The Justice Department is suing to block the $375 million merger of National CineMedia and Screenvision, saying it would combine the only two "significant" cinema ad networks in the U.S., reducing competition and likely raising prices.
The suit was filed in U.S. District Court for the Southern District of New York.
The companies, which are owned by the three largest movie chains, Regal, AMC and Cinemark produce the pre-show programs that promote new TV shows, movies and other fare. The ad networks and the theaters share the revenues.
The companies signaled they still hoped the deal could be done, and that they could make the case for it.