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B. Technicolor’s Customer Relationships
In 1986, Paramount Pictures Corp. (Paramount), a
noncontractual customer of Technicolor since 1923, entered into
its first contract with Technicolor. Under this contract,
Technicolor received one-half of Paramount’s film processing
business. In 1987, Technicolor became Paramount’s exclusive film
processor. In 1992, after the expiration of its contract with
Technicolor, Paramount entered into a contract with Deluxe.
After Paramount signed with Deluxe, it continued to do business
with Technicolor under an exception to an exclusivity provision
(i.e., a contractual provision in which a customer agrees to
purchase a particular product or service from only one company)
in Paramount’s contract with Deluxe.
Metro-Goldwyn-Mayer/United Artists (MGM/UA) became a
Technicolor customer in 1924. In 1987, MGM/UA split its film
processing work between Technicolor and Deluxe and became a
significant noncontractual customer of Technicolor. At the time
of the acquisition, Technicolor did not have a film processing
contract with MGM/UA. In addition, the preacquisition review did
not project 1989 revenues relating to MGM/UA. In 1991, MGM/UA
entered into a contract with Deluxe, but continued to do business
with Technicolor.
On October 21, 1988, Management Co. Entertainment Group,
Inc. (MCEG), a newly formed independent film production company,
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Last modified: May 25, 2011