Cineworld Purchase of Picturehouse Faces Probe

Posted on 7 May, 2013 by MOVEHUT

Cinema-lovers may be facing an increase in ticket prices and less choice after cinema chain Cineworld bought its art-house peer Picturehouse, the Office of Fair Trading has warned.

The OFT has asked the Competition Commission to investigate concerns that the deal, which was completed last December, could result in a “substantial lessening of competition” in five local areas, including Aberdeen, Bury St Edmunds, Brighton, Cambridge and Southampton.

Jackie Holland, senior director at the OFT said: “Our investigation found that, although Picturehouse cinemas show art-house and foreign-language films, a large proportion of Picturehouse’s revenue comes from more mainstream films, in direct competition to Cineworld.”

Cineworld, which operates about 80 multiscreen cinema sites across the UK, bought City Screen’s Picturehouse for £47.3m.

Picturehouse, which has 21 cinemas across the UK including Bath and York, aims to attract an older, more cultured audience, than mass-market multiplexes.

Cineworld said in a statement that it was not surprised by the OFT’s decision to scrutinise the deal as this is the first time a cinema complex acquisition of this sort has been made.

Cineworld has pin pointed the art-house cinema sector as an opportunity to grow and has said that it plans to open a further 10 Picturehouse cinemas in locations throughout the UK.

Cineworld said: “We believe the two businesses are fundamentally different. “We run the two brands separately and we are confident that we will be able to demonstrate that local competition will not be reduced.”

Over 95 per cent of respondents to a recent Picturehouse survey said they agreed with the statement that “a multiplex experience is different to an art-house cinema experience”.

In a recent statement, Picturehouse said that it did not agree with the OFT’s conclusions: “We believe that all of the Picturehouse cinemas are important to the communities they serve and that they will thrive under the Cineworld wing.”

The UK’s cinema sector has been merging for years. Three players – Vue, UCI and Odeon, and Cineworld now regulate 70 per cent of the market between them.

The Competition Commission is likely to report its findings by 14 October 2013.

Over the last three years, the OFT has looked at more than 250 mergers and merger tenders, of which around 10 per cent were referred to the Competition Commission.

The Cineworld deal is the third merger in the media sector that has attracted the attention of competition watchdogs this year.

In January, the OFT said that it was examining a tie-up between leading regional newspaper publishers Trinity Mirror, Yattendon Group and DMGT.

In February, the Competition Commission said that it might force Global Radio to sell some of the local radio stations that it obtained last year from Guardian Media Group for an estimated £70m.




Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.


Recent Posts

Interest Rates Impact on Commercial Property

Commercial Property Investment Outlook for 2023

The best places to stay on the Riviera

The latest property data has identified Newquay as the fastest property seller’s market in the UK

Investing in your garden can increase your property’s value

French Riviera temping high-end homebuyers

How can the ownership rights of my commercial property impact a business sale?

Should I incorporate virtual property viewings permanently?

Investment expected to increase across Asia-Pacific in 2021

UK property industry slows as the conclusion of tax break looms

BNP Paribas cautioned investors on Friday as debt-trading bonanza that increased its earnings this past year

Over 300,000 property purchases fell through in 2020 – we show the most frequent motives and the best way to get your house sale back on track

House Prices in the Capital Surpass £500,000

Optimism from the Bank of England’s chief economist

The most expensive commercial properties.

Businesses operating from shared premises will miss out on grants