Tag Archives: AMC Theatres

It’s Official - DCIP Gets $660 Million In Funding

March 10, 2010

DCIP + Money.jpg

A boisterous cheer erupted this morning during the Inter-Society Digital Cinema Forum (ISDCF) meeting when the proceedings were interrupted with news that Digital Cinema Implementation Partners (DCIP) had just officially announced they had received their financing. Indeed, DCIP published a press release stating that they had raised USD $660 million in financing. The funds will be used to roll out digital cinema in North America’s three largest circuits; AMC Theatres, Cinemark and Regal Cinemas.

As we previously reported when it was still a widely circulated industry rumor, DCIP’s financing will come in the form of USD $445 million in senior bank debt, USD $135 million in junior capital and USD $80 million in equity from the theatre chains themselves. JPMorgan assisted DCIP in raising the money which is being supplied by a who’s who of financial institutions including Bank of America, Barclays Bank, Citi, Credit Suisse, Deutsche Bank, GE Capital, Morgan Stanley and the Sumitomo Mitsui Banking Corporation.

There are sure to be tons of news stories generated by DCIP’s announcement, especially since it will allow media outlets to wave around the trendy “3D” phrase in hopes of attracting a few extra eyeballs. The reports will cite that nearly 14,000 screens throughout North America will be converted to digital by AMC, Cinemark and Regal who formed DCIP as a joint venture in 2007. (Truthfully, it’s probably more like 10,000 screens when all is said and done). No doubt they may even go so far as to pull press release quote from Travis Reid, DCIP’s CEO, which states:

“We are excited that with the continued support of our owners, studio partners and financial advisors we have completed this critical step in our process. Over the next few years, we’ll be aggressively implementing the transition to digital technology in theatres across North America. Guests will enjoy enhanced presentation and additional entertainment options at their favorite theatres as Exhibitors and content providers capitalize on the flexibility enabled by digital technology, including many upcoming releases using digital 3D. Having this substantial financial package and our studio partnerships in place, we’re pleased to launch this new era of technology to guests looking for an exceptional out-of-home experience.”

Check out the way Mr. Reid so adeptly snuck the word “capitalize” into that quote. Pretty slick. It’s funny though, because I always imagined his press release quote would read more along the lines of:

“Phew! That was harder then it needed to be and dare I say it’s about time we landed some money. Thankfully I will no longer have to answer questions every other week about when DCIP will be getting its financing.”

Since the mainstream media will take care of all the cheerleading about how 3D will soon be coming to a theatre near you, I figured it might be interesting to further explain the types of financing DCIP is getting. I mean what’s with all these terms like “senior debt” and “junior capital”? Does the senior debt have offspring named after it? And does the junior capital have a father with the same name? Read More »

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Odeon, Italy and AMC Reach Deal With Disney On “Alice”

By J. Sperling Reich

March 1, 2010

Alice In Wonderland - Alice.jpg Executives at Walt Disney Studios must be breathing a huge sigh of relief having reached a deal with Odeon Cinemas in the United Kingdom and Italian exhibitors to show their upcoming tentpole release “Alice In Wonderland”. Additionally, Disney reached an accord with AMC Theatres to show the Tim Burton helmed film in North America when it is released on March 5th.

After announcing their plans to release “Alice In Wonderland” on DVD in June, just three months after its theatrical release rather than the usual four months, Odeon, the U.K.’s largest cinema chain, publicly threatened to boycott the film. So did exhibitors in Italy. AMC never made any public statements about a boycott, but delayed signing any agreement to show the film. Most of the details about the agreements were kept private by both parties, but according to a story in Variety, here is what we know:

In the U.K. Disney will not begin advertising the DVD until six to eight weeks after the film hits theatres.
In Italy, Disney will release three big movies during the summer, rather than waiting until fall. Traditionally, the summer box office grosses have been tepid compared with those in autumn. “Prince of Persia: The Sands of Time” will open on August 20th, while “Toy Story 3″ and “The Sorcerer’s Apprentice” will also open have summer playdates.
Disney has extended the release of “Alice In Wonderland” on DVD from 12 weeksafter its theatrical to 13.

In the U.K., assurances were given that the studio won’t begin advertising for the DVD until six or eight weeks after the theatrical bow. It’s likely that exhibs elsewhere asked for the same terms.
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More Rumblings About DCIP’s Financing

By J. Sperling Reich

February 28, 2010

Last week both the New York Times and the Wall Street Journal reported that an announcement from Digital Cinema Implementation Partners about their financing was imminent. The opportunity to play 3D content will certainly be welcomed by AMC Theatres, Regal Cinemas and Cinemark, however from the way the two newspapers covered the story you might get the impression it was the only reason. The financing would allow Hollywood studios to “roll out more 3-D movies in the wake of the success of James Cameron’s ‘Avatar’” wrote the Wall Street Journal and the New York Times said the “money would allow future 3-D film releases”.

