Cineworld’s purchase of Regal is a bit like a python swallowing a goat – it can be done, but the initial result will be more goat than snake-shaped. Once investors and analysts had time to digest the proposed merger (no pun intended), the brief rally in Cineworld’s shares ended and the stock fell from 694.50 to 557. It was Cineworld’s largest one-day drop in a decade. Meanwhile Regal shares have continued to be up, meaning that the market thinks the deal will be done (as it now has), but that it is not great value for Cineworld shareholders, whose stakes might be diluted as a result of the merger.
28% of Cineworld is controlled by Global City Holdings, the Polish-based entertainment holding company controlled by Moshe (Mooky) and Israel Greidinger. The family inherited a handful of cinemas in the north Israeli city of Haifa and went on to open the country’s first multiplex in 1982. From there the company expanded into Central and Eastern Europe as Cinema City, which was merged with Cineworld four years ago. The Greidinger family owned 25% of the merged entity and acquired an additional 3%. Cineworld then went on to by Picturehouse in the UK, while opening multiplexes at a fast pace both in the UK and Eastern Europe.
Mooky Greidinger is quoted as saying that “Regal is a great business,” and that it will provide Cineworld “with the optimal platform on which we can continue our growth strategy”. But despite the talk of “synergies” and “upgrading” Regal’s sites (which Regal is doing already, thank you very much), there is limited growth potential in the US market, not least compared to Cineworld’s territories in C&E Europe. This deal is really all about size. At a time when Disney is asking for 65% of BO and four-weeks of screen time in North America for “Star Wars: the Last Jedi”, cinemas need global reach and around 10,000 screens to hold their own versus studios – Cineworld+Regal would have around 9,500.
We anticipated this merger mania back in 2015 and predicted the world could end up with just six global majors: Vue and Cineworld, Cinemark and Cinepolis, Wanda (including AMC & Odeon) and CJ CGV. Interestingly the terms of the deal give Regal until 22 January to find a better offer, during the so-called “go shop period”. Cinepolis, CJ CGV and Vue CEOs could end up spending Christmas pouring over spreadsheets with investment bankers for a potential counter bid. Happy holiday shopping!
US BO down this year; 99.8% of US cinemas will play Star Wars; Amazon Prime members can buy Jumanji preview tickets; are movie re-releases increasing in UK?; Cinesa polls finds what customers want; Samsung Pay accepted by CGV (again); Netflix ‘no impact’ on cinema in India;public service messages in Indian cinemas; cinema advertising up in the UK and 2017 movie mashup.
USA – Despite “Star Wars: the Last Jedi” the North American box office is expected to fall short of last year’s record high of USD $11.4 billion by 2% or more. As of 27 November it was 4.3% behind last year. A slow summer season was not sufficiently offset by hits like “It” in the autumn. Variety – 29 November 2017
USA (SD) – Dells Theatre in Dell Rapids, South Dakota (pop. 3,700) will not show the new “Star Wars”. The story here is not that small-town theatres that amount to 0.02% don’t want to tie up their big (sometimes only) screen for four weeks, but that pretty much every larger cinema and multiplex operator in the US is going along with Disney’s terms. Argus Leader – 28 November 2017
USA – “Star Wars: the Last Jedi” is not the only box office hope for the holidays, with “Jumanji: Welcome to the Jungle” the No. 2 contender. Amazon Prime members will be able to buy preview tickets 12 days prior to the films first pre-screening on 8 December. The deal is powered by Atom Tickets, so it is not sold through Amazon, and can be used in Regal, AMC, ArcLight Cinemas, and National Amusements theatre venues across the US. Small but interesting move by Amazon. Variety – 29 November 2017
UK – Stephen Follows asks if the number of re-releases of movies is on the increase, with the 20th anniversary of “Titanic” just the latest. 5.4% of all movies in UK cinemas in the last decade have been re-releases. As you can see from the chart above, there has been a steady rise, broken by the last two years. But looking at percentage of movies released and box office the picture is more mixed. And you will never guess what the highest grossing re-release is. Stephen Follows – 4 December 2017
Spain – Cinesa recently conducted a poll amongst its customers what they would like to see in their cinemas apart form the latest release. “42.5% indicated plays; 34%, classic cinema; 34%, documentaries; 31%, concerts, and 20%, operas. ” Interestingly the stats were maintained across all age brackets. The size of the screen and auditorium also counted for more than the projection quality. El Pais (ES) – 28 November 2017
Korea (Republic of, South) – CGV has signed a deal with Samsung to accept Samsung Pay at its box office and concessions counters. The two previously had a deal in 2015 that was discontinued due to credit card problems and difficulties of linking loyalty programmes. The first 25,000 Samsung Pay customers to try it will get a get a discount coupon of KRW 4,000 (USD $3.68) for a popcorn combo. DT (KR) – 4 December 2017
India – Has the launch of Netflix and Amazon Prime Video had an impact on cinema going in India? Not according to an investor call with PVR, which says that it felt ‘no impact’ and that the increase of media consumption is to be welcomed. “All we would like to say that cinema business is extremely robust and continues to remain robust and India being a growth market we are absolutely no challenge for Netflix or any other alternate source of entertainment.” The lack of major hits is a bigger challenge, but note Gianchandani comment about US being a static market in terms of growth, while India remains under-screened. (Are you listening, Mooky?). Medianama – 1 December 2017
India – The Indian government is clamping down on multiplex chains that have stopped showing public service messages. Short films about “perils of tobacco and alcohol abuse, ills of dowry, immunisation of children and other social issues” were ways to reach the masses in India but multiplexes seem to feel that their clientele is too sophisticated for such messages. Not so says I&B Ministry and “directive on mandatory exhibition of such public awareness messages is likely to be issued soon.” The Asian Age – 3 December 2017
UK – Brands are turning to cinemas to reach audiences otherwise distracted by smartphones and social media. “According to DCM, its brand count is up 4% year-on-year, with more than 180 advertisers using 60-second-plus ads over the past year.” Revenue is up 40% this year for DCM, which is partly attributed to brand safety worries related to social media. DCM has also launched a creative studio to help target and help brands in cinemas. Warc – 4 December 2017
Sleepy Skunk has once again compiled the best look back on the cinematic year that was with clips from every last one of the films that made for a memorable cinema experience last year – and not just from Hollywood. I must admit, as before I had a tear in my eye towards the end. So since we can;t see it in the cinema, watch it on the biggest screen and crank up the volume. ET Canada – 1 December 2017
Latest posts by Patrick von Sychowski (see all)
- Cinema News Digest – Tuesday 5 December 2017 - December 5, 2017
- EXCLUSIVE – CJ Interviews Wim Buyens, Newly Appointed CEO of Barco’s New Cinema Joint Venture - December 4, 2017
- Cineworld In Negotiations to Acquire Regal – BREAKING NEWS - November 28, 2017