Cinemark Holdings Inc., the nation's third-largest theater
chain, told shareholders Tuesday it received a request for
information and documents as part of an investigation by the U.S.
Department of Justice's antitrust division, an announcement that
now means all three of the nation's biggest movie theater companies
are facing government scrutiny.
Cinemark received a civil investigative demand from the Justice
Department seeking information on its participation in certain
joint ventures and the use of exclusivity agreements known in the
industry as "clearances." The company's chief rivals, Regal
Entertainment Group and AMC Entertainment Holdings Inc., made
similar disclosures on Monday.
"Although we do not believe that we have violated any federal or
state antitrust or competition laws, we cannot predict the ultimate
scope, duration or outcome of these investigations," Cinemark said
in a notice filed with the Securities and Exchange Commission. All
three chains disclosed similar requests from the office of the
attorney general of Ohio.
The government is scrutinizing the major exhibitors' use of
"clearances," which allow circuits to play certain titles
exclusively in a given market. The agreements, which have been used
in the exhibition industry for decades, have recently become a
contentious topic in light of growing theater construction and
increased competition.
The disclosures on Monday sent AMC shares falling before
stabilizing on Tuesday. AMC shares closed down 12 cents on Tuesday,
at $27.87. Regal shares closed down 17 cents, at $20.73. Cinemark
announced the investigative demand after the market closed; its
shares had settled at $39.85, down 48 cents.
Write to Erich Schwartzel at erich.schwartzel@wsj.com
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