AMC Theatres has declared war against Universal Studios. And Trolls World Tour, of all films, is the inciting gunshot. AMC Theatres has announced that it will no longer screen Universal’s movies following comments by NBCUniversal CEO Jeff Shell that the studio plans to release more films day-and-date both theatrically and on VOD following the unprecedented digital success of Trolls World Tour. That’s a supremely dramatic movie that would result in AMC losing out on money from major upcoming tentpoles like F9 and Jurassic World: Dominion. But in a time of profound uncertainty, a petty standoff between studios and movie theater exhibitors is just the cherry on top.

AMC Theatres CEO Adam Aron announced in an open letter to Universal Pictures Chairman Donna Langley that the movie theater chain would no longer screen Universal films after Shell indicated in a Wall Street Journal story that theaters are no longer the priority for the studio following the digital success of Trolls World Tour. “The results for Trolls World Tour have exceeded our expectations and demonstrated the viability of PVOD,” Shell told WSJ. “As soon as theaters reopen, we expect to release movies on both formats.”

This statement sent ripples through the movie exhibitor community, leading Aron to quickly release the open letter declaring AMC’s intention to block all Universal releases from the theater chain’s locations. Aron wrote:

“It is disappointing to us, but Jeff’s comments as to Universal’s unilateral actions and intentions have left us with no choice. Therefore, effectively immediately AMC will no longer play any Universal movies in any of our theatres in the United States, Europe or the Middle East. This policy affects any and all Universal movies per se, goes into effect today and as our theatres reopen, and is not some hollow or ill-considered threat.”

AMC Theatres is the largest movie exhibitor chain in the country, but has been on the precipice of bankruptcy ever since the coronavirus (COVID-19) pandemic hit. The theater chain has shuttered all its locations since mid-March out of abundance of caution for coronavirus, but states that it plans to open up again, in limited capacity, for major upcoming blockbusters like Tenet and Wonder Woman 1984.

However, Aron also warned in the letter that the chain is willing to do the same to other studios that make similar moves as Universal, which shook up the entire industry when it gave Trolls World Tour a day-and-date release theatrically and digitally. The movie made a record-breaking $95 million in digital rentals in the 19 days since its release, which warmed Universal to the idea of abandoning the long-held theatrical window. But the National Association of Theater Owners, who initially condemned Universal’s release of Trolls World Tour, insisted that the success the animated film enjoyed was due to the coronavirus lockdown, and not any permanent shift in moviegoing habits.

“Universal does not have reason to use unusual circumstances in an unprecedented environment as a springboard to bypass true theatrical releases,” NATO president and CEO John Fithian said in response to the WSJ story. “We are confident that when theaters reopen, studios will continue to benefit from the global theatrical box office, followed by traditional home release.”

Universal Responds

Following AMC Theatres’ dramatic letter, Universal walked back Shell’s comments and affirming that the studio “absolutely believe in the theatrical experience and made no statement to the contrary”:

“Our desire has always been to efficiently deliver entertainment to as wide an audience as possible. We absolutely believe in the theatrical experience and have made no statement to the contrary. As we stated earlier, going forward, we expect to release future films directly to theatres, as well as on PVOD when that distribution outlet makes sense. We look forward to having additional private conversations with our exhibition partners but are disappointed by this seemingly coordinated attempt from AMC and NATO to confuse our position and our actions.”

NATO took umbrage with this statement and moved itself to ally itself more closely with AMC Theatres following Universal’s response to AMC Threatres, accusing Universal of having “a destructive tendency to both announce decisions affecting their exhibitor partners without actually consulting with those partners, and now of making unfounded accusations without consulting with their partners.” But NATO distanced itself from AMC Theatres’ open letter, saying in a later statement that, “NATO had no involvement with nor knowledge of that letter before reading about it in the press.”

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