How the Disney-Fox merger could reshape European cinema

How the Disney-Fox merger could reshape European cinema

Ahead of CineEurope, which ran June 17-20 in Barcelona, local exhibitors opened up about their concerns that the deal gives the behemoth way too much leverage.

European exhibitors will soon gather at CineEurope in Barcelona for the usual early morning popcorn and soda binges and mad scrambles for free T-shirts (and, occasionally, plush toys). But there’s going to be something different this year: Where there once were five major studios, now there are four. CineEurope will be the first exhibition conference to be held across the Atlantic since Disney completed its $71.3 billion acquisition of Fox assets, and executives are wondering just how the company is going to cram everything on its bumper slate into one hourlong presentation June 19 — and how the monolithic cinematic force will impact their business.

When the proposed merger went before the European Commission, it noted that Disney-Fox would still face major competition from Sony, Universal and Warner Bros. However, many in the industry are wary of the added muscle that Disney surely will flex when it comes to negotiating rental conditions over its films. They see a repeat of last year’s dominance, when Disney — led by Avengers: Infinity War, The Incredibles 2 and Black Panther — and Fox — with Bohemian Rhapsody and Deadpool 2 — overpowered box office in Europe. (Films from the two studios claimed four of the top five spots in the U.K. and Spain in 2018.)

“What was already one of the most powerful companies in the industry just got more powerful,” says an exec at a U.K. exhibitor. “Where there used to be a poker table where everyone had a roughly similar set of cards, there’s a very real concern that the pack is now very much weighted in their favor.”

Christian Brauer, president of the European association of art house exhibitors known as CICAE and president of the German art house exhibitors association AG Kino, is among those worried about the Disneyfying of Fox. The latter, he says, had been a “great partner” for independent exhibitors when it came to negotiating revenue splits — as a rule of thumb around 50-50, but the bigger the film, the more the studio can demand — and a guaranteed number of screens.

“It’s no secret that Disney has often imposed much harder, more difficult conditions on cinemas, particularly on the independent and regional theaters,” Bauer says. “Disney has long made it clear that what they would like is to bring out their films on every possible screen, fully booked, for three weeks straight.”

European execs also admired Fox for supplying audiences with a steady supply of stand-alone hits, which recently included The Revenant, The Greatest Showman and The Martian. They fear Disney’s emphasis on pre-branded franchises. “There’s definitely a concern that we’ll lose content that speaks to a broader, more diverse audience,” says one insider. (The continued operation of Fox Searchlight, which recently picked up Terrence Malick’s World War II drama A Hidden Life at Cannes, may have put some minds at ease, at least temporarily.)

With the merger only a few months old, its true impact is yet to come. “Maybe we’re still in the early stages, or at best mid,” says Phil Clapp, CEO of the U.K. Cinema Association. “But certainly, all the signs we’ve seen of how this will play out are positive.”

Exhibitors can’t complain about Disney films’ performance, with Avengers: Endgame smashing records across the continent and “reminding people of the power of cinema,” as one operator notes. With the movie still No. 1 in many markets a month after opening, and followed in many territories by stablemates Captain Marvel and Dumbo, what theater owner would grumble?

“There’s only so much you can do without killing the goose that laid the golden egg,” says Karsten Grummitt of U.K. cinema research firm Dodona Research, “so effectively, [exhibitors are] resigned to the situation.”

Source: The Hollywood Reporter

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