad for the movie business.

Cinema United, a lobbying group that represents theatre chains big and small, remains opposed to the deal. Ellison and his inner circle have been talking to the theatre chains for months, seeking to secure their support.

Ellison has insisted several times that he plans to increase the studios’ output and support theatres.

“The Paramount-Warner deal began with the movies,” he wrote in a recent op-ed for the New York Times. “I have loved film since I was old enough to sit still for one, and scenes from the movies have shaped who I am.”

Many Hollywood unions, producers, tradespeople and lawyers are sceptical. When Walt Disney acquired the 20th Century Fox studio, it also pledged to keep making as many movies. Instead, the combined output has dropped.

Paramount is borrowing almost US$50 billion to buy a much larger company and will need to find billions in cost savings to service its debt.

Ellison was initially confident his deal would close by the end of September, but he has now run into the lawsuit from the states, as well as one from the Writers Guild of America.

By the time a trial begins in March, Paramount will owe Warner Bros more than US$1 billion in late fees due to the delay. Ellison has tried to turn the tide of public opinion, rallying allies like Hollywood super agent Ari Emanuel, who also published an op-ed supporting the deal. BLOOMBERG