In-theater advertising network National CineMedia says in a lawsuit against Regal Cinemas that a move by the owner of Regal to abandon its exclusive deal with NCM could result in $1 billion in damages.
On Friday, that owner -- Cineworld -- moved for permission to void its agreement with National CineMedia, arguing that the rise of streaming video at-home services and COVID-19 has forced it to make the move, among other business savings.
In return, National CineMedia filed a lawsuit against Regal Cinema in breach of "long-standing exclusivity, non-competition, non-negotiation, and confidentiality rights.”
The move by Regal Cinemas comes as its parent company, Cineworld, has filed for bankruptcy protection -- which could allow Regal Cinema to abandon or change its deal with National CineMedia, leaving Regal open to making a deal with National CineMedia competitor, Screenvision.
Since it started its deal with Regal 15 years ago, National CineMedia has given payments to Regal of about $1.3 billion to be part of the NCM theater network.
In addition, an average annual payment of $58 million from 2015 to 2019 has been given to Regal as part of its joint venture agreement with NCM.
NCM started as a joint venture in 2007 with major U.S. theater chains: Regal Entertainment Group (owner of Regal Cinema), AMC Entertainment and Cinemark Holdings.
NCM has a network of over 21,100 screens in more than 1,700 theaters in 190 markets.
In 2019, NCM annual revenue was $445 million.