Both media outlets seem to have gotten their hands on some internal briefings or at the very least seen an early draft of a press release as they have updated some of the details from previous reports about DCIP’s financing. A more exact figure of USD $660 million was cited by both papers which is down from the original USD $700 million rumor which was first floating around. As well, the number of screens has been upped to 14,000 from 12,000 with the Wall Street Journal putting the number of actual theatre sites being converted at 1,100. The New York Times laid out the details as follows:

According to a draft announcement making the rounds in Hollywood, the new financing, arranged by JPMorgan and Blackstone Advisory Partners, would total about $660 million. Of that, $445 million is expected to come from senior bank debt, $135 million from what is described as “junior capital” and $80 million from equity contributed by the member theater circuits. Nine banks, including Bank of America and Citibank, are part of the lending group. Blackstone raised the $135 million from other investors.

I always find it amusing to see how mainstream media covers the transition to digital cinema in reporting such news. The Wall Street Journal piece states:

In a digital conversion, theaters rip out old celluloid film projectors, and stop receiving weekly shipments of large film canisters. They instead use fiber optic lines to transfer huge digital film files.

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Posted in Digital Cinema, Integrators

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A Recap Of Disney’s Adventures With “Alice”

By J. Sperling Reich

February 22, 2010

Alice In Wonderland.jpg Surely Walt Disney Studios was hoping their upcoming release “Alice In Wonderland” would generate a lot of media attention before it hits theatres on March 5th, though they probably weren’t trying to create the kind of buzz the picture received over this past week. Theatre owners in North America and Europe protested when the studio announced it would move up the DVD release of the movie to early June, just three months after Tim Burton’s adaptation of Lewis Carroll’s classic is distributed theatrically.

The announcement was made on February 8th by Disney’s CEO, Bob Iger, during an earnings call and seemed to come as a surprise to many. A surprising number of newspapers, websites and radio shows beginning running numerous stories about the dispute just two days later and through the course of last week. In fact, the Los Angeles Times managed to sum up the latest battle over movie release windows rather nicely:

The flare-up illustrates how an arcane topic once only of interest to Hollywood executives can affect moviegoers around the world.

The L.A. Times, along with The Wrap, touched on the fact that studios have been meeting with key North American exhibitors (probably Regal Cinemas, AMC Theatres and Cinemark) to negotiate a deal on shortening theatrical release windows. These meetings weren’t done surreptitiously. In January John Fithian, President of the National Association of Theatre Owners, told attendees of the International Cinema Technology Association’s tech conference that theatrical windows would be changing to help studios maximize revenues from home releases:

“As a person who represents the cinema industry I’m not going to tell you that we’re very happy that that model is going to change, but it has to. But it has to change logically and it has to change with studios and exhibitors sitting down together and analyzing the models. It’s not a great secret, this is happening. Leading studio executives, leading cinema representatives are talking about what these models should look like. The good news is we’re all at the table talking. That’s much better and much more cooperative than if studio x decided just to abandon the model and release a major picture in the cinema and in the home roughly at the same time. That’s not going to happen. What’s going to happen is some scientific thinking and some research and a deliberative process to maximize the model for the studios without killing the model for exhibition.”

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JPMorgan Finds $700 Million For DCIP

By J. Sperling Reich

February 10, 2010

That collective sigh of relief you may have heard over this past weekend no doubt came from the North American motion picture exhibition and distribution industries. The Los Angeles Times report that investment bank JPMorgan was finally able to round up roughly USD $700 million for Digital Cinema Implementation Partners must have come as some relief.

Heaven knows we’ve been hearing about DCIP’s quest for financing for well over a year now. It seems at every ShoWest, Cinema Expo or Show East for the past 18 months we’ve been told by investment bankers that money is on the way. Though let’s face it, if the staggering amount of money being sought wasn’t enough to cause a delay, the worldwide credit crunch certainly didn’t help. Financing hasn’t been easy to come buy in any business sector and no matter how lucrative the project.

Of course, DCIP is the deployment entity founded by three of the world’s largest exhibitors; AMC Theatres, Cinemark and Regal Cinemas. With anonymous sources close to the negotiations confirming that DCIP’s financing will be announced in the next two weeks, the company can finally begin the rollout digital cinema technology on 12,000 screens across the United States and Canada.

Back in 2008 JPMorgan, armed with virtual print fee agreements from the studios, went looking for USD $1 billion for DCIP to convert 14,000 screens across all three circuits. Since then, AMC has gobbled up Kerasotes adding another 900 odd screens to the mix. There was no word on which screens or theatres will be converted or what will happen to those screens which don’t make it into the first 12,000. Nor was a time frame given to complete the transition, though it has been widely expected to take three years.

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Posted in Digital Cinema, Integrators

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Report: Movie Theatre Popcorn Makes You Fat (Surprise!)

