AYESHA RASCOE, HOST:
This summer's box office has been booming, but behind the scenes in Hollywood is a big corporate drama, the looming possibility of a merger between Paramount Skydance and Warner Bros. Discovery. Now a major movie theater chain owner says they support the deal, despite opposition by many in the film industry. NPR culture correspondent Mandalit del Barco joins us from our studios in Culver City. Welcome.
MANDALIT DEL BARCO, BYLINE: Thank you so much.
RASCOE: Why do many in Hollywood hate this merger?
DEL BARCO: Well, this mega merger has a lot of vocal opponents who say it would be disastrous for the film industry. Actors, directors, writers, and filmmakers signed an open letter to try to block the merger. Here's Scottish actor Alan Cumming in a recent Instagram post.
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ALAN CUMMING: This merger would mean thousands of job cuts, fewer films and even higher prices, but it isn't a done deal.
DEL BARCO: And that's because attorneys general from 12 states, including California, are suing Paramount for antitrust violations. A judge in northern California has set a trial for March.
RASCOE: What's the argument for the deal?
DEL BARCO: Well, David Ellison, who owns Paramount Skydance, continues to push for this $111 billion acquisition. On Tuesday, he talked to investors, saying it would work.
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DAVID ELLISON: Creating a stronger, well-capitalized, creative-first company with the scale to compete alongside Netflix, Amazon, Apple and others, benefiting consumers, theatrical exhibition and creators alike.
RASCOE: The head of Regal Cinemas recently released a statement supporting Paramount. What did he argue?
DEL BARCO: Eduardo Acuna is the CEO of Regal Cinema, the second largest movie theater chain in the country. And back in June, he was on a panel with other Hollywood leaders. It seemed then that he was still making up his mind about the Paramount deal.
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EDUARDO ACUNA: I think they're doing great work. On the other hand, we're all concerned with consolidation, just in general. In any industry in the world, consolidation usually doesn't bring the best.
DEL BARCO: Since then, Acuna says he met with Ellison and his team, and it comes down to trust. Acuna now says he believes they're sincere about their commitment to put 30 films a year into theaters with the combined studios. And he says a long fight in court will create more uncertainty and distractions and could damage the industry.
But, you know, he's not the first theater owner to say this. Adam Aron, the CEO of the country's No. 1 movie theater chain, AMC, has been backing the deal, and he argued in an op-ed recently that the combined movie studios are critical to the momentum being felt at the domestic box office.
RASCOE: So why does he think momentum at the box office should figure into this deal?
DEL BARCO: Well, both of the CEOs refer to the recent success of Christopher Nolan's film "The Odyssey" and the newest "Spider-Man" movie. Collectively, these hits have made history. They're primed to hit $1 billion at the box office this weekend. And that's a really big comeback for movie theaters that suffered through the COVID pandemic and film production shutdowns over the past six years. When Disney merged with Fox and Fox Searchlight in 2016, the combined studios made about half the number they did before separately. But these movie theater CEOs say they believe Ellison's promise to provide theaters with even more movies. Of course, we don't know if they'll be hits or if ticket prices will go up.
RASCOE: But other movie theater owners don't agree?
DEL BARCO: Well, that's right. In fact, Cinema United, the association of movie theater owners around the world, remains opposed to the Paramount-Warner merger. CEO Michael O'Leary sent a memo to the members blasting the deal, saying he's skeptical of Ellison's promises to cinemas, and he noted that the combined company will carry a debt load of $80 billion a year.
RASCOE: So what's next for the proposed deal?
DEL BARCO: Well, if it doesn't close by the end of September, Paramount will have to start paying Warner Bros. shareholders $7 million a day. And while the antitrust trial in California looms, one of the Hollywood trade publications half jokingly begged George Clooney and his A-list friends to save the day by buying Warner Bros. instead.
RASCOE: NPR culture correspondent Mandalit del Barco in our studio in Culver City, thank you so much.
DEL BARCO: Thank you. Transcript provided by NPR, Copyright NPR.
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