Some exhibitors won’t agree to Disney’s “top-secret terms.”
We’re only six weeks away from the latest Star Wars film, Star Wars: The Last Jedi, and anticipation for the movie is building to a fever pitch. Disney provided fans a Star Wars fix last December with Rogue One: A Star Wars Story, but moviegoers have been waiting nearly two years for The Last Jedi to catch up with Rey, Finn, Kylo Ren, and Poe and reveal the fate of the Skywalker clan. And just as fans are preparing to geek out in movie theaters across the country, there are reports coming out that some theaters are refusing to run The Last Jedi, the year’s most anticipated film.
/Film is reporting (via The Wall Street Journal) that the Walt Disney Company’s acquisition of Marvel and Lucasfilm has given them an inordinate amount of power and influence over the exhibitors who screen their films. The article states:
For Rian Johnson‘s The Last Jedi, Disney is forcing theaters to agree to secret terms which many theater owners are calling “the most onerous they’ve ever seen.
Some theaters are pushing back against Disney’s demands by refusing to show The Last Jedi. The article lists Disney’s terms as follows:
Those terms include the fact that Disney will receive 65% of revenue from ticket sales, the highest percentage a Hollywood studio has ever demanded. They’re also forcing theaters to screen the film in their largest auditorium for at least four weeks. For previous Star Wars movies, the studio has required 64% of the revenue from ticket sales and four-week commitments, but typical Disney movies only require a two-week commitment.
Theaters breaking these conditions must face a penalty, dishing out an extra 5% of their ticket revenue, bolstering Disney’s cut to 70%. Typically, studios require that theaters provide 55-60% of ticket sale revenue for domestic releases.
According to Box Office Mojo, Star Wars: The Force Awakens averaged $59,982 in ticket sales per theater and Disney’s extra 1% cut of profits amounts to $599.82. That 1% increase may not seem like a lot to ask for, but there are plenty of other factors you must consider regarding Disney’s demands. First off, Disney is a corporation in the business of making profits. If Disney can raise their percentage to 65% now, what’s stopping them from jacking up ticket prices above average rates every time they release a hot film? And if Disney can keep raising the percentage of their ticket sale revenue, what’s keeping other studios from following their precedent?
Additionally, not every theater is a sprawling multiplex with a dozen auditoriums. Smaller theaters and theaters in isolated areas will remain stuck screening Star Wars well into its run and long after demand for the film dies down. And if theaters must run Star Wars in one of their prime auditoriums, it means that’s one less screening room to run other major holiday releases.
With summer ticket sales down from previous years, both studios and theater chains are looking for ways to make extra cash. And if theater chains must eat more expenses then they’ll pass the costs down to moviegoers. It’s clear the theatrical entertainment model needs an overhaul, but no one has figured out how the industry should move forward. The only certainty is that increasing ticket prices will drive customers away. I get the feeling that we’re only seeing the beginning of these types of studio versus exhibitor squabbles.