The Great Unknown: What a Warner Bros.-Paramount Merger Means for Movie Theaters

As the proposed merger between Paramount and Warner Bros. navigates regulatory hurdles, movie theater owners are left wondering what’s at stake. With nearly 50 years of experience in the trenches of this business, I’ve learned that simple answers often mask more pressing concerns.

Let’s set aside the notion that a merger would be bad for theaters. The real question is: if the deal falls through, will we have the luxury of waiting to find out? Movie theaters need movies – plain and simple. We can upgrade our seats, improve projection and sound systems, or offer fancy concessions, but none of that matters without a steady supply of films people want to see.

The studios’ financial health is crucial to our business. There’s a misconception about the impact of home entertainment on theatrical exhibition: the past 40 years have seen a complex interplay between home video, streaming, and movie theaters. These platforms often complement each other – just as people still go out to eat at restaurants despite having kitchens.

The key is balance – not eliminating the theatrical window entirely but giving films time to become events before moving on to other platforms. This allows them to increase their subsequent value, benefiting both studios and exhibitors.

Warner Bros.’ challenges persist regardless of the merger’s outcome, including questions about its ownership and strategic direction. Decisions about which films to develop and finance will continue to be made with increased uncertainty. The pandemic has taught us the value of a steady release calendar – any disruption can have far-reaching consequences.

The real danger isn’t consolidation itself but prolonged corporate uncertainty. A delay carries immediate financial costs for Paramount, including the ticking fee that begins on October 1st, which amounts to additional merger consideration owed to Warner Bros. Discovery shareholders.

Let’s not lose sight of what’s at stake: fewer movies entering production could ultimately hurt both studios and exhibitors alike. It’s time for regulators to consider the bigger picture – what happens when investment stops? In an industry where major films often require years of development, a decision postponed today can become a missing film several years from now.

Regulators should ask not only whether combining Paramount and Warner Bros. creates risks but also: Compared with what? A steady stream of movies is what exhibitors need to thrive – and that’s precisely what the merged entity has promised. Extending this commitment to five years would provide greater stability for us, strengthen the position of the combined company, and give the industry confidence in its long-term plans.

Consolidation isn’t always bad – but we must be careful not to assume it’s good simply because it’s happening. Market power can be abused, and any significant transaction deserves close scrutiny.

In the end, studios and theaters participate in the same ecosystem. They need each other: studios require theaters to turn films into cultural events, while exhibitors rely on studios for a steady supply of movies. When investment stops, industries suffer – not because too many people are making long-term investments but because they’re no longer willing or able to take risks.

As regulators consider this merger, let’s keep the bigger picture in mind: what we really need is more movies, properly marketed and with enough time to become events in theaters. Anything less would be a recipe for disaster – not just for movie theater owners like me but for the entire industry.