Entertainment Industry

Category: exhibition

AMC Entertainment in talks to sell to China's Wanda Group

AMC IPO

AMC Entertainment, the United States' second-largest movie theater chain, is negotiating a deal to sell all or part of itself to Wanda Group, owner of China's largest theater company, two people familiar with the talks said.

The deal, if concluded, would make Wanda the first Chinese company to establish a major foothold in the North American theatrical business. AMC operates 5,048 screens in 347 theaters in the U.S. and Canada. It would also give AMC access to China's burgeoning market, which is in the midst of a multiplex building boom and was No. 2 at the international box office last year behind Japan, accounting for $2 billion in ticket sales, according to the Motion Picture Assn. of America.

The talks between AMC and Wanda have intensified in recent weeks in the wake of AMC's move to pull the plug on a planned stock offering to raise up to $450 million and use the proceeds to pay down debt, according to sources who asked not to be identified because the negotiations were confidential. Top shareholders in AMC include JPMorgan, Apollo Investment Fund and Bain Capital Investors.

AMC withdrew the offer because of concerns that market conditions weren't ripe for a stock offering, and possibly to position the company for a sale, people close to the transaction said.

A spokesman for AMC declined to comment, as did a representative for Wanda. News of the talks with Wanda was first reported by the New York Times.

Wanda Cinema Line Corp. Limited is the largest cinema chain in China. The parent company, Wanda Group, is a major player in real estate development including department stores and hotels.

The company has been in the news of late because its chairman, Wang Jianlin, is reportedly under investigation for ties to disgraced Chongqing party chief Bo Xilai. Bo was sacked, accused of corruption, and his wife charged with the murder of a British businessman. Wanda's headquarters are in the northeastern city of Dalian, where Bo was once a senior official.

AMC posted a loss of $82.7 million on revenue of $1.93 billion in the 39 weeks ended Dec. 29, 2011, compared to a profit of $36.88 million on revenue 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.

In May 2011, AMC closed a deal to acquire 92 theaters and 928 screens from Chicago-based Kerasotes Showplace Theatres, the nation's sixth-largest movie chain.

China has been heavily expanding its own entertainment industry, both to boost the country's global influence or "soft power" and to feed the demands of a surging middle class. Several Hollywood studios have been maneuvering to take advantage of the opportunity to grow business in China.

Burbank-based Walt Disney Co. recently said it would partner with the animation arm of China's Ministry of Culture and China's largest Internet company to help develop China's animation industry. Glendale-based DreamWorks Animation has announced a joint venture with Shanghai Media Group, China's second-largest media company, to build a family entertainment company to produce animated and live action movies and TV shows for the Chinese market. That deal was unveiled in February when Chinese Vice President Xi Jinping visited Los Angeles.

China is also rapidly expanding its theater industry. Although no major U.S. theater chain has expanded into China, Beverly Hills-based Real Inc. also has partnered with Beijing SAGA Luxury Cinema Management Co. to equip the Chinese theater chain with 3-D technology. Imax Corp., the Canadian big-screen theater company, also formed a joint venture with Wanda  to open 75 theaters by 2014.

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-- Richard Verrier and David Pierson

Photo: An AMC theater in Burbank. Credit: Ringo H.W. Chiu / For The Times

AMC Entertainment shelves IPO plan

AMC IPO

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.

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-- 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.  

 

 

CinemaCon panel lights up texting debate

Alamo DrafthouseIt was the closest thing yet to a skirmish at CinemaCon.

The venue: the Palace Ballroom at Caesar's Palace in Las Vegas.

The subject: whether to allow texting in movie theaters.

Regal Entertainment Chief Executive Amy Miles, one of several panelists debating the ways theaters can lure "today's savvy moviegoer," suggested that exhibitors consider allowing younger patrons to use their cellphones with certain types of movies such as "21 Jump Street." 

That triggered a furious response from Tim League, chief executive of Alamo Drafthouse, the maverick Austin, Texas-based chain that is known as much for serving food and drinks in its theaters as it is for strictly enforcing a ban on talking and using cellphones in its auditoriums.

