Majors battle Spanish fines

Warner Sogefilms petition to annul the judgment

MADRID — Hollywood studios have decided to get tough on Spain’s allegations of price-fixing and collusion in release strategies.

The majors recently applied for suspension of the $15 million joint fine that was slapped on them in May. Warner Sogefilms, a now-lapsed joint venture between Warner Bros. and Spain’s Sogecable, said it had petitioned Spain’s Audiencia Nacional — its court of appeal — to annul the judgment. Sony, BVI and UIP told Variety they’d followed suit. A Hispano Foxfilms source said the matter was with its lawyers.

The studios are ready to fight back.

“We absolutely refute with total conviction suggestions that we colluded with our competition on terms,” says feisty UIP topper Stewart Till.

The dispute could idle on for years. The studios will make a formal appeal early next year, and the Audiencia’s decision could come a year later.

If the studios lose, they can always turn to Spain’s Supreme Court, whose rulings can take up to three years.

Hollywood does have a fighting chance. One of the suggestions made by Spain’s antitrust court — that the studios should release blockbusters over the same weekend to foster true competition — seems positively bizarre.

The Tribunal’s main case rests, however, on rentals charged by the studios for the 20 movies in Spain’s top 25 that they released in 2002.

“Although no legal limitation or rulings exist over a maximum percentage which can be charged, during 2002, all the accused companies charged 60% for the first week on their most commercial films,” the Tribune’s 24-page resolution asserts.

For Till, this is just a case of a settled market. “In all trading, such as DVD and CD stores, a similar sort of product tends to command a similar sort of price,” he says.

Spain’s time-honored flat-fee bookings contrast with other territories, such as the U.K., where distributors negotiate rentals with exhibitors on a cinema-by-cinema basis (although there’s a growing trend toward negotiating flat-rate fees).

As the suspension idles through legal hoops, the studios may start to edge rentals up or down, according to exhibitors’ strengths. If not, expect more trouble in Spain.

Spain’s exhib sector has seen rampant concentration. Three of the largest loops, two strengthened by mergers — Abaco-Cinebox and Cinesa, along with Yelmo Cineplex — boycotted “Scary Movie 4” in a show of strength this June. And even conservative orgs such as Spain’s antitrust Tribunal seem willing to lend Spain’s cinema circuits its ear. So it’s likely the battle will continue for some time to come.

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