Why Is Carmike Cinemas Suddenly For Sale?

Carmike Cinemas For Sale

Cinema operators seem to be putting themselves up for sale at such a rapid pace these days that anyone following the cinema exhibition space might believe the industry is in dire straits.

It’s been nearly three years since Wanda purchased AMC Cinemas. Regal Entertainment put themselves on the market in October of last year, but changed their mind three months later when a suitable buyer didn’t show up. Then last month the United Kingdom based Odeon put themselves on the market for a third time.

Add to this list Carmike Cinemas. Last Friday shares of the fourth largest North American cinema chain rose 12% after Reuters reported the company had hired investment bank JP Morgan Chase & Co. to explore a sale. Carmike, which is headquartered in Columbus, GA, was of no help in confirming whether the news was accurate, issuing the standard and expected statement, “The Company has stated that its policy is not to comment on unusual market activity or rumors.”

Unfortunately, the news media and stock analysts do not adhere to such policies which meant they were free to produce a endless number of derivative stories providing details easily found on Carmike’s website. Our initial reaction to the news was to suspect the exhibitor might be trying to draw attention away from a less positive development. This standard business practice has proven rather effective throughout the ages.

However, the report surfaced almost two weeks after Carmike posted its fourth quarter earnings for 2014 which were down. During the quarter the chain had an earnings per share of USD ($0.04), well under analysts expectations of USD $0.20. Still an increase of 7.9% in revenue to USD $185 million caused the company’s stock price to rise 2.2% after its announcement to $32.01. As well, though it may not be ideal to have negative earnings in one’s quarterly financial reports, the reason for the shortfall was attributed by stock-watchers to the cost of the companies recent acquisitions binge.

Carmike President and Chief Executive Officer David Passman was certain to point this out during an earning’s call on March 2nd, reminding attendees, “The fourth quarter was our first full reporting period including the Digiplex acquisition, which was completed in mid-August. Our organization has acquired over 750 screens in just over three years, and we believe there is further runway ahead for consolidation.”

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Cinemark Expands Premium Concept With Upscale Theatre In Silicon Beach

Cinemark Playa Vista at The Runway

Cinemark Playa Vista and XD at The Runway

Cinemark, the third largest cinema chain in the United States, can add nine more screens this evening to the more than 5,700 it operates throughout the country. This weekend marks the grand opening of the Cinemark Playa Vista and XD, the ninth and latest of the circuit’s NextGen multiplex venues which are geared toward offering high-end amenities. The opening signals Cinemark positioning itself as a ‘premium’ cinema brand and broadening the geographical footprint of upscale theatres in the US centre of moviemaking.

Cinemark now operates 70 theatres in California, comprised of 835 screens, most of which are the result of acquiring Century Theatres in 2006 and Rave Motion Pictures in 2012. Only 18 of these cinemas are in southern California, despite the region’s dense population of over 22 million people. The company plans on changing this over the next year by opening three new southland multiplexes; Carson will be home to a 13 screen complex, 14 screens are being built in Downey and Palm Springs will host a 12-screen facility.

Usually the opening of a new cinema in the United States wouldn’t warrant special attention, even by Celluloid Junkie where it would normally be included in our daily news roundup. However, a number of factors have Cinemark going out of their way to build awareness of the opening through advertising and news media coverage.

Cinemark’s Playa Vista theatre has been long in the planning, having first been announced in July of 2012 for a May 2014 opening. The theatre is one of the anchor tenants of The Runway, a brand new mixed-use development constructed at a cost of USD $260 million by Lincoln Property. The project will ultimately house 420 apartments, 35,000 square feet in three office buildings and 221,00 square of retail space. Cinemark spent USD $9 million on their new 46,000 square foot theatre. A Whole Foods grocery store will be moving in as another anchor tenant later this year.

The development sits on land once owned by the legendary tycoon Howard Hughes for his global aerospace empire, thus it’s name, The Runway. In fact, the two large hangers where Hughes built what became known as the “Spruce Goose” are still standing there today. For decades the land sat unused alongside the Ballona Wetlands, a natural wildlife habitat stretching two miles to the Pacific Ocean. It is the very same property on which DreamWorks SKG hoped to build a movie and television studio in the 1990s, a plan which faced stiff opposition from those wanting to protect the nearby wetlands.

However, environmental groups could only hold off developers for so long. The Hughes land, which sits east of Playa del Rey and Marina del Rey, south of Santa Monica and Venice, west of Culver City and north of Westchester, was officially founded as Playa Vista in 2002. And that’s when things start to get really interesting… and at times, a bit contentious.

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Though Major Exhibitors Still Boycott Simultaneous VOD Releases From Netflix, the Oscars Willingly Accept Them

Beasts of No Nation

Idris Elba in “Beasts of No Nation”

On Monday of last week, Deadline broke the news that Netflix was making another move into feature films by acquiring “Beasts Of No Nation” for a reported USD $12 million. This was followed the trade publication Variety which published three stories on the same subject in quick succession, the headlines for which could have been written before the news they detailed had actually occurred or been made public.

