Entertainment Industry

Category: amc

AMC Entertainment shelves IPO plan


AMC Entertainment, the nation's second-largest exhibitor, has once again scrapped plans for a stock offering, two people familiar with the matter said.

The Kansas City, Mo.-based theater chain had said in a regulatory filing last spring that it planned to raise up to $450 million in an initial public offering of stock, using the proceeds to pay down debt. Top shareholders in AMC include JPMorgan, Apollo Investment Fund and Bain Capital Investors.

But at the prompting of AMC's owners, the circuit has opted to shelve the IPO, out of concern that market conditions aren't ripe for a stock offering, said two sources familiar with the plans who asked not to be identified because they were not authorized to discuss the matter.

"It's a tough business,'' said one of the sources, citing the long-term challenges faced by the exhibition industry, especially from the threat posed by shrinking theatrical windows -- the period between when a movie is released in theaters and when it can be viewed in the home. "The biggest issue they are facing is how to navigate the collapsing of theatrical windows."

Industry-wide, the number of tickets sold in the U.S. and Canada fell 4% last year to 1.28 billion, the lowest level since the mid-1990s. But revenue has rebounded this year, jumping 23% in the first quarter.

This marks the third time in five years that AMC has pulled back from going public. The company originally filed for a $750-million IPO in December 2006 as private equity firms looked to recoup some of their heavy investments in the theater operator. But AMC withdrew that offering in May 2007 after investors balked at the $17-a-share asking price.  AMC then unveiled plans for a scaled-back stock offering in September 2007 but withdrew that plan a year later amid market volatility.

Along with rival Regal Entertainment, AMC last year launched a joint venture called Open Road Films that will acquire and release independent movies.

AMC has been bulking up on the number of cinemas it controls. In May 2011, AMC acquired 92 theaters and 928 screens from Chicago-based Kerasotes Showplace Theatres, the nation's sixth-largest movie chain. AMC operates 347 theaters and 5,048 screens in the U.S. and Canada.

Ryan Noonan, a spokesman for AMC, declined to confirm or deny whether the circuit had officially abandoned its IPO plans but said: "The IPO process is ongoing and I do not have a time line to share."

AMC posted a loss of $82.7 million on revenue of $1.93 billion in the 39 weeks ended Dec. 29, 2011, compared to profit of $36.88 million on revenues of $1.9 billion during the same period in 2010, according a filing with the Securities and Exchange Commission. The company cited higher interest expenses, investment losses in Beverly Hills-based 3-D technology company RealD and costs related to its acquisition of Kerasotes.


AMC unveils IPO plans

Regal and AMC unveil new distribution firm

AMC buys Kerasotes Showplace Theatres

-- Richard Verrier

Photo: Moviegoers gather at an AMC theater in Burbank on a Friday night. Photo credit: Ringo H.W. Chiu / For the Los Angeles Times.  



Cablevision moves forward with spinoff of AMC Networks

Cablevision Systems Corp., the Long Island, N.Y.-based media company that owns cable TV systems and a raft of cable networks, said Thursday that it was on track to spin off its Rainbow Networks unit in mid-2011 and the soon-to-be created company will be named AMC Networks Inc. Josh Sapan

Josh Sapan, the current head of Rainbow Media, will be president and chief executive of the publicly traded company.

In ditching its longtime Rainbow Media moniker, Cablevision is betting that the recent success of its marquee AMC channel, which boasts such prestigious dramas as the Emmy-winning "Mad Men," "Breaking Bad" and the zombie thriller "The Walking Dead," will have more cache on Wall Street.

The new AMC Networks entity will include the channels AMC, WE tv, IFC, Sundance Channel and AMC/Sundance Global, plus IFC Entertainment, an independent film business. 

"AMC has become one of the most established of those brands, recognized by consumers, advertisers and investors alike," Sapan said in a statement. "We want to capitalize on that strong brand awareness for what will be our new public company."

Sapan joined Rainbow in 1987 as president of Bravo (later acquired by NBC) and AMC. In the 1990s he helped launch IFC and WE tv. He became Rainbow's CEO in 1995. In 2008, the company acquired the Sundance Channel.

Cablevision said its spinoff of Rainbow would be a leveraged transaction and structured as a tax-free pro rata spinoff to Cablevision stockholders. Cablevision last year spun off its Madison Square Garden arena business.

-- Meg James

[For the record: An earlier version of this post incorrectly stated that Cablevision owns the sports teams New York Knicks and New York Rangers. In fact, Madison Square Garden owns the teams. Both Cablevision and MSG are controlled by the Dolan family].

