Since January, Landmark Theatres and Regal Entertainment have been at odds in federal court in DC in a lawsuit from Landmark, which operates the six-screen Atlantic Plumbing Cinema in Shaw, accusing Regal, the nation’s largest cinema chain, of preventing it from showing big releases.
In its suit, Landmark claims Regal, which owns the 14-auditorium theater at Gallery Place, has been abusing its “clearances”—agreements between studios and cinema operators over how many theaters in a specified radius can show a film when it’s released—to keep blockbusters like Star Wars: The Force Awakens and Spectre out of other cinemas in or near downtown DC. Landmark’s suit also claims Regal threatened studios with boycotts if any their major titles showed up at Atlantic Plumbing.
Clearances are one of the movie business’s oldest practices. A cinema asks the studio to “clear” a market, meaning other theaters within a specified radius can’t show the same film when it opens—what the industry calls “day and date.” And most studios, which depend on theater chains for their box-office totals, go along with the system. Landmark, which specializes in prestige and foreign films at its 56 locations around the country, has been accused of doing to the former owner of DC’s three-screen West End Cinema (which Landmark now owns) what it is suing Regal for.
The practice of clearances, however, has been upheld in previous court cases. “As one court summarized, clearances ‘are commonly used in the film exhibition industry, as they ensure that a particular theater’s income from a film will not be greatly diminished because the film is also being shown at a nearby competing theater,’ ” Regal’s lawyers wrote in a motion to dismiss filed April 19.
But one of Landmark’s core arguments in its case—that it can make the local film-exhibition business more competitive by showing the same titles as Regal—will be put to the test this weekend when X-Men: Apocalypse opens at both Gallery Place and Atlantic Plumbing.
Nothing has changed in the court proceedings—the two theater chains are still going at it, with Landmark most recently filing its response to Regal’s motion to dismiss—but 20th Century Fox, which produces the X-Men series, announcing that it will no longer honor exhibitors’ requests to “clear” markets. Fox’s new policy goes into effect with X-Men: Apocalypse, though other big studios, including Disney and Sony, haven’t changed their policies. “Clearances are good for business,” an anonymous executive from an unnamed studio told Deadline Hollywood when Fox announced its new policy.
Fox’s decision also comes when federal courts and the Justice Department are taking a much broader look at the clearance practice. IPic Theaters, a small chain of upscale movie theaters (including one at the Pike & Rose development in North Bethesda), won an injunction against Regal in Houston in January; in 2015, Georgia-based Cobb Cinemas, a 20-venue chain including one in Leesburg, sued AMC Entertainment, the second-biggest cinema chain, over the same issue. Last July, the Justice Department’s Antitrust Division started investigating Regal and AMC’s use of clearances.
In its original lawsuit and subsequent motions in the DC case, Landmark has argued that it will show big box-office draws to audiences it says are turned off by Gallery Place, which is marked by “long lines, dirty bathrooms, harsh neon lighting, unpleasant crowds, and sold-out shows,” Landmark’s most recent filing reads. By comparison, the Atlantic Plumbing theater “offers an intimate and upscale experience, with premium food and alcohol and oversized, plush leather seats.”
Landmark is already planning the amenities for its first blockbuster opening. Viewers of X-Men: Apocalypse will be able to sip on cocktails inspired by the film’s characters, including main bad guy Apocalypse (a millennia-old mutant capable of seemingly unlimited destruction and played by Oscar Isaac) and his four horsemen, Magneto (Michael Fassbender), Psylocke (Olivia Munn), Storm (Alexandra Shipp), and Angel (Ben Hardy).