Company officials disputed claims that Movie Gallery plans to offer adult entertainment throughout the Hollywood Video chain if a buyout bid for the currently porn-free chain goes through as expected.
"We will not be changing the family-oriented mix that has made Hollywood Video so successful," Thomas Johnson, senior vice president for Movie Gallery, told Salt Lake City’s Deseret Morning News. "Hollywood very clearly doesn't have it in their stores, we don't seek to change that formula."
Johnson confirmed that Movie Gallery, currently the third largest video-rental chain in the country, does carry adult videos – though he suggested that was largely the result of letting previous acquisitions continue to stock adult titles, rather than requiring acquisitions to stock adult videos.
Hollywood, currently the second largest video-rental chain, doesn’t stock adult videos. Neither does the largest video-rental chain, Blockbuster.
Earlier this week the American Family Association began circulating a charge that Movie Gallery Inc. had plans to expand adult movie sections in Hollywood Video.
Movie Gallery offered $850 for Hollywood Video on January 13. If the deal passes FTC anti-trust scrutiny, the resulting video-rental chain will be second only to Blockbuster in size.
When announcing terms of the deal, Movie Gallery stated that Hollywood Video outlets across the nation would operate independently as a division of Movie Gallery and continue to operate under the Hollywood Video name.
Blockbuster made a counter offer earlier this week, but their offer is hampered by the increased scrutiny that a deal of that scope would receive from regulatory authorities, giving Movie Gallery an advantage in their pursuit the Hollywood chain.
In an open letter written before Movie Gallery responded to the AFA accusation, Mark Wattles, who is the CEO of Hollywood Video, threatened to resign if Movie Gallery started putting adult entertainment in Hollywood outlets. "I'm not willing to work for a company that carries adult movies," Wattles, a Mormon, told the Deseret Morning News.