Photo: Josh Sapan. Credit: Cablevision Systems Corp.

Disney makes peace with another exhibitor in flap over 'Alice' [updated]

The rebellion among theater owners over Walt Disney Co.'s plans to accelerate the DVD release of "Alice in Wonderland" appears to be over.

Odeon & UCI Cinema Group, one of the largest theater circuits in the United Kingdom, became the latest exhibitor to make peace with Disney.

The company said today that it will now be showing "Alice" in its cinemas in the U.K., Ireland, Italy, Germany, Portugal and Austria when the 3-D film starring Johnny Depp debuts March 5.

Odeon and Vue Entertainment, another major circuit in the U.K., had threatened to boycott the film in protest over Disney's decision to release it on DVD about three months after its premiere in theaters, a month earlier than usual. They and other exhibitors feared that such a move would discourage people from watching the film in theaters, thereby cutting into their box-office revenue. Like other studios, Disney wants the flexibility to experiment with early release windows to offset declining DVD sales.

But after assurances from Disney executives that its decision on "Alice" would be the occasional exception, not the rule, the exhibitors backed down, as expected. "Alice" features a heavily British cast, and refusing to screen the film in the U.K. would have been a costly blow to the theater chains, and for Disney, which is counting on "Alice" to be one of the biggest films this year.

AMC Entertainment, the second-largest theater circuit in the U.S., which also had balked at Disney's plans for "Alice," is now expected to screen the film as well, people familiar with the matter said. Representatives of the chain declined to comment.

UPDATE: 2:30 p.m. AMC Entertainment of Kansas City, MO confirmed that it would be screening "Alice" in all of its theaters. The theater circuit said it had begun selling advanced tickets for the film, which debuts March 5. Sounding a conciliatory tone, AMC Chief Executive Gerry Lopez predicted "Alice" would be the next 3D blockbuster. "It is sure to please our guests --many of whom have called and emailed -- and help us maintain box office momentum in 2010," Lopez said in a statement. "As business models evolve for exhibitors as well as distributors such as a Disney, it makes sense to focus on the many opportunities we have to improve our economics so we can continue to invest in technology our guests want."

-- Richard Verrier

AMC buys Kerasotes Showplace Theatres

In a sign of further consolidation in the exhibition business, AMC Entertainment, the nation's No. 2 theater circuit, said today it had reached an agreement to acquire "substantially all" of the assets of Chicago-based Kerasotes Showplace Theatres.

Privately held Kerasotes, the nation's sixth-largest circuit, owns 96 theaters and 973 screens in mid-sized suburban and metropolitan markets, mostly in the Midwest. Financial terms were not disclosed.

Based in Kansas City, Mo., AMC has interests in 304 theaters with 4,574 screens in five countries.

"Combining Kerasotes' highly regarded assets and operations with our own is a natural way for us to continue redefining the future of our industry,'' said AMC Chief Executive Gerry Lopez in a statement. "With almost 200 years in the exhibition business between us, our collective experiences and our complementary geographic footprints will allow us to maintain the reputation for excellence and leadership that is part of each company's culture."

The acquisition follows another major deal in the theater business, coming on the heels of Rave Cinemas' announcement that it is acquiring up to 35 theaters owned by Sumner Redstone's family-owned circuit, National Amusements.

-- Richard Verrier

AMC moves back to Hollywood

Start popping the popcorn: AMC Entertainment, the nation's second-largest theater operator, is moving back to Hollywood.

The Kansas City, Mo., chain, which operates 307 theaters, said Thursday it will open a new film office in Century City to strengthen its ties to the studios and develop alternative entertainment, such as live broadcasts of sporting events. The company had closed its film office in 2005 in a company-wide consolidation.

"We are pleased to reestablish a physical presence for AMC's film team in L.A.," said AMC Chief Executive Gerry Lopez. "The addition of new talent and the relocation of key AMC film associates will re-energize our strong industry relationships, which are integral to our programming expansion strategy."

Robert J. Lenihan, president of programming, will oversee the new office with a staff of five in Los Angeles. The new office will be close to one of its flagship theaters, AMC Century City 15.

In February, AMC tapped Lopez, a former Starbucks Corp. executive, to become chief executive. He replaced Peter Brown, who retired after the privately held company sustained heavy losses  and dropped plans for an initial public stock offering. AMC and other theater chains have been enjoying a strong year at the box office but face long-term challenges to boost attendance and draw younger audiences.

-Richard Verrier

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