The first headline read, “Netflix Makes Another Bigscreen Splash With ‘Beasts of No Nation’” and laid out the information presented by Deadline less than an hour earlier, while adding their own take about how the acquisition was meant to “bolster its awards season status” (more on that in a moment).

The second and third headlines on the subject could have been predicted by anyone following the film industry over the last few years and came within 24 hours. By Tuesday morning Variety told us “Netflix Releasing ‘Beasts of No Nation’ Simultaneously in Theaters and Streaming Service” and by that afternoon was able to inform us “Major Theater Chains to Boycott Netflix’s ‘Beasts of No Nation’“.

Identical headlines are likely to appear every time Netflix purchases another feature length film it plans to distribute. The title of the movie is all that need be altered. We had seen similar headlines in the same sequential order last October when Netflix announced their intention to distribute the sequel to the martial arts classic “Crouching Tiger, Hidden Dragon” this August day-and-date in cinemas and through its subscription video-on-demand streaming service.

This latest Netflix pickup is from the much-in-demand director Cary Fukunaga fresh off an Emmy win for his work on the first season of HBO’s “True Detective”. Based on Uzodinma Iweala’s critically acclaimed debut novel of the same name, its story centers around a boy forced to become a child soldier in an unnamed African country. The film stars Idres Elba as a guerrilla leader who turns the boy into his protégé through a dehumanizing process meant to train him as a soldier.

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Exageratting China’s February Box Office Victory Over the U.S.

Dragon Blade

There is an idiom in the English language that states, “Don’t take any wooden nickels”. The phrase sprang up in the United States during the early 20th-century when, during the Great Depression, banks would hand out wooden nickels which could be traded in for prizes. This was practice was designed to attract customers into banks which were seen as unreliable at the time.

The phrase, “Don’t take any wooden nickels” was usually said in parting as a warning not to be duped or cheated by someone who might want to pass off a wooden nickel as legal tender. This same aphorism could also be used to remind us of the circumspect nature required when reviewing specific news media stories, though we already have a more direct recommendation in the saying “Don’t believe everything you read”.

This is certainly true in the rash of articles and posts from media outlets far and wide reporting that motion picture theatrical box office in China during the month of February surpassed that of the United States for the first time ever. While there is no doubt this is true numerically, these news stories were designed to foreshadow the not-so-distant day when China will become the number one movie market in the world, ahead of North America, which presently holds the title. Industry pundits can’t help themselves in writing about every minute step toward this inevitability in their desire to be the first to report when it occurs.

Yet one must look a little deeper than the actual February grosses to understand whether the news is at all significant. There’s an old adage instructing us just how to examine such reports; “Read between the lines”.

For some time now media outlets, specifically trade publications, have been juggling the variables used to report on box office receipts. This leads to a form of what I like to refer to as of “selective exaggeration”. Examples are easy to spot and will usually read something along the lines of, “The debut of ‘Big Blockbuster 2′ sets a new record for the opening of a comedy featuring a talking teddy bear opposite a female lead when bowing on an even numbered Friday on an odd number of screens in November”. These new records take so many categories into account it seems one might have a better shot at a black jack table in Macau than they do of ever coming across a release with comparable attributes.

What many of the news stories about China’s box office triumph did not cover was that February is one of the months with the country’s highest movie attendance thanks to the Lunar New Year holiday. Last February Chinese box office amounted to CNY ¥3.04 billion (USD $482.6 million), compared to CNY ¥4.07 billion (USD $650 million) last month. That’s a noteworthy increase of 35%, keeping the country on track with the 36% growth seen in 2014. The first day of Lunar New Year alone set single-day ticket sales record in China, with theatres raking in CNY ¥360 million (USD $48.9 million), according to the State General Administration of Press, Publication, Radio, Film and Television (SAPPRFT) which tracks such statistics.

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Breaking News: Police Find More Stolen Digital Cinema Equipment Belonging To Quanta DGT

Ana Cláudia Medina of DECO

Ana Cláudia Medina of DECO at the warehouse where the stolen digital cinema equipment was discovered.

It may be proving easier to steal 121 auditoriums worth of digital cinema equipment than it is to actually hide or fence the stolen devices.  Early Monday morning Brazilian law enforcement discovered a warehouse in Campo Grande, Brazil filled with some of the digital cinema equipment stolen from Quanta DGT in early February.

The Delegacia Especializada de Combate ao Crime Organizado (DECO) or Special Delegation to Combat Organized Crime, had been investigating the crime since February 19th when the goods would have entered the state of Mato Grosso Do Sul. According to Ana Claudia Medina, the DECO delegate in charge of the investigation, suspicion centered on the warehouse located at 4466 Rua Filomena Segundo Nascimento, the main street in Jardim Itamaracá a section of Campo Grande, the state’s capitol.

