Disney Lays Down the Law for Theaters on Star Wars: The Last Jedi

[question everything]

LOS ANGELES—The box-office domination of the “Star Wars” franchise has given Walt Disney Co. unprecedented power over the nation’s movie theaters.

Before exhibitors can begin screening “Star Wars: The Last Jedi” this December, they must first commit to a set of top-secret terms that numerous theater owners say are the most onerous they have ever seen. Disney will receive about 65% of ticket revenue from the film, a new high for a Hollywood studio. Disney is also requiring theaters to show the movie in their largest auditorium for at least four weeks.

Ignoring the terms carries an unusual penalty. If a theater violates any condition of the distribution agreement, Disney can take an additional 5% cut, bringing the studio’s total haul to 70% of sales on a movie likely to gross more than $500 million at the domestic box office.

The case of “The Last Jedi” highlights a perpetual but growing tension between the business partners that bring movies to the public: studios and theaters. Negotiations between the two parties have grown pitched as Disney has become one of the most powerful studios in Hollywood and theaters have lost leverage as box-office sales fall. Box-office revenue is down 5% so far this year.

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Few operators can afford to turn away a Disney windfall. But some independent theaters have decided against screening “Last Jedi” when it is released, saying the company’s disproportionate share of ticket sales and four-week hold make little economic sense—especially in small towns.

“There’s a finite number of moviegoers in my market, and I can service all of them in a couple of weeks,” said Lee Akin, who operates a single-screen theater in Elkader, Iowa (population: 1,213).

If he were to sign up for the movie under Disney’s terms, Mr. Akin said he would be stuck playing “Last Jedi” to near-empty auditoriums toward the end of a monthlong run while still giving Disney 65% of those paltry sales. The studio is applying the 65% split across all weeks of the film’s release, rather than some studios’ practice of beginning a split at a high figure and then lowering it in subsequent weeks.

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Of course, most exhibitors make more money on concession sales than box office, and a theater receiving 35% of ticket sales on a hit that grosses $700 million fares better than one receiving 50% on a $200 million movie.

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Disney’s terms have annoyed theater owners before. In May 2015, a trade group representing theater owners took the rare step of sending Disney a letter outlining “an avalanche of complaints, concerns and fears” from its members over conditions imposed on theaters that wanted to show the studio’s “Avengers: Age of Ultron.”

On the “Avengers” movie, Disney tried to limit matinee discounts and issued a rule stating theaters must use a national-average ticket price when calculating the box-office split. Disney retreated from both rules following the trade group’s letter.


https://www.wsj.com/articles/disney-lays-down-the-law-for-theaters-on-star-wars-the-last-jedi-1509528603

[monmouth4]

1. There's that almighty dollar again and Disney has always been known for it..n/t

[bdtrppr6]

2. off to the pirate bay!

[sandensea]

3. And getting them to reason with you if the movie flops.

"Hey," they'd tell you. "Sith happens."

[SergeStorms]

4. The theaters should band together.....

and refuse to show Disney's movie unless their demands are met. What would Disney do? They'd be completely out of luck, with this expensive movie distributed all over the U.S. and no place to show it. The theaters have to put pressure on Disney just like the journalists. Disney is a money-driven bully, and they usually don't end up well in this country once people realize the scope and severity of their transgressions. Disney never has played fair, so it's high time they be taken down a peg or two.