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Bryan Cranston's Palme d'Or theater closes amid battle with national chain

Bryan Cranston's Palme d'Or theater closes amid battle with national chain
The Palme d'Or theater in Palm Desert had high-minded ambitions but now it says it's closing its doors. (Andreas Mauritzson / Flagship Theatres)

Cinemas Palme d'Or, the specialty movie theater part-owned by "Breaking Bad" star Bryan Cranston, is closing its doors in Palm Desert amid a protracted battle with one of the nation's largest multiplex chains.

The theater said Tuesday it is shutting down after 13 years in business, saying it was squeezed out by what it considers to be anti-competitive practices by Plano, Texas-based exhibitor Cinemark, the third largest movie theater company.

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In a statement, Palme d'Or's owners said Cinemark pressured movie studios to keep the indie theater from getting big film titles.

The claim echoes a 2006 lawsuit in which Palme d'Or accused Cinemark of "circuit dealing," an industry practice in which theater chains leverage their size and buying power to prevent distributors from booking movies at theaters owned by their rivals.

Initially dismissed in Los Angeles County Superior Court, the suit later was revived by an appellate court. The case was dismissed again in 2014 in a decision that Palme d'Or has appealed. The company said it plans to continue its litigation, despite the theater's closure, which is set to take effect June 30.

"We have fought hard, but circuit-dealing has made it impossible to stay in business," the owners said. "We have lost millions of dollars because of circuit dealing over the last 13 years, and we intend to win this lawsuit."

In court filings, Cinemark has argued that its business practices are lawful and that the company did not have sufficient strength in the Coachella Valley market to stifle competition.

Cinemark fired back at Palme d'Or in a statement Tuesday that the company does not engage in "circuit dealing" and that the case is "entirely without merit."

Flagship Theatres bought the Palme in 2003 with ambitions to create a destination for cinephiles to see the kinds of arthouse, specialty and foreign films often restricted to the Los Angeles city limits.

Besides the Emmy-winning Cranston, its owners include movie producer Alise Benjamin and radio personality Steve Mason.

But the 10-screen cinema's aims to create a cultural oasis in the desert were overshadowed by its clash with Cinemark, which operated 513 theaters in the U.S. and Latin America as of the end of last year.

The ongoing dispute reflects long-boiling tensions between independent theater owners and big chains.

Smaller chains and mom-and-pop operators have for years complained that their bigger rivals have abused the tradition of so-called clearances, in which chains ask studios for exclusive rights to show a movie within a certain geographic area.

The practice of clearances, which is less expansive than circuit-dealing, has generated controversy as well. The Department of Justice has been investigating the issue to see whether the largest chains have violated federal anti-trust laws.

Cracks in the traditional way of doing business are beginning to surface. Film studio 20th Century Fox said in March that it no longer would honor exhibitors' requests for clearance.

Follow Ryan Faughnder on Twitter for more entertainment business coverage: @rfaughnder

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