Search and arrest warrants were issued, before DECO moved in to search out the stolen goods, though no arrests were made. The owner of the warehouse where the equipment was found was unaware his facility was being used for criminal activity, having only recently signed a lease agreement with the alleged perpetrators. “He has testified and was discarded as a member of the gang,” said Medina of the warehouse owner. “Arrest warrants have already been ordered,” she added, though would not provide further details as the investigation is ongoing.

Authorities counted up to 31 Barco projectors in the warehouse and are awaiting “experts”, presumably from Quanta DGT to arrive and examine the equipment before tallying up the number of devices that had been located. Medina said, “There is at least BRL R$5 million (USD $1.71 million) in merchandise. Witnesses said they saw at least three trucks doing the downloading. I believe that the other equipment must be in another state.”

Medina’s theory is likely correct. In mid-February, roughly 44 screens worth of digital cinema equipment turned up in the back of a semi-truck near Morro do Papagaio in Belo Horizonte, the capital of Minas Gerais, one of Brazil’s 26 states. In that particular instance the discovery of the stolen devices occurred by happenstance after police pulled the truck over during a routine traffic stop. The driver of the truck managed to elude captivity.

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Metropolitan Opera Announces “Live in HD” Series For 2015-16 Season

The Met: Live In HD 2015-16 Season

The annual announcement of The Metropolitan Opera’s upcoming season is always certain to spur a bit of highbrow cultural reportage among media outlets that go for that sort of thing. Such was the case today when The Met revealed the list of productions being planned for their 2015-16 season. While opera aficionados like myself yearn to visit Lincoln Center in person to catch one of the 25 productions The Met will be staging next season, having ten of these operas brought to us via our local cinemas is just as good, if not at times better, and certainly less expensive.

Once again, The Met will produce the award winning series “The Met: Live in HD“, beaming it out to 2,000 movie theatres in 70 countries around the world. As in previous years, The Met will include all six of its new productions among the ten that will be broadcast via satellite to cinemas. This includes new stagings of Verdi’s “Otello” with tenor Aleksandrs Antonenko on , Berg’s “Lulu” starring soprano Marlis Petersen in one of her signature roles, Bizet’s “Les Pêcheurs de Perles”, Puccini’s “Manon Lescaut” and Strauss’s “Elektra”.

One new production sure be a big draw is Donizetti’s “Roberto Devereux” on April 16, 2016. Not only is the opera being performed for the first time ever by The Met, but it will star renown bel canto soprano Sondra Radvanovsky singing the role of Elizabeth I. This will mark the first time a soprano has attempted to sing all three of Donizetti’s Tudor Queens (including “Anna Bolena” and “Maria Stuarda”) in New York during a single season. Performing Donezetti’s Tudor trilogy so close together is an operatic Triple Crown not achieved on a New York stage since Beverly Sills pulled off the extraordinary feat in the early 1970s.

Verdi’s “Il Trovatore” will kick off the 2015-16 season on October 3rd with the role of Leonora being sung for the first time at The Met by soprano superstar Anna Netrebko. Netrebko is a favorite of The Met’s (and frankly at any opera company in which she performs). She won raves in Verdi’s “Macbeth” last year and has appeared in at least 11 of The Met’s over 90 “Live in HD” productions. Netrebko will return to The Met on February 28, 2016 to make her New York recital debut in a solo show.

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Breaking News: Quanta DGT Recovers Part of Their Stolen Digital Cinema Equipment

A truck seized in Belo Horizonte, Brazil was filled with digital cinema equipment stolen from Quanta DGT

A truck seized in Belo Horizonte, Brazil was filled with digital cinema equipment stolen from Quanta DGT

The thieves who made off with more than 120 screens worth of digital cinema equipment from Quanta DGT could run, but they couldn’t hide. Actually scratch that. Apparently they could run, but they couldn’t hide all of the digital cinema devices they stole from the Latin American integrator earlier this month.

When police in Belo Horizonte, Brazil stopped a semi-truck on Wednesday for further examination they discovered at least 40 digital cinema projectors and servers inside. Police pulled the truck over to inspect the lock on its 11 meter (40 foot) trailer, but when they stepped away to check the driver’s documentation, he managed to run away, leaving his cargo behind. Naturally the police wanted to investigate the contents of the trailer and upon opening it they discovered it was packed with Barco, Dolby and Doremi cinema equipment, all of it stolen from Quanta DGT.

