Cranston's Cinema Palme d'Or Closes Due To 'Clearances'

Last year CMG reported that a Palm Desert cinema, the Cinema Palme d'Or - a small, independent cinema - was being financially hurt because of the practice of clearance booking policies. But unlike most independent cinemas this one happened to be owned by actor Bryan Cranston and ESPN show-host Steve Mason.

Unfortunately, the Cinema Palme d'Or had no choice but to shutter its doors this week after a 13-year struggle with the large theater circuits. Cranston commented, "Cinemark finally succeeded in driving the last nail in our coffin. We just couldn't continue the struggle in this unfair business climate."

A letter sent to the studios by Cranston and Mason stated, "We could no longer stay solvent because of Cinemark's constant pressure on studios and distributors to shut us out of major titles.  We have fought hard, but clearance booking has made it impossible to stay in business."

Clearance, is what I would call a privilege system, whereby large theater circuits get the exclusive privilege of screening a movie at the exclusion of other exhibitors (smaller independents) within a certain geographical area.

Steve Mason told CMG, "To give you an example of how much pressure Cinemark exerted on the studios to prevent us from playing certain films, take 'Star Wars'.  For any independent cinema, 'Star Wars' could make your year, we knew it was a must to have this film. So, we offered to pay Disney 100% film rental, every penny from every ticket, and Disney said no.  Then, to really make our point, we offered 150% on every ticket and they still said no.  We also offered Sony 100% on 'Spectre' and were declined.  This is what put us out of business." Cinema Palme d'Or has been engaged in a lawsuit with Cinemark since 2006 and that suit will continue.

To its credit, Fox Entertainment recently stated that it would no longer honor clearance bookings but no other studio has followed Fox's example.  The National Assoc. of Theater Owners (NATO), which is commonly known to be the stooge of the studios and large circuits, weaseled-out of the clearance issue by stating, "NATO does not concern itself with distribution issues".

The U.S. Department of Justice has been investigating the anti-trust aspects of clearance bookings by the studios and the Cinemark, Regal, and AMC theater chains, but in typical DOJ fashion under the Obama administration, the investigation has been on-going for almost two years with no resolution in sight. In another lawsuit, brought by iPic Theaters against Regal Entertainment in Texas last January, iPic won a reprieve and the Judge in that case has ordered Regal to stop the practice of clearance bookings in Texas.

And so the battle goes on. CMG believes that clearance booking is a restraint of trade and should be stopped. Like Fox, the other studios should bar the practice and make the playing-field level and fair. To believe that the large circuits would not screen blockbusters (even one) because they didn't get clearance is fantasy - they need the films to survive just like the little guy. We might add, that if the small, independent exhibitor has that much of an impact on their business success than perhaps the circuits need to take a hard look inward.

It should be noted that the 9 screen Palme d'Or will re-open under new management, the Tristone Cinema Group, and will continue with screening 'arthouse' films and the clearance war.

Just saying,
Jim