"Over my dead body will I be introducing texting into movie theaters.... That's a scourge of the industry,'' League said. "It's our job to understand that this is a sacred place."

Jeff Blake, vice chairman of Sony Pictures Entertainment, came to Miles' defense. "You don't mind giving them a beer for Christ's sake,'' he said.

Whether texting is allowed in theaters, mobile devices already are rapidly changing the exhibition industry, as the Los Angeles Times recently reported. There are dozens of phone apps that help consumers get to the movie theater, share their movie plans with friends and family on Facebook and receive special offers on concessions.

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Photo: Tim League, Alamo Drafthouse founder and chief executive, outside of an Alamo Drafthouse in Austin, Texas. Credit: Annie Ray

MPAA's Dodd urges industry to reach out to 'connected consumers'

Dodd

LAS VEGAS -- Motion Picture Assn. of America of Chief Executive Chris Dodd touted a strong rebound at the box office this year but said the industry needs to find new ways to stay relevant to younger, "connected consumers."

"We need to make the case -- both to the new, younger, 'connected consumers,' and to others who wonder if the moviegoing experience remains something special, something to be savored and enjoyed, something so innovative and creative that it cannot be duplicated at home no matter how many boxes they have,'' Dodd said in a speech at the CinemaCon trade show here.

Dodd, the former senator from Connecticut, noted that worldwide box office revenues reached a record $32.6 billion last year and that domestic box office revenues are up 17% this year compared with the same period last year.

Still, Dodd noted that the industry faced long-term challenges, including boosting theatrical attendance in the U.S. and Canada, which fell 4% last year.

"One third of the public in the U.S. and Canada no longer goes to the movies," Dodd said. "We need to bring them back. I firmly believe that with our artistic and commercial vision and your stewardship of the great moviegoing tradition, we can do it."

Dodd also renewed his call for finding common ground with the technology industry to curb the theft of intellectual property. The MPAA backed tough laws, nicknamed SOPA and PIPA, to crack down on online piracy, but the bills were defeated by opposition from Google and other tech giants along with a strong public backlash.

"I want to dispense with the conventional wisdom that in order to protect our content we must be at war with the technology industry,'' Dodd said. "In fact, our two industries, content and technology, have far more in common than some have argued."

He added, "If protecting intellectual property results in an uninformed brawl between Hollywood and Silicon Valley, both sides will suffer -- but more importantly, so will millions of Americans who rely on these intellectual property industries for their jobs, and on the consumers whose lives have been enriched by their efforts. 

-- Richard Verrier

Photo: MPAA Chief Executive Chris Dodd. Credit: Chip Somodevilla / Getty Images

Cinedigm to acquire entertainment distributor New Video

Chris McGurkIn a bid to establish itself as full-service entertainment studio, Cinedigm Digital Cinema Corp. said it has agreed to acquire New Video Group, a New York-based distributor of independent films, TV shows and specialty entertainment.

Cinedigm, which supplies software to convert films into a digital cinema format and programs concerts and alternative content for movie theaters, said Thursday night that it had agreed to buy New Video for $14 million. The cash and stock transaction is expected to close Friday.

"Cinedigm is now a fully integrated distributor of independent films and specialty content,'' Cinedigm Chief Executive Chris McGurk said in a statement. "Over the past year, we have analyzed many companies in the digital distribution space for home and mobile entertainment and determined that New Video is the best partner for us."

Cinedigm is based in Morristown, N.J.

New Video was founded in 1991 to acquire and distribute alternative and independent movies. The company has acquired licenses for more than 4,000 films and 6,000 television episodes.

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Photo: Chris McGurk is CEO of Cinedigm Digital Cinema Corp. Credit: Jay L. Clendenin / Los Angeles Times

'Titanic' ticket sales in China set $7 million record for Imax

Kate Winslet in "Titanic"

Imax Corp., the big-screen theater company, this week sank its previous box office record in China with the 3-D release of "Titanic."

