Cinemas worry Disney may leave ‘Fight Club’ and other Fox classics out of theaters

Derek Reis, general manager of the historic Little Theatre in Rochester, N.Y., was expecting a decent Monday night crowd for his cinema’s screening of David Fincher’s satire “Fight Club,” a movie produced by 20th Century Fox.

Days before the screening, Reis contacted a studio representative to confirm that the digital version of the movie was on its way. But the response he got surprised him: The studio would no longer license its old films for commercial theaters. The screening was canceled, with Reis hanging a sign in front of the theater, which opened in 1929, to notify patrons.

“We’re not Regal; we’re not AMC,” Reis said by phone early this week. “We’re just one theater out in Rochester trying to play ‘Fight Club.’ ”

What changed, however, was clear. Fox, and the movies in its storied library of motion pictures, is now part of Walt Disney Co., which has long placed tight restrictions on when and how cinemas can screen its older titles. Disney’s long-standing policy is to not allow first-run theaters or commercial discount cinemas to screen movies from its library, whether it’s an animated classic such as “Lady and the Tramp” or a more adult-oriented film such as “The Sixth Sense.”

That policy now will apply to Fox’s vast catalog, according to exhibition sources who were not authorized to comment. The exception, these people said, is “The Rocky Horror Picture Show,” a mainstay of midnight audience-participation screenings and Halloween parties. Repertory theaters — those that specialize in screenings of old titles — will still have normal access to Fox movies, sources said.

The policy shift for Fox films has caused confusion among some exhibitors. On Friday, a studio representative contacted the Little Theatre to apologize, saying there had been a misunderstanding about whether the cinema qualified as a commercial theater, Reis said. The Times inquired with the studio about the Disney policy on Thursday.

A spokesman for Disney declined to comment.

That Burbank-based Disney would tighten access to the Fox movies is not necessarily a surprise. The firm is famously protective of its intellectual property, which it leverages across multiple businesses including television and theme parks. Disney, for example, is known for releasing its classic animated titles such as “Beauty and the Beast” from the famed “Disney vault” for a limited time on home video.

There’s a clear business rationale for Disney to create scarcity. The company is counting on the combined library of Disney and Fox films to draw subscribers to its upcoming streaming service Disney+, which launches in November. The service, a major challenger to the leading streamer Netflix, will feature such classics as “Sleeping Beauty” and “Snow White and the Seven Dwarfs,” along with popular films and original content from Marvel, Pixar and Lucasfilm.

Disney also plans to put Fox titles including “The Sound of Music” and “The Princess Bride” on the new service. The company has plans to reimagine Fox properties such as “Home Alone,” “Cheaper by the Dozen” and “Diary of a Wimpy Kid” on Disney+.

Still, the extension of the company’s theatrical policy to Fox’s vault has given some theater owners pause.

Art houses, independent circuits and other commercial theaters have traditionally screened films such as “Die Hard” and “Home Alone” during the Christmas holidays. For some chains, including Alamo Drafthouse and Landmark Theatres, such screenings represent a significant business, helping to fill seats during the week and odd hours that normally don’t draw huge crowds with current blockbusters. Alamo and Landmark executives declined to comment for this story.

The new restrictions could create headaches for people such as Russ Collins, a cinema operator in Ann Arbor, Mich., who is the founding director of Art House Convergence, which works with more than 300 theaters across the country.

“We know some of our peers have been able to book repertory titles and some of our peers have not,” said Collins, who runs the four-screen State Theatre and the Michigan Theater movie palace. “Fox has a really tremendous library. If ourselves and our colleague theaters can’t access that in the long term, that will not be good for the culture in general.”

For theater owners, the limits on classic film access is just one small example of the impact Disney’s control of the Fox studio is expected to have. Disney in March completed its $71.3-billion acquisition of Rupert Murdoch’s 21st Century Fox, parent of the century-old studio.

Disney, analysts say, will wield significant clout as it controls an unprecedented share of box-office receipts. The company’s movies have accounted for 38% of domestic ticket sales so far this year, according to Box Office Mojo. Some theater operators privately fret that Disney will extract a higher percentage of ticket revenue.

To be sure, Fox was already somewhat more restrictive than other major studios when it came to licensing its classics, exhibitors said.

While some distributors allow theaters to simply pay a licensing fee in order to play a Blu-ray disc, Fox would only allow theatrical screenings using electronic file collections known as digital cinema packages, or DCP. Other major film companies, including Warner Bros. and Universal Pictures, are more liberal with their oldies, cinema owners said.

But the Disney policy is nonetheless expected to make things more difficult for independent theaters, and has already caused uncertainty among art houses. Some said that they haven’t been given clear guidance on the rules and are left to make requests on a case-by-case basis. Certain small theater owners, including the nonprofit Roxie Theater in San Francisco’s Mission District, said they’d recently been approved to show Fox titles.

Martin McCaffery, director of the Capri Theatre in Montgomery, Ala., hosts a classic film series that sometimes includes old Fox movies. A favorite tradition is to screen “The Princess Bride” around Valentine’s Day, but he has little interest in screening “Rocky Horror” for his customers. He said his theater was recently was approved to screen a Fox title but he still has concerns.

“I really hope they keep their catalog open,” said McCaffery. “The purpose of having movies is so that people can see them.”