(Reuters) - AMC Entertainment Holdings Inc (N:AMC), the world's largest movie theater operator, said on Tuesday it would no longer play Universal Studios films in any of its theaters globally, arguing that the studio is "breaking the business model".
The decision came in shortly after the Wall Street Journal quoted NBCUniversal Chief Executive Officer Jeff Shell (LON:RDSa) as saying https://on.wsj.com/35cWMQQ he expects to release movies simultaneously in theaters and direct-to-home formats.
Universal Studios is owned by NBCUniversal, a subsidiary of Comcast Corp (O:CMCSA). AMC has 1,000 theaters across the globe.
"AMC believes that with this proposed action to go to the home and theaters simultaneously, Universal is breaking the business model and dealings between our two companies," AMC Chief Executive Officer Adam Aron said in a letter addressed to Universal Studios Chairman Donna Langley.
With movie theaters worldwide shuttered since mid-March due to the coronavirus pandemic, AMC said the action was effective from Tuesday and would apply as and when its theaters reopen.
Universal said it was disappointed by the decision and labeled it as a "seemingly coordinated attempt" to "confuse our position and our actions."
"We absolutely believe in the theatrical experience and have made no statement to the contrary. As we stated earlier, going forward, we expect to release future films directly to theaters, as well as on premium video on demand (PVOD) when that distribution outlet makes sense," a Universal spokesman said.
Major film releases have been postponed as theaters across the United States have shut down as part of the preventive measures taken to curb the spread of the virus, prompting studios to release some movies directly online.
The three main movie theater chains - AMC, Regal and Cinemark - have said they do not expect to reopen until late June or July.
Some films, including Universal Pictures animated "Trolls World Tour," have been released directly to streaming platforms or video on demand. Universal will do the same with the upcoming Judd Apatow comedy "The King of Staten Island".