The three largest U.S. cinema chains reached agreements to show Walt Disney Co. (DIS:US)’s “Iron Man 3,” settling a revenue-sharing dispute that threatened the first big film of the summer movie season.
Regal Entertainment Group (RGC:US), the largest, and No. 2 AMC Entertainment Holdings Inc. were accepting online orders for the May 3 opening of “Iron Man 3,” the companies said yesterday. The No. 3 chain, Cinemark Holdings Inc. (CNK:US), also agreed to sell tickets, according to a Disney spokesman. Terms weren’t disclosed.
With the accords, Disney’s Marvel unit and the exhibitors avert a potentially costly dispute. The chains had resisted the studio’s demand for a bigger share of ticket sales. “Iron Man 3” is projected to be one of the biggest movies of the year, with opening weekend sales of $151 million in the U.S., according to Boxoffice.com. The summer season accounts for about 40 percent of annual domestic cinema sales.
“We thank our partners at Disney for working with us to achieve economical terms so we can present our guests with one of the biggest blockbusters of 2013 and solidly kick off the summer movie season,” AMC said in a statement yesterday.
Disney Chief Executive Officer Robert Iger has focused on franchise pictures like “Toy Story,” “Iron Man” and “Star Wars,” and is using its most popular films to seek better terms from theaters.
The Burbank, California-based company, which also plans to release “Monsters University,” “The Lone Ranger” and “Planes” this summer, has spent $15 billion since 2006 purchasing the Pixar, Marvel and Lucasfilm film studios.
Big budget movies typically command a larger share of the box-office take than the average for studios, which get about 52 percent of annual ticket revenue after cinema operators deduct a small percentage for overhead, according to Eric Wold, an analyst at B. Riley & Co. in San Francisco.
Disney had asked for as much as 65 percent of the revenue, the Los Angeles Times reported this week. Cinemark spokesman James Meredith didn’t respond to requests for comment. The other companies declined to discuss their negotiations in detail.
“‘Iron Man’ is going to be a hit no matter what, but you don’t want this kind of tension going into the most lucrative part of the year.” Phil Contrino, chief analyst for researcher Boxoffice.com, said in a telephone interview. “It’s a relief.”
“Iron Man 2,” released in 2010, opened with $128.1 million in U.S. weekend sales, according to Box Office Mojo. Last year’s top-grossing film, “Marvel’s The Avengers,” generated $207.4 million. Contrino said the slate of movies being released in May could lift results in the second quarter above last year’s.
Disney, the world’s largest entertainment company, was little changed at $61.95 at 10:18 a.m. in New York. The shares had climbed 25 percent this year through yesterday. Regal, based in Knoxville, Tennessee, slipped 0.1 percent to $17.64. Cinemark, in Plano, Texas, added less than 1 percent to $29.11. AMC is owned by China’s Dalian Wanda Group Corp.
Summer accounted for $4.3 billion of last year’s record $10.8 billion in ticket revenue in the U.S. and Canada, according to the researcher Box Office Mojo.
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