Paramount Skydance chief executive David Ellison has secured a commitment to release at least 30 films a year in cinemas as part of an agreement clearing a path for the company’s acquisition of Warner Bros Discovery.
The settlement with a group of US state attorneys general requires the combined Paramount-Warner Bros business to distribute at least 30 films in theatres in 2027 and 2028, rising to 32 films annually from 2029 to 2031.
The company currently has 35 films scheduled for release next year, according to Rentrak data. But the agreement has prompted questions over the quality and variety of those films, as well as what will happen when the five-year commitment expires.
Paul Dergarabedian, head of marketplace trends at Rentrak, said the issue was more complicated than the number of films alone.
“Thirty wide releases would represent a meaningful commitment to theatrical, and I think everyone in exhibition would welcome a robust pipeline of films,” he said.
“But ultimately the proof will be in how those movies perform, how varied the slate is, how consistently they reach theaters and how the combined company executes on those commitments.”
Paramount-Warner Bros acquisition raises cinema concerns
The agreement has been welcomed by Cinema United, the lobbying group representing cinema owners, which had opposed the merger but said the settlement “accomplishes many of exhibition’s objectives”.
However, some cinema executives remain concerned about the effect of consolidation on the industry. They fear the merger could reduce the number of studios supplying films, weaken competition and give the combined company greater leverage over screening arrangements and rental fees.
Smaller cinema operators are considered particularly vulnerable because they have less bargaining power than larger chains. The sector is still adjusting to fewer screens and lower audience numbers since the Covid disruption, despite higher ticket prices helping the domestic box office move towards $10 billion.
Rob Lehman, president and chief operating officer at Santikos Theaters, described the guaranteed output as “a win for the industry”, but questioned what would happen after the agreement ended.
“Of course, I worry about what happens in year six,” he said. “You know, after the five years is up, does it then drop down to 18 movies a year?”
Paramount will face a penalty of $30 million for each film it fails to release under the annual quotas. Ninety per cent of the money would go to film workers, with the remainder paid to the National Association of Attorneys General.
That fine could be significant if the company substantially misses its targets, although it is smaller than the cost of producing and marketing a film. The merged business is also expected to carry around $79 billion in debt once the deal closes, raising concerns over whether it can maintain the release schedule as costs increase.
A crowded theatrical release calendar
The combined slate for next year includes new films from franchises including Sonic, Godzilla, Minecraft, A Quiet Place, Teenage Mutant Ninja Turtles, Lord of the Rings, The Conjuring and the DC superhero universe.
Releasing 30 films in a year would mean fewer than two weeks between films on average. The schedule is further complicated by major premiere weekends and competition for premium large-format screens such as Imax and Dolby.
Paramount and Warner Bros currently have six dates in 2027 on which both studios are planning a theatrical release. Other periods contain between three and five releases in a single week.
Dergarabedian said release dates were likely to change to prevent the studios’ films competing against one another and to create a more consistent flow of box-office income.
The combined company has nine horror films scheduled for 2027, creating a further incentive to spread releases so that individual films have longer runs. Lehman said cinema owners wanted a broad mix of family, horror and action films.
Under the settlement, at least 20 films in each of the first two years after completion must be released widely in more than 2,000 theatres. That minimum rises to 21 films in each of the following three years.
The agreement also states that at least 20 per cent of annual releases must be “tentpole” films, defined for the purposes of the settlement as productions with budgets of at least $50 million.
Dergarabedian said that threshold was relatively low compared with the type of large-scale film traditionally regarded as a tentpole, although a $50 million production could still become a major box-office and cultural success.
“Quantity by itself is not enough,” he said. “It is about having enough movies, released at the right cadence, that audiences actually want to see.”