Since its release April 10, the 3-D version of director James Cameron's 1997 epic drama starring Kate Winslet and Leonardo DiCaprio has grossed an estimated $74 million in overall ticket sales in China -- breaking previous box office records in that country.

That was a windfall for the studio that released the film, 20th Century Fox, and also for Imax, which accounted for a record-breaking $7 million in opening week ticket sales from 64 of its theaters in China, the company said in a statement. (The re-release of "Titanic" has so far produced $210 million in ticket sales globally, with Imax theaters accounting for $15 million.) 

"As the record-breaking results demonstrate, Chinese moviegoers have a huge appetite for 'Titanic 3D,'  Jim Cameron's one-of-a-kind filmmaking, and are passionate about seeing it in the most immersive way,'' said Greg Foster, chairman and president of filmed entertainment for Imax.

The Canadian-based company, which has a large operation in Santa Monica, has been expanding its business in China. Last year, Imax formed a joint venture with China's largest cinema operator, Wanda Cinema Line Corp., to open 75 theaters in 25 locations by 2014.

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Photo: Kate Winslet in "Titanic." Credit: Paramount Pictures

International movie ticket sales reach new peak in 2011

Imax
Even as domestic ticket sales stalled last year, the international movie business climbed to new heights.  A newly released report from the Motion Picture Assn. of America states that global box office receipts for all films released around the world in 2011 reached $32.6 billion, up 3% over 2010 and 35% higher than five years ago.

The rise in global ticket sales reflects the rapid growth in overseas markets, particularly in China, where the box office grew by a whopping 35% to $2 billion in 2011 alone, according to the MPAA. China has been experiencing a multiplex building boom as Hollywood studios and production companies sign deals to expand their presence in the world's most populous country, which recently took steps to ease its annual quota on the number of foreign movies it allows into the country.

"These numbers underscore the impact of movies on the global economy and the vitality of the film-watching experience around the world,'' Chris Dodd, chairman and CEO of the MPAA, said in a statement. "The bottom line is clear: people in all countries still go to the movies and a trip to the local cinema remains one of the most affordable entertainment options for consumers."

Ticket sales in the U.S. and Canada dropped 4% to $10.2 billion, compared to 2010, partly reflecting a $400-million decline in revenue from 3-D ticket sales and a crop of under-performing movies in the first quarter of 2011.

The MPAA noted that domestic ticket sales were still up 6% over five years ago. But theater admissions -- or the number of tickets sold -- dropped 4% in 2011 from the previous year, to 1.28 billion.  And that's an 18% drop since 2002, when 1.57 billion tickets were sold, according to the report.

Domestic movie ticket sales continue to be fueled by repeated visits by frequent moviegoers -- those who go to the movies once a month or more. Frequent moviegoers represent only 10% of the population but purchased half of all tickets sold in 2011.

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Photo: Imax Corp. executives in Beijing announce a  deal with Wanda Cinemas to open at least 100 theaters in China. Credit: Stefen Chow/Bloomberg

 

Cinepolis Luxury Cinemas coming to Westlake Village

Cinepolis coming to westlake village


Cinepolis Luxury Cinemas, the Mexico City-based theater chain that expanded into Southern California last year, is opening its first Los Angeles theater in Westlake Village.

Cinepolis, the largest movie chain in Latin America and the fourth largest in the world, will bring its brand of luxury cinema to Westlake Village on July 20, marking its third theater in Southern California.

Cinepolis opened its first U.S. theater last summer in the the Del Mar Highlands Town Center in the San Diego area, expanded into La Costa in February, and will debut two additional locations this summer in Orange County's Laguna Niguel and Rancho Santa Margarita.

The upscale chain's theaters allow patrons to order gourmet food and drinks from plush leather recliners and include 21-and-over auditoriums where adult patrons can order alcohol.

Cinepolis is hoping to capitalize on the trend that has worked well for the circuit in other countries. The theater chain pioneered its luxury cinema concept in Mexico City in 1999 and has since expanded to about 150 screens across Latin America. Several other theater chains have been offering so-called premium food and beverage services in an effort attract new customers. Australian luxury theater operator Gold Class Cinemas brought its high-end brand to Pasadena more than two years ago.

