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TOPIC: Clearance?

Clearance? 18 May 2005 03:41 #24870

Hi all! Great Forum! I am a newbie but Ive done my homework (the basics at least). If one plans on building a multiplex that is given 'Clearance' by a major chain...what is the next step? Can the film studios simply deny you product outright? I understand it is not very 'pc' of them to do...but seriously...can they still get away with it? What is the process for applying for films. DO you really have to build the building first? Thx for the input
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Re: Clearance? 18 May 2005 09:49 #24871

  • rodeojack
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This is an extremely variable issue that's one of the more "fun" parts of theatre politics. There's no stock answer to dealing with it. If you have a clearance problem, you have some work ahead of you to get it dealt with... if that turns out to be possible. However, in some cases, it can be done.

The master license between the studio and exhibitor mentions this subject. Most of them have wording that says an exhibitor can request (in writing) a clearance over another. My hunch is that this would give the studio an "out", should a cleared theatre choose to fight it out in an "official forum". I personally have never seen such a document, though.

Whether you're dealing with an actual clearance or not, however, the studios could tell you that they can "place their product where they think it will generate the most revenue"... which adds a huge variable to your potential life as a businessperson.

However, it's also true that the studios are out there to make money... so chances are that if there is a clearance, it will relate to your physical separation from another theatre, your daily show schedule or perhaps your theatre's past revenue history. But... it could also relate to personal issues, such as who you are, who your booker is and/or who your competition is and who they know.

As for your question, whether you have to put up the building first... it's an easy answer to a larger question... but basically, if you put up a building within another guy's reasonable drawing area, and you don't happen to also own several thousand other screens, you might find it tough to get film. At best, you might end up with some kind of allocation that puts some pictures in your place, and some in the other theatre.

If you're being touched by this issue, you should find a well established booker who can help establish your relationship with the studios... either that, or explain to you why it could be tough for you to bring in the kinds of films you want. Unless you have a very even temper, this issue can get very personal, and THAT can have lasting effects on what relationship you do have with the studios. This could be the make-or-break issue for any independent theatre, so if you talk to someone who tells you it's a lost cause, getting a second opinion might be wise.

[This message has been edited by rodeojack (edited May 18, 2005).]
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Re: Clearance? 19 May 2005 01:33 #24872

Thx Rodeo...great response. From what I am told so far...we will def. be cleared. The key ? becomes...knowing that...is it worth it to go in splitting product at best. We plan to build a building that will be superior so will help our cause. But an independent vs. REGAL does not sound very plausible. I read on a previous post that you can play with anyone anytime...as much as I believe in the thought it sure does not sound realistic. Looks like we got a tough one on our hands...yikes.
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Re: Clearance? 19 May 2005 10:42 #24873

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If you're going up against Regal, I'd say you've got a LOT of ducks to line up before you should be tossing up a new building. As for the superiority of your new facility; don't get caught up in emotion right yet. With all due respect to Regal, they could have a total dump next to your brand new theatre and STILL have you so cleared, you would't see film until the DVD's wore out. Even now, there are stories all over the web about independents who say they've got better theatres than their chain-store competitors'. In most cases, guess who's got Star Wars?????

Seriously though, it sounds like you'd be close enough to your prospective counterpart, that there won't be any 'day and dating'... which means the titles will only play at one theatre or the other. This also means that both of you will have to keep prints on your screens until fresh material comes along to replace it. If you don't have enough population for the combined screen count, both theatres could fail. This would probably have a greater effect on your economy than a chain's, since they've got the infrastructure to spread the loss over.

In any case, they probably won't let themselves be put in such a position without a fight, so you've got a big job ahead of you.

Good luck!
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Re: Clearance? 24 May 2005 00:12 #24874

Rodeo-Thx for the info...always helps. Frankly, Im surprised that you were the only one to resond to this issue. Not to knock the credibility of this forum as it obviously is a wealth of knowledge...but I am surprised you were the ONLY ONE to chime in on what seems to be the most important singular issue in the industry.
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Re: Clearance? 24 May 2005 07:42 #24875

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WHat is the average miles you should have so you dont run into a clearence problem???/
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Re: Clearance? 25 May 2005 09:44 #24876

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Slap: It's not quite that simple. Mileage is one of several factors a studio can toss in your way. The studios want to make money. At the same time, there's no point to putting another ($$$) print in a market that they think is already adequately covered. They obviously won't let you operate across the street from your competition. If your distance is less than 5-7 miles or so, you might have to make your case. I did that once... showing a distance/population/proximity-to-market comparision that was equal to two other theatres in my area. It made a statement that was difficult to argue, while supporting the other theatres at the same time. In my particular case, that approach worked. If you feel your situation might also be marginal, it will be your job to convince the studios that you can draw new market and not just peel off customers from the other guy.

HOLLY: Don't read too much into the lack of response from others here, or take offense. I answered your question because it's an issue I've personally dealt with (more than once) in the 35+ years I've been around this business. There are many here who are at least as involved in this industry as I... quite a few who are more so, as a matter of fact. Your question is not a new one, and as you're admittedly new here, it's generally felt that you should study the available postings on this board (and others) first. Some here have said the same things several times already, so in many cases, the information you're looking for has already been posted.

[This message has been edited by rodeojack (edited May 25, 2005).]
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