Tag Archives: Cinemark

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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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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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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DCIP Closer To D-Cinema Funding

By J. Sperling Reich

September 12, 2009

The announcement the entire exhibition and distribution industry has been waiting for has finally happened; Digital Cinema Implementation Partners (DCIP) will finally get funding to roll out d-cinema equipment on over 15,000 screens at U.S. exhibitors AMC, Regal and Cinemark. Some may view it as a non-announcement as this doesn’t mean the money is in the bank yet. At the very least though, DCIP’s financing is looking more probable than it did earlier this year when the global financial meltdown was holding up any potential funding.

The Hollywood Reporter is stating that investment bank J.P. Morgan has set out to raise $525 million from brand name lenders before seeking additional sources of cash from private equity firms and the exhibitors themselves. So, while funding is not readily at hand, with a heavyweight such as J.P. Morgan in their corner it hopefully won’t be long before DCIP will be seeing some cash to jump start its efforts. Read More »

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TI’s 4K Announcement Causes Waves - Wither 2K Now?

By Patrick von Sychowski

June 18, 2009

The announcement on Celluloid Junkie that Texas Instruments is developing 4K projector solutions is causing waves throughout the industry. The story was picked up by both THR.com (DLP making the jump to 4K) and Variety (TI leaping into 4K fray), which despite their headline both acknowledge that TI was effectively forced into this situation by the Sony tie up with Regal and AMC.Perhaps the best other coverage came from Eric Taub in the New York Times:

TI has always said that 2K is good enough, with tests showing that consumers can’t see the difference.

TI has been against 4K, until they were for it. On Thursday, the company announced that it would now market 4K technology, which will be incorporated into their next-generation projector technology to be manufactured by a variety of partners.

The company will continue to sell 2K projectors to the majority of its customers, according to Nancy Fares, business manager for TI’s DLP Cinema Products Group.

Ms. Fares said that this is not a case of TI trying to play catchup to Sony, which recently announced a number of large contracts to install its 4K projectors in AMC, Muvico, and Regal Entertainment cinemas. Texas Instruments has been working on 4K technology for two years, she said.

And when TI said that most consumers can’t see the difference between a 2K and 4K image, the company is sticking to its guns.

Their 4K technology will only be installed in about 20 percent of its customers’ theaters, the “brightest and biggest” with screens 70 feet and larger in size.

TI has meanwhile put out a press release providing details:

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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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Posted in Business, Digital 3D, Digital Cinema

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Sources Say TI Moving Toward 4K

By Carolyn Giardina

June 16, 2009

dlp_logo TI is developing but has not commercialized a 4K DLP Cinema system and is pushing for a big exhibitor—perhaps DCIP partner Cinemark–to come onboard, Celluloid Junkie sources report.

Nancy Fares, business manager for DLP Cinema Products Group, was contacted for comment. She only responded: “We have always said our technology is capable of going higher to a resolution of 4K and even higher. It’s about what the market needs and wants.”

AMC and Regal—DCIP’s two additional participants–have demonstrated interest in the resolution, as both recently announced deals to deploy Sony 4K digital cinema projectors.

Some insiders opine that a 4K announcement from TI might lead AMC and Regal to review their Sony deals. Considering the stakes, other insiders question why TI would not have already made the alleged development public.

DLP Cinema projectors are installed in an estimated 6,000 sites in North America, compared with Sony’s estimated 400. But Regal represents a total of 6,775 screens in the US and AMC encompasses 4,628, giving Sony the potential to overtake DLP Cinema with these installations.
Meanwhile, any announcement by TI of a move into 4K may potentially slow further 2K deployments. One insider pointed out that many exhibitors remember the shift from 1.3K to 2K, with 1.3K projectors have to be written off. It has also been suggested that while DCI specifications approve of both 2K and 4K projection, there might be a fear of a competitive disadvantage of 2K, particularly as major Regal and AMC have already committed to 4K.

