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Updated: 2:47 p.m. Friday, Jan. 24, 2014 | Posted: 11:57 a.m. Friday, Jan. 24, 2014

CinéBistro suing AMC over access to top movies

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CinéBistro suing AMC over access to top movies photo
Birmingham-based Cobb Theatres, which owns CinéBistro at Town Brookhaven, said AMC is using its market dominance to coerce film distributors to deprive Cobb access to top-grossing films. (AJC)

By Christopher Seward

The Atlanta Journal-Constitution

The owner of CinéBistro, an upscale north Atlanta theater featuring valet parking, reserved seating and fine dining, is suing rival AMC Entertainment, claiming the mega chain has pressured movie distributors into limiting new releases to its smaller competitor.

In the antitrust suit filed this week in U.S. District Court in Atlanta, Birmingham-based Cobb Theatres, which owns CinéBistro, said AMC is using its market dominance to coerce film distributors to deprive Cobb access to films and to coerce landlords to not lease theater space to the company.

Cobb said it is seeking treble damages, although the 42-page suit does not mention a specific figure or how much CinéBistro’s business has been damaged financially.

AMC spokesman Ryan Noonan declined to comment. “AMC does not comment on pending litigation,” Noonan told The Atlanta Journal-Constitution on Friday.

CinéBistro, a seven-screen, 758-seat theater, is located at Town Brookhaven on Town Boulevard. The theater competes with the 14-screen AMC Phipps Plaza in Buckhead and the six-screen AMC Fork & Screen Buckhead at Lenox Square.

All three are the only theaters in the Buckhead-Brookhaven area competing to license films from distributors such as Sony Pictures and Warner Brothers Pictures. AMC accounts for 69 percent of the licensing agreements, according to the suit.

Kansas City, Mo.-based AMC is the second-largest theater operator in the country after Regal Entertainment Group. AMC has 343 locations and a total of 4,937 screens. The company is 80 percent owned by Dalian Wanda Group, a Chinese company.

CinéBistro at Town Brookhaven is one of seven locations Cobb operates in Georgia, Florida, Virginia and Colorado. Cobb owns, operates or holds interests in 19 theaters, with 231 total screens.

Cobb said the battle with AMC began in 2008 when both competed for leased theater space at the planned Town Brookhaven retail complex. Cobb said it prevailed and started building CinéBistro in 2010. The theater, which has high-back leather seating and no on-screen advertising, opened the following year in September.

After an AMC management restructuring in 2009, the suit claims, AMC’s new leadership launched a national campaign to demand exclusive agreements with film distributors in certain competitive markets, including the Buckhead area. With the so-called “clearance” agreements, a distributor agreed it would not license a film to play or run at the same time with a competing theater in the area.

Cobb said AMC also entered into “circuit deals” with distributors, releasing new films simultaneously on as many screens and at as many locations as possible in the first few weeks to maximize revenue.

Because of such deals between AMC and major distributors, CinéBistro has generally been allocated “substantially fewer of the highest-grossing, most popular films” and it has been limited to showing the films on three to four of its seven screens, Cobb’s suit claims.

Cobb said that between Jan. 1 and Oct. 27 last year, the only films Sony Pictures licensed to CinéBistro at Town Brookhaven were the space station thriller “Elysium,” starring Matt Damon and Jodie Foster, and the Somali pirate thriller “Captain Phillips,” starring actor Tom Hanks.

During the same period, the suit says, Sony licensed to either or both AMC Phipps Plaza and the AMC Fork & Screen “After Earth,” “The Amazing Spider-Man,” “Battle of the Year: The Dream Team,” “The Call,” “Carrie,” “Evil Dead,” “Grown Ups 2,” “The Mortal Instruments,” “One Direction: This Is Us” “White House Down” and “Zero Dark Thirty.”

Cobb said Warner Brothers Pictures licensed “The Hobbit: The Desolation of Smaug” to CinéBistro on the condition that the film be shown on only four of its seven screens.

Paul McGuire, a spokesman for Warner Brothers, said the distributor would have no comment on the suit. Efforts were being made to contact Sony Pictures for comment.

“In order to survive economically, an exhibitor needs fair competitive access to films,” Cobb says in its lawsuit, adding that AMC’s practices “have the effect of denying Cobb, at least in part, the revenue it needs to stay in business” and limiting moviegoers’ theater choices.

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