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Communication Law Keyed to Benjamin, 2nd Ed.
United States v. Syufy Enterprises
Citation:
903 F.2d 659 (1990)Facts
In 1981, Raymond Syufy entered the Las Vegas movie theatre market by opening a six-screen multiplex. His entry precipitated intense competition among theatre operators, resulting in some of the highest license fees paid to movie distributors in the nation. Between 1982 and 1984, Syufy acquired the theatres of his three main competitors: Mann Theatres (operating three screens), Plitt Theatres (operating three screens), and Cragin Industries (operating the eleven-screen Redrock Theatre). After these acquisitions, Syufy temporarily controlled 100% of the first-run film market in Las Vegas. However, in the same month as Syufy’s final acquisition, Orion (a major film distributor) stopped doing business with Syufy due to a contract dispute and began licensing its films exclusively to Roberts Company, previously a second-run exhibitor. Roberts quickly expanded into the first-run market, opening three multiplexes within a 13-month period. By December 1986, Roberts operated 28 screens compared to Syufy’s 23. Roberts later sold its theatres to United Artists, the largest theatre chain in the country. By the first quarter of 1988, Syufy’s share of exclusive exhibition rights had fallen from 91% to 39%, and its share of box office receipts had decreased from 93% to 75%. Throughout this period, Syufy continued to pay license fees to distributors that were higher than the national average, and movie distributors testified that they were satisfied with the market conditions and had no complaints about Syufy’s practices.
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