Producers, multiplexes script end to dispute

Millions of Bollywood fans will be able to see the latest films again, after a lobby representing producers and distributors and the association of national multiplex chains ended a 63-day dispute by agreeing on a revenue-sharing formula for all forthcoming films.

The agreement, reached in the early hours of Friday, is expected to be signed in two days and an official statement will be issued on June 8. The agreement will be binding on both parties for at least two years, said industry sources.

The agreement involves a two-tier formula on revenue sharing — the heart of the dispute — which offers producers and distributors a higher share of initial revenues than before and the right to choose and release films according to their business plans, instead of allowing multiplexes to dictate these terms.

Reacting to the news, the stock prices of listed multiplex companies — PVR and Inox Leisure — rose around 5 per cent.

Multiplexes account for 60 to 65 per cent of the annual Rs 3,500 crore box office earnings from Bollywood (the 8,500 single-screen theatres account for the rest).

No new Hindi film has been released in multiplexes since April 4, causing film exhibitors and distributors a loss of Rs 350 crore. As a result, almost half the 900 multiplex screens were closed.

Bollywood producers also incurred losses running into hundred of crores.

Asked about the agreement, top executives of all leading multiplex chains like PVR Cinemas, Big Cinemas, Inox Leisure and Cinemax among others expressed satisfaction but declined to comment on specific aspects of the deal.

Big Cinemas, the film exhibition arm of the Anil Ambani-controlled Reliance ADA group, was the first to reach an agreement with the United Producers and Distributors forum, the lobby of Bollywood producers. "Once Big Cinemas agreed, other multiplex chains also discussed and debated and decided to go with Big Cinemas. This ended the two-month old tussle," a top Bollywood producer said.

After the agreement, the first film to be released now would be Vashu Bhagnani’s Kal Kisne Dekha, produced by Big Cinemas, which is slated to hit theatres on June 12 (next Friday).

FORMULA IN FOcuS (Multiplex-Bollywood producers’ new agreement)
Revenue share formula	Multiplex share In % (Old formula)	Bollywood producers’ share In % (Old formula)
For week 1	50(52-55)	50(48-45)
For week 2	57.5 (55-58)	42.5 (45-42)
For week 3	62.5 (60-65)	37.5 (40-35)
For week 4 onwards	70(65-70)	30(35-30)
If films gross more than Rs 17.5 crore across top 6 multiplexes of any multiplex exhibitor
Revenue share formula	Multiplex share In %	Bollywood producers’ share In %
For week 1	47.5	52.5
For week 2	55.5	44.5
For week 3	62.0	38.0
For week 4 onwards	70.0	30.0

Overall, as many as 35 new Hindi films entailing investments of over Rs 200 crore will now queue up for release. These include Yashraj Film’s New York starring Katrina Kaif and John Abraham, Kaminay (Shahid Kapoor, Priyanka Chopra), Kambakht Ishq, Life Partner and Sikander, among others.

Also read:
June 1: Bollywood-multiplex stand-off may end before June 12