The new eight-screen theater complex, currently operated by Mann Theatres, and will be similar to the one in Del Mar, which includes a hotel-like lounge area and lobby with couches and touch screen monitors showing movie trailers, a cafe serving coffee and desserts, and a full bar with specialty drinks.

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Photo: Before their movie starts, diners enjoy gourmet hot food and drinks in the lobby restaurant at Cinepolis Luxury Cinemas in the Del Mar Highlands shopping center in Del Mar, Calif. Credit: Don Bartletti / Los Angeles Times.

Veteran distribution exec Andrew Cripps joins Imax

Imax Corp., the big-screen theater company, has hired veteran international executive Andrew Cripps to be president of its Europe, Middle East and Africa operations.

Cripps, who is filling a new position in the fast-growing Canadian company, will be responsible for the expansion of the Imax theater network in those regions.

One of Hollywood's most respected foreign distribution and marketing executives, Cripps joins Imax from Paramount Pictures International in London, where he had been president since January 2007.  Previously, he was president and chief operating officer of United International Pictures , a joint venture distribution company founded by Paramount, Universal and MGM.Cripps

He joined UIP in 1986 as executive assistant to the general manager for Japan, and was later promoted to the roles of vice president of sales in Southeast Asia and senior vice president of international sales. Cripps spent 19 years in Japan and speaks fluent Japanese.

“Given Andrew’s leadership, vast industry experience and strong relationships with exhibitors and studios, we believe he is well-equipped to help us maximize the growth opportunities that exist in the underpenetrated markets of" Europe, the Middle East and Africa, Imax Chief Executive Richard Gelfond said in a statement. “Our goals for 2012 include igniting our expansion efforts in Latin America, India and Europe, and bringing someone of Andrew’s caliber on board further demonstrates our commitment to achieving these objectives."

Cripps, a native of Sri Lanka and a British citizen, said he was "delighted to join Imax, a company I know and respect and a name that is synonymous with quality entertainment. I hope to leverage my more than 20 years in Europe, as well as my relationships with exhibitors, to expand the Imax network and grow the brand.”

Imax, which has a large operation in Santa Monica, has 96 theaters in Europe, Middle East and Africa and plans to open 33 more throughout the region by 2014. Imax has nearly 600 theaters in 48 countries, including China, where it could benefit substantially from a new easing of restrictions of foreign films allowed into the country. The Chinese government recently agreed to allow an additional 14 "enhanced" movies into the country each year, primarily those that are available in 3-D or Imax formats.

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-- Richard Verrier

Photo: Andrew Cripps, veteran distribution executive, who was hired Wednesday by Imax Corp. Credit: Imax.

Average movie-ticket price edges up to a record $7.93 for 2011

Hugo Scorsese Movie Ticket Prices

The average movie-ticket price in the U.S. climbed to an annual record of $7.93 in 2011, up from $7.89 the year before, the National Assn. of Theatre Owners said Thursday.

Rising prices paid by moviegoers reflect an increase in premium-priced tickets for 3-D movies, IMAX screenings and other specialty formats, said Patrick Corcoran, spokesman for the theater association.

In the fourth quarter, however, the average ticket price dropped to $7.83, down from $8.01 in the  last three months of 2010, as theater owners offered more specials and discounted tickets on Tuesday nights.

Total box office revenue last year slumped 4% from the year before to an estimated $10.2 billion, while cinema attendance dropped 5%.

Some analysts blamed rising ticket prices for the decline in box office revenue last year, but theater owners have cited other factors, including the types of movies Hollywood released. Business has rallied so far this year, however, with box office revenue up about 11% and attendance up about 12% compared with the same time last year.

The trade association's ticket-price figures are based on data from across the country and include lower-priced matinee and children's tickets.

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Photo: Asa Butterfield plays Hugo Cabret in "Hugo" from Paramount Pictures. Credit: Jaap Buitendijk / Paramount Pictures

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