The DOJ blocks proposed acquisition of Screenvision by National CineMedia
Acquisition would have given NCM a majority of the in-theater advertising market
The U.S. Department of Justice today said it would oppose the the acquisition of Screenvision by National CineMedia, Inc. (NCM) The companies sell cinema advertising in some of the largest digital in-theater networks, such as AMC Entertainment, Cinemark and Regal.
The acquisition of Screenvision would have given NCM a near monopoly of all U.S. movie theater screens.
“The proposed combination of NCM and Screenvision is a bad deal for movie theaters, advertisers and consumers. This merger to monopoly is exactly the type of transaction the antitrust laws were designed to prohibit,” Assistant Attorney General Bill Baer said. “If this deal is allowed to proceed, the benefits of competition will be lost, depriving theaters and advertisers of options for cinema advertising network services and risking higher prices to movie goers.”
“I am obviously very disappointed that the DOJ did not see the benefits of the new combined company to our advertising clients and their agencies and our exhibitor partners,” NCM Chairman and CEO Kurt Hall said in a statement. “We look forward to demonstrating those benefits. Combining NCM and Screenvision will enable us to offer advertisers a better product with the broader reach, ubiquitous geographic coverage, more advertising impressions, enhanced targeting capability, and lower costs that advertising clients and their agencies seek. With a better product we will generate more advertising revenue for our theatre circuit partners. Advertisers, exhibitors and shareholders all will benefit from this combination which will better enable NCM 2.0 to compete in the increasingly competitive video advertising marketplace.”
Shares of NCM slid almost 20 percent in afternoon trading on the news.
Update: man, talk about a bad day. National CineMedia reported Q3 earnings after the bell and said its revenue fell 25.4 percent to $100.8 million from $135.1 million for the same quarter last year. Net income also fell to $4.8 million from $13.7 in the prior year.