By J. Sperling Reich

November 19, 2009

As if theatre owners didn’t have enough to worry about with studios shrinking release windows at every opportunity, they may soon have to start worrying about moviegoers bypassing the real bread and butter of any exhibitor’s business, or more appropriately the popcorn and butter. A new study conducted by the non-profit Center for Science in the Public Interest and released earlier today reports that the food items found at most movie theatre concession stands are incredibly unhealthy. Lab tests revealed that eating a medium popcorn and soda combo from Regal Cinemas was the equivalent of eating three McDonald’s Quarter Pounders topped with 12 pats of butter. For those with a more of an interest in nutrition, that’s 1610 calories and 60 grams (three days’ worth) of saturated fat.

The CSPI report also found that the candy sold by most exhibitors is no better. An extra large box of Junior Mints contains 570 calories and 8 grams of fat. Raisinets are 420 calories and 11 grams of fat. M&Ms may be tiny but they pack in 790 calories and more than a half a day’s supply of saturated fat (16 grams). Then there’s the calorie king of all movie theatre confections, Reese’s Pieces which are loaded with 1,160 calories and 35 grams of saturated fat. To hammer the point home the study compares the intake of such candy to eating a 16-once T-bone stake with a buttered baked potato as a side order. It’s a miracle that E.T. the Extra-Terrestrial’s heart was still able to glow after downing all those Reese’s Pieces in Steven Spielberg’s blockbuster back in the early 1980s. The alien rightfully should’ve keeled over from a heart attack according to CSPI.

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It’s Official: TI Targets 4K; Cinemark Makes Deal

By Carolyn Giardina

June 17, 2009

dlp_logo1 It’s official: On the heels of our previous Celluloid Junkie post on this subject, TI announced that it plans to develop 4K as an extension of its next-gen DLP Cinema projection technology.

The new platform—which TI said would comply with the DCI spec—is slated to launch at the end of the year and initially support 2K. TI aims to offer 4K sometime in 2010.

Meanwhile, Barco inked a deal to deploy TI’s developing 4K technology to the Cinemark theater chain—a notable move, as additional DCIP members Regal and AMC both recently announced deals with Sony.

“Regal and AMC are no stranger to DLP Cinema,” said Nancy Fares, business manager for DLP Cinema Products Group. “I hope this will give them an option to think about.”

Fares reported that a 1.2 inch 4K chip would be developed and released first, “but there are not limitations.” She added that TI would also continue 2K development. 4K, she said, would offer choices, including support for 2D screens as big as 100 feet, and 3D screens as big as 75 feet. It’s not expected that the developing technology will be able to be retrofitted to the current system.

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How much did AMC pay for 54 Sony 4Ks?

By Patrick von Sychowski

October 19, 2007

The tail end of ShowEast brings the announcement that AMC Theatres will install 54 of Sony’s 4K projectors in four of its new cinemas. The press release gives the details of how many projectors will go into which multiplexes and when:

Sony will provide 54 SXRD 4K digital cinema systems at new AMC theatres in Dallas (12 screens); Indianapolis (14 screens); Riverside, Calif. (16 screens); and San Diego (12 screens). Work will begin next month, with the theaters scheduled to open in December.

The theaters will feature a combination of Sony’s SRX-R210 10,000 lumen* model and the SRX-R220 18,000 lumen* unit. The systems, which were specifically designed for theater applications, will be paired with Sony’s LMT-100 Media Block servers.

“This inaugural effort with AMC Entertainment is the latest example of the exhibition and motion picture industry’s continued adoption of 4K digital cinema technology,” said John Scarcella, president of Sony Electronics’ Broadcast and Business Solutions Company.

But if you read the whole press release there is something missing. A quote from AMC. No ‘We are thrilled to be working with Sony to bring our patrons the highest quality digital….yadi…yada…’ And this tells us off that there is something unusual about this announcement and deal.

More specifically, how much did AMC pay for these projectors and on what terms were they installed?

Sony SXRD It seems strange that AMC, which is part of DCIP, should decide to suddenly install fifty odd projectors when they are presumably just months away from concluding VPF negotiations with the Hollywood studios, which will form the basis for funding the rollout in 2008. It’s also not as if there is pressure to install 4K projectors in time for an upcoming 4K film release, like there is for 2K projectors for the digital 3D version of ‘Beowulf‘ this autumn. Which leads me to guess that AMC must have got these projectors from Soy on very favorable terms. Perhaps even free. Because DCIP has already been testing the 4, so it is not as if AMC needed a beta field test. For Sony, this gives them more prestige than the single US exhibitor deployment with Muvico. They must also be hoping that this will put them in a better position for when DCIP places its order for 2008.

Having said that, good things are being said about Sony’s Theatre Management System (TMS), plus the Hollywood studios have made clear that they will not pay VPFs for equipment going into new cinemas, where no 35mm projector or print is being replaced, and these are all new sites. Still, we will have to wait for AMC’s next 4K filing to get any details on what AMC did or didn’t pay for this. Until then, any article about the AMC-Sony deployment should end with the disclaimer ‘Financial details of this transaction were not disclosed.’

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