The original theft took place from Quanta DGT’s warehouse in Rio de Janeiro, Brazil where the digital cinema kits were prepped, packaged and loaded onto trucks for delivery to exhibitors beginning on February 2nd. On or about February 1st the equipment was offloaded by thieves who used their own transport to haul the stolen goods away. Since then the crime has been under investigation by Brazilian law enforcement, including the Delegacia de Roubos e Furtos de Carga (Department of Robbery and Theft of Cargo).

Authorities are now tracing ownership of the seized truck whose original owner in Rio de Janeiro sold it to someone in Belo Horizonte, the sixth largest city in Brazil some five hours away by car. Law enforcement will continue to investigate the heist in hopes of recovering the remaining stolen equipment. Quanta DGT is offering a generous reward for any reports, anonymous or otherwise, leading to the location of the stolen devices. (And by generous, we mean enough to actually outfit a cinema auditorium of your own).

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Kodak Finalizes Deal With Studios To Save Film

YouTube Preview Image

In news that is sure to make the likes of Christopher Nolan and Quentin Tarantino rather happy, Kodak announced earlier today that they have finalized a deal to continue supplying film stock to all six major Hollywood studios; 20th Century Fox, Walt Disney Company, Warner Bros., NBC Universal, Paramount Pictures and Sony Pictures.

The agreement was reached after roughly six months of negotiations, beginning last summer after studios guaranteed the purchase of set quantities of film stock over the course of several years. The way it was reported at the time, even by us, it seemed as if it was a done deal. Apparently, contractual terms still needed to be worked out, and today’s press release is merely the culmination of those discussions.

The pact will enable Kodak to keep its motion picture film manufacturing facility open for business. As recently as the middle of last year it looked as if Kodak might have to shutter the plant, which the company says costs a minimum of USD $50 million per year to run. Sales of the company’s motion picture film have dropped 96% over the last 10 years due to the rise of high-end digital technologies for production, distribution, exhibition and storage. The demand for film stock dramatically decreased during the last several years as most movie theatres around the world fully adopted digital projection.

Kodak is now the industry’s only remaining film manufacturer. Likewise, Fotokem is the sole motion picture lab in Los Angeles capable of processing film stock.

Kodak CEO Jeff Clarke told the Wall Street Journal the company was “very close to the difficult decision of having to stop manufacturing film”. However, as his press release statement explains:

“With the support of the studios, we will continue to provide motion picture film, with its unparalleled richness and unique textures, to enable filmmakers to tell their stories and demonstrate their art.”

Indeed, besides Nolan and Tarantino, directors such as J.J. Abrams, Judd Apatow and Martin Scorsese were among those who pledged to continue shooting their movies on film for as long as it was possible. They publicly urged studios to reach an agreement with Kodak to ensure the survival of the medium.

Meanwhile, Kodak has set out to increase demand and awareness of its motion picture film stock through a new marketing effort dubbed #FilmWorthy. The campaign is meant to highlight what movies are being shot on film, why directors are choosing the format to tell their stories and to Kodak’s “commitment to not only preserving the medium, but helping it thrive.”

Quanta DGT Suffers Major Digital Cinema Equipment Heist

Quanta DGT

More than 120 screens worth of digital cinema equipment was stolen from at least one, possibly two, warehouses in Rio de Janeiro, Brazil over the weekend, delivering a setback to the country’s ongoing digital conversion. The incident highlights the precautions taken by the motion picture industry took when adopting digital projection technology to safeguard against devices falling into the wrong hands.

Quanta DGT, a leading Latin American integrator in the midst of deploying the equipment, estimates its value at BRL R$24.54 million (USD $9 million). [Full Disclosure: I have had a past, though not current, professional relationship with Telem, a partner in Quanta DGT.] News of the heist began to circulate on Monday afternoon, with initial reports being published (naturally) in Portuguese. Details have been sketchy and thus some of what we have to pass along is purely speculative.

The stolen equipment had been prepped for installation and loaded onto trucks for transport to cinemas beginning this week. This only managed to make it easier for thieves to make off with the kit, since each auditoriums devices had been packaged together on palettes. The stolen equipment includes, though is not limited to, Barco projectors with their pedestals and lenses, Doremi servers, Dolby CP750 audio processors, automation systems, universal power supplies, Multivac hoods and even theatre management systems.

It is unclear how many facilities were involved in the burglary. One report has thieves striking a single warehouse and another has them hitting two warehouses on opposite sides of the city. The perpetrators manage to disable and/or stole the on-site security equipment. Adding insult to injury, they probably used the facility’s own forklifts to move equipment into their own getaway vehicles.

Obviously, walking off with such a large amount of heavy digital cinema equipment could not be done easily, quickly or without a modicum of planning. Because the investigation is ongoing, Rio de Janeiro police aren’t naming potential suspects or divulging any leads. One thought is that whoever pulled off the heist had to know about the existence of the equipment and what was required to haul it away, not to mention have access to such resources. The customs expediters and logistics transport service provider comes to mind. Again, this is speculation.

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