Why the Paramount-WB Merger Will Be Terrible for Theaters

Plus: It’s ‘Odyssey’ Week! Get your Nolan on.

Hey, a quick programming note before we get started: I’m going to be doing a live chat all about Christopher Nolan on The Bulwark’s Substack page at 2 p.m. Eastern this coming Monday. We can discuss what you think about his latest, The Odyssey, debate which of his films is the best and which is least-best (none of them are bad), or just laugh at some of the idiotic controversies that have swirled around his films over the years. Click this link to join on Monday. In the meantime, hop in the comments here and let me know if you made it out to the big movie this week . . . and what format you saw it in. So many formats, so little time.

The live chat is just for Bulwark+ members—so if you’re not already a member, now’s a great time to sign up. Our members make possible our growing coverage of movies, books, arts, and culture here at The Bulwark. We make most of that content available for free—like Alyssa Rosenberg’s great breakdown of two new books about The Odyssey—so signing up to partake in the chat will help keep such efforts sustainable.

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(Photo illustration by Sarah Rogers/The Bulwark | Photos: Shutterstock)

World Ends, Movie Theaters Hardest Hit

It’s nice to have a big new movie in theaters like The Odyssey, because the buzz at the multiplex and in the online chatter is palpable. Folks are excited and that excitement carries over for months to come. Nothing helps sell movies like a big movie: People see trailers, they get excited for future films, and the cycle repeats.

Enjoy it while it lasts! If there’s one refrain from the latest rounds of legal filings and public statements, it’s that the Paramount–Warner Bros. Discovery merger is likely to result in the closure of some number of them.

It is, I think, noteworthy that, in their filing asking for an injunction delaying the merger, California’s Rob Bonta and the other state AGs led the list of victims thus: “This proposed $110 billion merger, the largest in Hollywood history, would extinguish competition between Paramount and Warner Bros. and inflict substantial harm on movie theatres, basic cable distributors, and, ultimately, audiences nationwide.”¹ Not the workers of these companies, or the shareholders, but the theaters.

Here’s the basic reasoning:

Paramount and Warner Bros. compete fiercely to create and disseminate new, different, and innovative film and television content to American audiences. To promote their films, they negotiate with thousands of movie theatres across the country. They bargain with those theatres to secure the most coveted screens. And they negotiate a range of terms, including box office revenue splits, minimum ticket prices, caps on discounts, limits on complimentary tickets, and theatrical exclusivity windows. Movie theatres rely on competition between Paramount and Warner Bros. Through this competition, theatres incentivize creativity and quality, and they secure competitive prices and terms for themselves and for audiences.”

How fierce that competition truly is can be debated; the number of distributors and major releases have dwindled enough that theater owners are often forced to just take what they can get. And certain studios have amassed enough power at times to force drastically unfavorable terms, as when Disney was taking upwards of 70 percent of grosses and requiring extended runs of Marvel Cinematic Universe films on their biggest screens regardless of how well they were playing.

Theaters have been in a precarious position ever since the pandemic shutdowns, which were followed by a calamitous dual writers and actors strike that stifled the production lines and kept movies from flowing back into theaters in a timely fashion. And all this was preceded by the merger of Disney and 20th Century Fox, which had a disastrous impact on the overall number of movies released:

(Chart courtesy of The Entertainment Strategy Guy.)

This is why the head of the theatrical trade group Cinema United, Michael O’Leary, was pretty blunt earlier this year on the question of a merger: “If Paramount buys Warner Bros. and production drops, there’s no question that theaters will close.” To assuage these concerns, David Ellison has insisted that Warner Bros. and Paramount will combine to release thirty movies a year. They swear it! Pinky promise!

And maybe they will. Stranger things have happened, I suppose. But the simple truth is that we have no reason to believe him and every reason from examining the history of studio mergers to believe that’s unlikely to happen. This promise is what regulators refer to as a “behavioral remedy” (as opposed to a “structural remedy,” like a divestiture). And if Paramount-Skydance doesn’t hold to that promise? Well, there’s not a whole lot that can be done about it, as Bonta told Matt Belloni on “The Town” this week: “Behavioral remedies just are tough to realize. And even in [the] Ticketmaster [merger with] Live Nation, there were behavioral remedies in that case, in a consent decree from years ago, and we ended up in court with them again for violation of antitrust law, and won on every single question posed to the jury.”

Look, I’m not a lawyer and I’m not an expert in antitrust law; I’m a humble film critic who loves going to the movie theater. I can accept that blocking this merger at the state level is pretty unlikely. But I don’t think any of us should pretend that the merger won’t have consequences for the movie business writ large, some of them quite deleterious.

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Review: Christopher Nolan’s The Odyssey

Matt Damon as Odysseus in The Odyssey. (Courtesy Universal Pictures)

SPEAKING OF THEATERS, The Odyssey is out now and playing in about fifty different formats. For starters, there are IMAX, 70mm, and 70mm IMAX, which are, believe it or not, three entirely distinct formats. Amazing stuff. I saw it in IMAX at the press screening and attempted to place it within Nolan’s broader body of work:

Nestled in between his Batman films was a sort of shadow trilogy. And while The Prestige, Inception, and Interstellar couldn’t seem more different—a period magic drama; a near-future sci-fi action flick; and a Spielbergian space adventure—they are all connected by a thematic unity, the drive of parents to reunite with their children. Watch them all in order; it’s a series of films about semi-negligent fathers attempting to protect, and get home to, their kids. That’s what drives the action in each of them, and it’s the best rejoinder to any dolt out there who insists on calling Nolan a robotic fashioner of multiplex puzzle boxes.

His three most recent films—Tenet, Oppenheimer, and The Odyssey—are, on the surface, also radically different. A Bond-inflected sci-fi adventure film; a historical drama about the fashioning of the atomic bomb; and a recreation of one of the West’s foundational myths. But they too have an underlying thematic unity, albeit one that’s a bit darker than his other films. They are, all of them, fascinated by the human compulsion toward self-destruction. Toward annihilation.

The Odyssey, then, is the conclusion of Nolan’s Death Drive Trilogy.

Look, I don’t want to freak anyone out, but our greatest pop filmmaker has become obsessed with an onrushing apocalypse. Whether or not this has anything to do with the existential threat faced by his beloved theaters, well, I leave to you to determine. Read the whole thing here.

1. Emphasis mine. British spelling of “theaters” theirs.