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Universal and Disney Close To VPF Deal With DCIP

By J. Sperling Reich

September 8, 2008

And then there were four. Four studios that is. Or so says the Wall Street Journal which broke a story today reporting that Universal Pictures and Walt Disney Company have reached a virtual print fee deal with Digital Cinema Implementation Partners, the joint venture formed by North American exhibitors Regal Entertainment, Cinemark and AMC Entertainment to finance, install and maintain digital cinema equipment in their theatres. The three chains, which represent a combined screen count of around 15,000, would like to start rolling out digital cinema as soon as the fourth quarter of this year, in time for the flood of 3D movies studios have slated for release next year.

Previously, DCIP had reached a VPF deal with Twentieth Century Fox, though the studio has never confirmed the news. The signing of four studios is a crucial milestone which DCIP must cross in order to secure the USD $1 billion in financing the company has lined up from J.P. Morgan Chase to pay for all the expensive digital cinema equipment required to outfit theatres. The Wall Street Journal had reported that Paramount Pictures had also signed a VPF agreement with DCIP, which had been rumored in the press but never officially announced. Indeed, by the end of the day Variety had taken the air out of the Wall Street Journal’s big scoop by confirming that Paramount Pictures had not yet signed with DCIP. Read More »

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DCIP Reaches VPF Agreement With Fox

By J. Sperling Reich

July 25, 2008

After industrywide speculation and concern over the absence of any news about virtual print fee (VPF) agreements being signed by Digital Cinema Implementation Partners (DCIP) the company finally announced their first deal which rumor has it is with Twentieth Century Fox. The news was reported by Reuters and has not yet been made official by DCIP, however the company’s CEO, Travis Reid was quoted as saying:

“A party has signed a deal and we think it won’t be long until we have multiple studios.”

There are no details yet about the terms of the deal, nor any confirmation that it is with Fox, though during a conference call on Thursday Regal Entertainment’s CEO confirmed that a VPF agreement had been reached with at least one studio:

“We can’t disclose which studio, but we consider it to be a major milestone. It is always difficult in getting someone to be willing to be the first.”

Paramount is also rumored to be close to announcing a deal with DCIP, as is Walt Disney Studios.

DCIP was formed by North America’s three largest exhibitors - AMC Entertainment, Cinemark and Regal Entertainment - to manage and finance the rollout of digital cinema equipment and technology within each circuit. With 14,000 screens between them it is easy to see why the industry eagerly awaited news that the studios had come to some form of agreement with DCIP to subsidize the cost of installing digital cinema equipment. Due to the large size of the rollout, such a deal was viewed as a bellwether for the types of VPF deals other exhibitors would be able to get. Recent VPF deals announced by other integrators such as AccessIT in the United States and XDC in Europe did little quell everyone’s anticipation over news from DCIP.

No doubt even DCIP was getting a little anxious over the lack of progress on their VPF agreements they were able to make public. The company was founded in February of 2007 by the three theater chains and had hoped to wrap up their negotiations with studios over VPFs by the end of last year. As almost anyone working in or following the industry now knows, the studios began playing hardball with integrators such as DCIP on the contractual terms of the VPF agreements, haggling over every last detail including usage fees for alternative content and the length of the deal. XDC’s VPF with Hollywood studios is reportedly only USD $850 per film, per run.

And there’s one main reason that the rollout of digital cinema has stalled at around 5,000 screens in North America (out of 37,000); rolling stock prints range from USD $1,200 to $1,500 so even with VPFs the the distributors save heaps of money, whereas exhibitors are forced to pay for expensive digital cinema equipment they claim won’t save them any money or increase their revenue. That the standards for this equipment are still being determined by SMPTE and DCI hasn’t helped matters either.

However, in 2009 Hollywood studios plan to release upwards of 11 movies in digital 3D which will require the equipment to be installed on a broader scale. Presently the number of screens equipped for digital 3D in North America hovers around 1,300, making it difficult to release two such films into the market at the same time. News of the DCIP deal may be a relief for a few studio executives have otherwise to struggle to find enough digital screens to place their 3D releases on. Studios have actually begun to push some of their 3D releases back into 2010 to make certain they will have enough screens to put them on.

The thinking within the industry is that once DCIP starts announcing VPF agreements the rollout of digital cinema should ramp up soon thereafter. Michael Lewis, chief executive of 3D systems provider RealD, told Reuters: