Star Wars: The Last Jedi is poised to be a box office juggernaut and will almost certainly be one of the biggest movies of 2017 by the time the year ends. So why are some movie theaters refusing to screen the film for audiences?



A new report from The Wall Street Journal explains that the Walt Disney Company, buoyed by the purchases of Marvel and Lucasfilm, has become the most successful movie studio today and therefore wields tremendous power over exhibitors who wish to screen their films. For Rian Johnson‘s The Last Jedi, Disney is forcing theaters to agree to secret terms which many theater owners are calling “the most onerous they’ve ever seen.”

Those terms include the fact that Disney will receive 65% of revenue from ticket sales, the highest percentage a Hollywood studio has ever demanded. They’re also forcing theaters to screen the film in their largest auditorium for at least four weeks. For previous Star Wars movies, the studio has required 64% of the revenue from ticket sales and four week commitments, but typical Disney movies only require a two week commitment.

If any Last Jedi movie theaters break any condition of the agreement – pulling just one screening from the schedule, for example, or even advertising the movie before Disney gives their approval – the studio will charge a 5% penalty fee, raising their take to a staggering 70% of ticket sale revenue. Generally speaking, studios get between 55-60% of that revenue from domestic releases; international deals vary, but the average hovers around 40% for movies that play overseas.

But The Last Jedi is the closest Hollywood gets to a guaranteed hit, right? So even with these terms, why would a theater want to miss out on that sweet, sweet Star Wars cash? Well, we all know the holiday season is prime moviegoing time, and tiny one or two-screen theaters in small towns – like Lee Akin’s one-screen independent theater in Elkader, Iowa – would actually be hurt by keeping The Last Jedi in theaters for four weeks and not being able to screen other releases on those screens instead.

Most theaters will be screening the new Star Wars film (likely to packed crowds), so Disney’s onerous terms won’t end up affecting the majority of people reading this. But it’s still interesting to think about the relationships smaller theaters have with would-be blockbusters. We often get swept up in stories about movies breaking nationwide box office records, but we don’t regularly consider the economic realities of small theaters servicing smaller communities.

Star Wars: The Last Jedi will play in some (most) theaters on December 15, 2017.