Cinema group says Europe went soft on Paramount-Warner deal
UNIC says Brussels approved the $110.9 billion merger without addressing wider risks for cinemas, film choice and distribution.
By Bianca Rossi · Entertainment Editor
3 min read
Europe’s cinema lobby is not applauding Brussels over the Paramount-Warner Bros. merger.
The International Union of Cinemas, known as UNIC, has criticized the European Commission’s clearance of the $110.9 billion deal, arguing that regulators looked at the transaction too narrowly and left major industry worries unresolved.
UNIC represents the European cinema trade across 39 territories, including theater operators and national cinema associations. The group was among the parties that submitted evidence to the Commission about the proposed tie-up and its possible negative effects on the sector.
Laura Houlgatte, UNIC’s chief executive, welcomed one condition attached to the approval: Paramount must end its film distribution partnership with Universal in Europe within 13 months.
But Houlgatte said that remedy did not go far enough. According to UNIC, the cinema sector raised a wider set of competition concerns with the Commission, and the final decision did not reflect that full picture.
“We strongly believe that the Commission could and should have gone further with its conditions for the merger’s approval,” Houlgatte said. She added that the regulator had based its decision on “too narrow a scope.”
What UNIC says Brussels missed
Houlgatte pointed to several areas that UNIC believes remain a concern for cinemas. Those include theatrical distribution arrangements outside UIP territories, theatrical release windows, film diversity, the protection of film output and production pipelines, contractual practices, and access to back catalogues.
She also linked those concerns to the deal’s situation in the United States, where she said the transaction continues to face legal challenges based on similar factors.
“It is clear that these broader concerns about the merger remain unresolved and unanswered,” Houlgatte said, adding that UNIC will watch developments in the U.S. and any possible consequences for Europe.
UNIC also expressed disappointment that the European Media Board, an independent advisory body, did not review what Houlgatte described as the wider implications of the merger. The group said those implications include possible knock-on effects for media pluralism, cultural diversity and the audiovisual market.
The conditions attached to approval
The European Commission’s approval came with restrictions on how Paramount can distribute films in Europe after the merger.
Along with the requirement to end Paramount’s European distribution partnership with Universal within 13 months, the conditions prevent Paramount from co-distributing films with Universal in the EAA.
The Commission also barred Paramount from using its distributor to handle Warner Bros. films in certain countries where that same distributor already handles Universal or Disney titles, among other limits.
For UNIC, those measures answer only part of the cinema industry’s worry list. The group’s message to Brussels is blunt: splitting up some distribution links may help, but it does not settle the bigger questions about market power, film supply and choice on European screens.
This story draws on original reporting from Variety.