The prospective new owners of Hollywood Video, which has 42 stores in Utah, say they would not offer adult videos at the Hollywood locations, despite claims to the contrary by a national advocacy group.
"We will not be changing the family-oriented mix that has made Hollywood Video so successful," Thomas Johnson, senior vice president for Movie Gallery, said. "Hollywood very clearly doesn't have it in their stores, we don't seek to change that formula."
Alabama-based Movie Gallery Inc. has announced it intends to buy Hollywood Entertainment Corp., which operates the Hollywood Video rental chain. Johnson did confirm that the company does carry adult-oriented videos in a small percentage of their locations.
That has the American Family Association expressing concern the Movie Gallery's policy of having a "mature gallery" will result in the spread of adult sections elsewhere.
The association says it was told by a corporate official from Movie Gallery Inc. that the company had plans to expand adult movie sections in Hollywood Video locations, if the buyout goes through.
"American families will not allow this kind of toxic perversion and its resulting atrocities to invade their small towns," said AFA special projects director Randy Sharp from the group's headquarters in Mississippi.
Even the CEO of Hollywood, Mark Wattles, is disappointed the company he founded as a pornography-free business may be soon associated with it.
In response to about 1,000 e-mails he received from concerned consumers, Wattles issued an open letter saying he has no desire to continue with Movie Gallery, should be merger go through.
"I'm not willing to work for a company that carries adult movies," Wattles told the Deseret Morning News, who added he is a member of The Church of Jesus Christ of Latter-day Saints.
Wattles, who owns a 10 percent share in the Oregon-based company, said he put Hollywood Video on the market with the intent to buy it back from shareholders. However, Movie Gallery offered the board more for the company.
"The deal is moving forward," Bob Marese, adviser for Hollywood Entertainment, said Wednesday. Hollywood Entertainment filed a buyout notification with the Federal Trade Commission on Jan. 13. Marese said Movie Gallery filed its preliminary proxy statement to the FTC for the purchase Wednesday. The merger is subject to antitrust review by the Federal Trade Commission and the U.S. Department of Justice.
Movie Gallery is a publicly traded company that has focused mainly on rural markets, with 2,200 stores in North America and expansion into Canada. The purchase of Hollywood Video would make Movie Gallery the nation's second largest video rental chain.
But Movie Gallery officials say the company has no plans to expand adult movie sections into Hollywood Video locations, which would keep the Hollywood name.
Johnson said that his company has progressed through acquisition and some stores it acquired had adult sections. Although Movie Gallery will continue to offer adult movies where they have been offered in the past, there is no plan to expand.
"We have never violated any laws of any jurisdiction and Movie Gallery is about family entertainment," he added.
An attorney with the Utah Attorney General's office said Hollywood Video patrons in Utah may simply have to trust the new owners will keep their word.
Under the legal concept of prior restraint, citizens will have to complain about movies in order for law enforcement to do anything about it. "Until they start carrying particular videos and someone views them and registers a complaint, it is really impossible to say what impact there might be," Assistant Attorney General Craig Barlow said.
Barlow said steps taken by some businesses to shield children and others from adult-oriented material are usually done as a business decision and not required by state law.
Any specific requirements may come through city or county ordinance. "That's city and county business, not state business," Barlow said.
Unfortunately, according to Barlow, if Movie Gallery decides to introduce adult sections to Utah locations, customers may have to go through the initial shock of seeing it. One solution, Barlow said, is to simply rent somewhere else. "Market forces may be the most compelling leverage on this kind of thing," he said.
However, the deal between the two companies has not been fully sealed. According to Movie Gallery, Hollywood Entertainment has also received a second offer by video rental giant Blockbuster Inc., which has operated stores in Utah for years without an adults-only section.
E-mail: gfattah@desnews.com