Falls Out With Paramount Pictures Over Jeep Tie-In

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LOS ANGELES ( -- Regal Entertainment Group, the nation's largest theater owner, is refusing to run Paramount Pictures' summer release Lara Croft Tomb Raider:
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Cradle of Life
in some of its theaters because of a dispute concerning a DaimlerChrysler Jeep promotion.

Lobby sign
At issue is an in-lobby "standee," a promotional sign for the movie, which promotes a contest for the chance win a Jeep Wrangler Rubicon, DaimlerChrysler's new sport utility vehicle. It shows actress Angelina Jolie in character as Lara Croft, seated in the Rubicon.

Regal wants remuneration for displaying the signs, but Paramount won't pay. Now 47 of Regal's theaters won't run the movie, which opens nationwide July 25.

Wants 'into the deal'
"We have been very upfront about telling studios that we desire to work together in third-party placement," said Cliff Marks, president of marketing for Regal CineMedia. "If a studio has a third party, we need to be brought into the deal. We want to work in unison with our studios partners." Neither Paramount nor Chrysler executives would comment.

Since early this year Regal has told studios it wants to get paid for any third-party promotions studios contract for when using Regal's in-lobby advertising space or other assets. Historically, theater chains don't get advertising payments for third-party promotions in connection with film-distribution deals.

Regal advertising
But Regal has made a major push in the area of in-theater advertising and marketing, especially under its new division, Regal CineMedia. Earlier this year, it launched a 20-minute digital pre-show program, the Digital Content Network, which sells in-cinema advertising to major advertisers such as Chrysler. DCN will be activated in 80% of Regal's 530 theaters by the end of the year.

Regal has a "pretty significant financial model based on advertising," said one veteran film-marketing executive. "If they felt it was truly a Jeep promotion with the movie being secondary, then they have a valid point."

Marketing executives said Regal is already working with other studios, including a deal with Vivendi Universal's Universal Studios and MasterCard International. Earlier this year Universal and MasterCard struck a $150 million multiyear marketing deal. Mr. Marks would not comment beyond saying that Regal has been "approached by several studios to work together on some project ideas."

$10 million Jeep promotion
Marketing executives close to the companies say Paramount doesn't get paid by Chrysler to put the standees in theater lobbies. But Chrysler is indeed spending some $10 million in paid media to promote the movie, according to executives, mostly through TV commercials featuring the Rubicon and Tomb Raider film footage. Jeep's commercial broke June 9, and a print ad broke in the July issue of Dennis Publishing's Maxim. Fallout from the marketing misunderstanding included Chrysler canceling a major media buy on Regal's DCN in-cinema network.

"This is more than just a product placement," Jeff Bell, vice president of Chrysler Group's Jeep, said in early June. "We have created a 360-degree integrated marketing campaign around the movie." Chrysler's campaign includes a video game, print and in-movie product placement.

Regal didn't want the promotion in any of its theaters, but Paramount needed the distribution for the film. So the movie will be still be seen in "hundreds of Regal theaters," said an executive close to the companies, but without the standee/car promotion.

Competing chains
But in 47 of Regal's theaters, the movie won't run at all. Paramount had to pull the movie in those theaters and run it in competing theater chains because the studio's agreement with Jeep required a minimum number of theaters for the in-theater promotion.

Overall, as a major wide-release summer movie, Cradle of Life will be seen on more than 3,000 U.S. screens, according to executives close to the film. In addition to standees, many non-Regal theaters will also have an actual Jeep Rubicon in theater lobbies.

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Jean Halliday contributed to this report.

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