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This topic comprises 2 pages: 1 2
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Author
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Topic: Regal acquired by Europe's Cineworld
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David Stambaugh
Film God
Posts: 4021
From: Eugene, Oregon
Registered: Jan 2002
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posted 12-05-2017 10:16 AM
https://www.nytimes.com/2017/12/05/business/dealbook/cineworld-regal-movies.html
Quite a long article but this is the gist of it.
LONDON — The two largest movie theater chains in the United States will soon be owned by foreign companies.
The British movie theater owner Cineworld said on Tuesday that it had agreed to acquire Regal Entertainment Group, one of the biggest cinema operators in the United States, for $3.6 billion.
The deal would greatly expand the scale and geographic footprint of Cineworld, which primarily operates in Europe, and create the world’s second-largest movie theater owner to better compete with AMC Entertainment, which is owned by the Chinese conglomerate Dalian Wanda. The Cineworld-Regal combination would create a company with more than 9,500 screens in 10 countries.
It comes at a time of flux for operators of movie theaters competing for attention and dollars in an increasingly saturated marketplace. At the same time, studios, such as The Walt Disney Company, are exerting more control over when and how their biggest films are shown, putting pressure on operators.
And despite higher average ticket prices, box office revenue is down in the United States this year after a dismal summer. The few standouts were the superhero flicks, “Wonder Woman,” “Guardians of the Galaxy Vol. 2” and “Spider-Man: Homecoming.” The latest adaptation of Stephen King’s “It” was also a bright spot this autumn, but “Justice League,” which brought together some of DC Comics’ biggest heroes, opened to disappointing results in North America last month.
Under the terms of the deal, Cineworld would pay $23 a share in cash for Regal. Shares of Regal closed on Monday at $20.73 a share.
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Bobby Henderson
"Ask me about Trajan."
Posts: 10973
From: Lawton, OK, USA
Registered: Apr 2001
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posted 12-06-2017 01:04 PM
quote: Louis Bornwasser
It occurs to me that the air is being let out of the tires at the exhibitor level at about the same time and rate that the studios will no longer need them or care about them. Certainly no feast in the future if sequels aren't stopped, especially animated ones.
I think the movie industry seems hell-bent on cutting its own throat. Executives aren't overtly saying, "hey let's destroy our jobs!" But all the various cash-in-quick schemes are indeed destroying the industry.
I can't help but laugh at how the movie industry is seriously marginalizing commercial movie theaters. They're so consumed with the idea of focusing everything on the home video end, thinking that's where all the money is to be made. They don't appear to realize money is drying up in the home video market yet still can be made at the commercial theater box office.
Let's take a look at the home video industry: it's in pretty sorry shape compared to its state 10 years ago.
Physical movie disc sales are way down; revenue from that category is now below revenue levels from streaming services like Netflix, Amazon, etc. Consumers are simply not buying movies on disc like they did in the past. Physical movie discs offered the best profit margins in home video sales. Subscription streaming offers far lower margins. Growth is slowing in subscriber additions to streaming services, indicating that sector is reaching its saturation point. Both Netflix and Amazon are spending billions of dollars on their own content, most of it in TV shows, but some of it in 2 hour movies. They're giving their own in-house content the highest visibility in their shitty content browsing interfaces, pushing Hollywood movies to also-ran visibility.
The movie studios have made matters worse for physical disc sales. They now commonly release the "HD Digital" download version of a movie 2-4 weeks ahead of the physical disc release. Studios don't put nearly as much effort into physical disc releases as they did 10-15 years ago. Obviously studio executives want customers to buy the plain, bare bones download version of a movie rather than a retail disc. When faced with downloading a movie consumers are often opting to go the Netflix route or with piracy sources.
Brick and mortar video rental stores are now a rare thing. Thousands of brick and mortar book, music and video stores have closed. Amazon has taken over a big chunk of the movie rental market and is trying to gobble up as much of the books and music market as it can.
I have larger concerns about brick and mortar retail in general. Commercial movie theaters have been an important anchor for many shopping centers and commercial districts in cities. It's one of the things that gives people a reason to get out of the house. If you take away those theaters it will leave behind one hell of a void. People are already staying at home in droves bad enough as it is. Restaurants are another big "out of home" activity and they've been struggling. 3rd quarter 2017 sales were the worst in 5 years. Throw in a record number of retail store closings in 2017, nearly 7000. Service sector jobs by far make up the biggest portion of America's 150 million jobs base. Most of those service sector jobs are in buildings with a physical store front. Online businesses are replacing very few of the jobs lost in brick and mortar retail.
I think it's pretty damned important for the movie studios to stop screwing over movie theaters and instead do more to keep that market segment healthy.
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Bobby Henderson
"Ask me about Trajan."
Posts: 10973
From: Lawton, OK, USA
Registered: Apr 2001
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posted 12-07-2017 10:38 AM
quote: Michael Riley
I wonder if they'll keep those yokels in Knoxville here to run the domestic operations, or if they'll wipe the slate clean? When I worked for Regal, that was always the biggest impediment to success, micromanagement from a bunch of yahoos 1000 miles away that haven't actually run day to day theater operations in decades, if ever.
I figure chances are 50/50 Cineworld will keep the Knoxville HQ of Regal operational. Cineworld needs to have US-based offices set up somewhere. So why not keep what already exists?
However, chances are 100% a good chuck of executive and administrative staff will be cut. Investors will demand staff "efficiences" and elimination of any duplication of efforts.
Regal has been moving 400 employees into a new HQ, a renovated 178,000 square foot former medical office building. A $60 million Riverwalk at the Bridges luxury apartment complex is under construction nearby. Depending on how many of these employees are cut Cineworld might try to get out of the brand new lease and locate its American staff into smaller, cheaper digs.
Soon after Carmike was bought by AMC the Carmike HQ in Columbus, GA was closed and sold.
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