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This topic comprises 2 pages: 1 2
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Topic: Mark Cuban buys interest in Carmike
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Scott Norwood
Film God
Posts: 8146
From: Boston, MA. USA (1774.21 miles northeast of Dallas)
Registered: Jun 99
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posted 12-30-2008 10:19 PM
From the Associated Press via Business Week:
quote:
Mark Cuban, the billionaire owner of the Dallas Mavericks basketball team and co-owner of the Landmark Theaters cinema chain, has acquired a 9.4 percent stake in Carmike Cinemas Inc., according to a regulatory filing on Monday.
In the Securities and Exchange Commission filing, Cuban reported buying 1.2 million Carmike shares on the open market for roughly $2.8 million of his own funds. According to the filing, Cuban has been acquiring the shares through his personal investment account since mid-October.
Cuban, who has been controversial within the National Basketball Association -- racking up more than $1 million in fines for his behavior on the court -- has recently become the target of civil lawsuit alleging insider trading.
In November, federal regulators accused Cuban of using confidential information to bail out of an investment in search-engine company Mamma.com Inc. in 2004, avoiding about $750,000 in losses. Cuban has denied any wrongdoing.
Cuban is not facing jail time, but could be forced to pay a penalty of close to $3 million if he is found guilty.
According to the SEC's case, Cuban told his broker to sell his Mamma.com shares after the company's then-chief executive confidentially told him of a stock offering that would dilute the value of stock held by current investors.
Cuban owned a 6.3 percent stake in Mamma.com at that time and was the largest-known shareholder in the search-engine company. The Montreal-based company changed its name to Copernic Inc. in 2007 although the Web site remains known as Mamma.com.
In Monday's SEC filing, Cuban said he acquired his stake in Columbus, Ga.-based Carmike for investment purposes. He reserved his right to discuss the company's performance and strategic direction with Carmike's stockholders, officers or directors.
Cuban co-owns movie theater chain Landmark Theatres with Todd Wagner, who was his co-founder of the pioneering online audio streamer Audionet. The service, later named Broadcast.com, was sold by Cuban and Wagner to Yahoo! in 1999.
The Wagner/Cuban Cos. also include distribution company Magnolia Pictures, production company 2929 Productions, and high definition cable networks HDNet and HDNet Movies.
Carmike shares rose 29 cents to close at $2.32 Monday, after trading as low as $1.68 earlier in the session. The stock has traded between $1.37 and $11.37 during the past 52 weeks.
Does anyone know the real story here?
Personally, I wish that he'd put some money into Landmark before buying another chain....
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Bobby Henderson
"Ask me about Trajan."
Posts: 10973
From: Lawton, OK, USA
Registered: Apr 2001
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posted 12-30-2008 11:11 PM
I saw the news about this yesterday morning on CNBC. Cuban bought a significant stake in Carmike, but not nearly enough to control the company. I'm wondering if it is enough to get him a seat on the board of directors.
I'm not sure just what to think about the stock purchase in terms of strategy. Cuban wouldn't merely be buying into the company because he thought the stock would be a good performer in the near or long term. There has to be another angle.
One angle could be a Carmike buyout or mere affiliation with Landmark Theatres. Most of the screens in Carmike's circuit are in small cities and towns. Landmark isn't a big chain, but has locations in some major cities.
The more obvious angle is a content distribution deal. Carmike still has, by far, the most digital cinema equipped movie theater screens out of any theater chain. We know how much Cuban likes digital cinema. Cuban also likes the idea of alternative means of distributing movies -like the pretty weird day and date strategy of putting movies on DVD, cable TV and movie theaters at the same time. If I can watch a movie like Splinter for next to nothing on HD Net Movies why would I pay a bunch of money to see it in the theater?
At any rate, it's difficult for independent movie productions to get on lots of movie theater screens. Carmike has a lot of screens that may be available to show 2929 Productions content. OTOH, it costs a lot to market movies too -especially to reach customers in smaller cities and towns like Carmike serves. Independent movies often do not do well at all in towns like Lawton, OK. Perhaps if enough people had HD Net and HD Net Movies and saw enough commercials for an upcoming flick they might go see it at the local Carmike. But that's only if the Carmike location is their only choice to see it. If small town viewers can stay planted on their butts in their living room and watch the same movie day and date on HD Net Movies they're just going to stay home.
Like I said, I'm not sure what to think about the strategy.
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Bobby Henderson
"Ask me about Trajan."
Posts: 10973
From: Lawton, OK, USA
Registered: Apr 2001
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posted 01-01-2009 01:57 AM
Unfortunately, all it will take to blow the stupid cable companies out of the water on that one is informing viewers on what they can do for receiving HDTV over the air. You do NOT need cable or satellite in order to receive great quality HD.
I have an old-assed half-broken from severe storms outside antenna that still receives all the channels in my TV viewing market. And I get the ABC affiliate OTA in HD with no problem. And it looks better in quality than anything I see via satellite.
The ABC affiliate is here in Lawton. But I still get the analog signals for NBC, CBS and FOX in Wichita Falls (over 50 miles away) over the same antenna. There's nothing special about that antenna. It isn't "digital" optimized or anything like that. I suspect when the Wichita Falls stations start broadcasting in HD at full power (sometime in January) I'll be able to pick up those HD channels OTA as well.
If I have any trouble receiving those channels I can spend a little money on a new antenna and end up getting even more HD channels over the air. I know a few people who can get all of the HD OTA channels from Oklahoma City as well as the Lawton, OK and Wichita Falls, TX market from an antenna here in Lawton.
With HDTV over the air, you pretty much either get it or you don't. When the signal comes in at a satisfactory level it looks every bit as good or even better than anything cable provides. The bit rate is better for one thing.
Carriers like Time Warner, Dish Network, Comcast, etc. need to think about that as do multimedia companies like Viacom, Rainbow and various others. Digital technology is giving viewers more and more options. I could ditch all of my satellite TV service and still see much of what I was missing via Hulu.com, Bit torrent downloads and other alternatives.
Cable TV providers and programmers do not have the same level of bargaining power they had years ago. They would be wise not to piss off their customer base. People like me will only be too happy to inform customers how they can do without cable.
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