When I first graduated from college and was trying to earn enough money to move to Los Angeles I wound up putting my business school degree to use and worked for Philip Morris International in their New York City headquarters. Probably best known as a cigarette manufacturer, they actually owned a lot of brands at the time including General Foods. Every week it was my job to print out dozens of full color sales charts, put them into brand new three ring binders and carry them up to the C-suite offices on the 26th floor where I would turn them over to a secretary. The internet and email would come along later and replace such tasks.
It took me four weeks of ripping the shrink wrap off new three ring binders before I turned to my boss and asked why I didn’t just go and request one of the previous weeks’ binders, rather than keep wasting money purchasing new ones. My boss looked at me for along time before finally asking, “How much does Mike Miles, our CEO, make each year?”
“A lot?” I answered with a hesitant question.
My boss paused once more and said, “His base salary is USD $1.9 million. That’s not counting stock and bonuses. How much is that per hour? If you were to walk into his office and ask him to find a binder from a few weeks ago and he spends five minutes looking for it… how much money would that cost the company?”
The conversation was over. The questions were rhetorical. I never thought about operational costs and man-hours the same way again. My frugal collegiate budget mindset evaporated in the amount of time it took my boss to look back to the printout of his Excel spreadsheet.
I couldn’t help but think of that memory over the past two weeks when I heard that at least four media company CEOs had shown up to help the Alliance of Motion Picture & Television Producers negotiate a new contract with the Writers Guild of America; Disney’ Bob Iger, NBCUniversal’s Donna Langley, Netflix’s Ted Sarandos and Warner Bros. Discovery’s David Zaslav. By 20 September the WGA and AMPTP hadn’t met in a month and both sides were arguing over whose turn it was to counter the other.
This hands on approach to the negotiations which brought an end to the 148 day strike was something the CEOs should have done months earlier, or at the very least, after force majeure was triggered in July. This is because AMPTP President Carol Lombardini is the media companies’ chief negotiator and her only job is to say “no” to any and all contract requests being made by the guilds. That’s not really a negotiation. Still, Lombardini did her job very well this time around; the only problem was the WGA wasn’t taking no for an answer and neither is SAG-AFTRA, the union that represents the actors, also currently on strike. Her staunch refusal to bend on any deal point became such an impediment that a parody X (formerly Twitter) account in her name became a must read because it felt more accurate than humorous.
After five months of picketing, once the CEOs got involved, a tentative WGA contract was hammered out in under five days. Our original prediction that the strikes would end in early October is still technically accurate. The writers will have until 12 October to ratify the contract. During that time, the AMPTP will finally meet with SAG-AFTRA to negotiate a new contract for the actors. They haven’t talked or met at all since the actors went on strike (though there have been back channel conversations).
The good news is both sides can now use some of clauses in the WGA contract as a starting point for discussions. Put another way, SAG-AFTRA can take some of the wins that the WGA earned and try to adapt them. Certain aspects of the SAG-AFTRA contract are much trickier for various reasons, so I wouldn’t be surprised if it takes a week or longer to reach an agreement.
With the WGA contract now public, I could do a deep dive and analyze it here, though there are plenty of others who are doing that publicly. Instead, I will highlight what I’ve heard over the past week from industry professionals from Los Angeles to Asia, whether the work in production, distribution or exhibition. They all want to know, in a five month fight which started with the AMPTP offering a deal of USD $86 million per year and the WGA asking for USD $429 million per year, was the USD $233 million that the writers wound up with worth causing economists estimates to be USD $5 billion in damage to the economy? How would all those crew members, suppliers, retailers, etc. who wondered how they were going to pay expenses for at least the past three months answer that question?
How will movie theatre owners answer that question next summer when studios don’t have any films to release? Because believe me, while the WGA strike was mostly focused on television writers, cinemas will begin feeling the effect of these strikes by next April, if they haven’t already. Will it all have been worth it? Ultimately, when future WGA contracts are negotiated writers will be able to build on the gains of the deal they just got. Other unions can reference the WGA agreement in their own upcoming contract negotiations, possibly averting future strikes. In those regards, perhaps the answer should be a resounding yes.
Those four CEOs might not exactly think so. Of course, today’s media moguls make multiples more than the USD $1.9 million Miles did as a CEO back in the early 1990s (which seems laughably low now). I doubt though that they’ll add the expense of their participation in negotiating the new WGA contract into what the strike cost each of their companies during their next shareholder meetings. Though according to my old boss at Philip Morris, they absolutely should. But I think I can speak for an entire industry, and possibly even my old boss, in saying that this time around, it was money well spent.
Exhibitors
Movie Theatres Continue To Invest in Upgrades and Expansion
For an industry that was written off by the media and financial analysts as one whose best days were behind it, motion picture exhibition must be defying the odds. The last several weeks alone have been filled with announcements of cinema operators upgrading their facilities or opening new theatres, underscoring the investment these business are making on what they obviously believe will be a lucrative future.
Reading International is going bi-coastal in Australia, opening its first Angelika Film Centre outside the United States near Brisbane, an eight screen complex in Woolloongabba, Australia, which includes three premium auditoriums. On the opposite side of the country (and the continent) the company is opening a five-screen Reading Cinemas in Busselton, Western Australia as a key anchor tenant in the new Busselton Central Shopping Centre precinct. The venue is trying out a premium large format concept at the new theatre titled Titan Luxe.
The United Kingdom is getting at least two additional cinemas. The seven-screen purpose-built Reel Cinemas in Burnley opened in early September as part of the multi-million pound development Pioneer Place. Meanwhile Marlow is getting its first movie theatre in nearly 40 years thanks to Everyman. The indie operator is cutting the ribbon on a luxurious two screen venue fitted out with velvet sofas, armchairs and comfy seats. The bar and lounge area looks like it would be worth a visit just for the food and beverages alone.
Flix Brewhouse, which operates dine-in cinema brewpubs, is opening new cinemas so fast they announced two on the same day this past week. Their tenth location, a nine-screen luxury cinema in Mansfield, Texas opened on 28 September. It’s the company’s fifth location in Texas. Then, in early 2024, Flix will open its second location in Albuquerque, New Mexico; a seven-screen 28,000 square foot complex on the east side of town in what used to be a Regal/United Artists arthouse. The facility will be completely overhauled to current Flix Brewhouse standards.
Meanwhile you have TGV Cinemas in Malaysia expanding their partnership with IMAX to install four new big screen auditoriums and upgrading three existing IMAX rooms with IMAX’s laser technology. Cinemex, in Mexico, is also leaning into laser, striking an agreement with Cinionic to upgrade 500 of the circuit’s highest-performing locations with laser projection. Finally, Marcus Theatres is investing in premium large format auditorium, partnering with CJ 4DPLEX to install their first 270-degree panoramic ScreenX theatre at the Marcus Ridge Cinema in New Berlin, Wisconsin.
Source: Celluloid Junkie
Movies
Taylor Swift Goes Global With Concert Film
By now, if you don’t know that Taylor Swift expanded the distribution of her concert film, “Taylor Swift | The Eras Tour,” to all (or at least most) international territories then you very well may be living in a cave. AMC Theatres, which is distributing the film directly for Swift, is working with sub-distributors like Trafalgar Releasing to open the movie globally day-and-date on 13 October, not just in North America. Definitely a smart move on her part, if only to combat piracy.
The film runs about 2 hours and 45 minutes, which is shorter than her three-plus hour concert. That’s probably because they are cutting out the acoustic set of secret one-off songs Swift performs toward the end of each show on the tour. Here’s a free idea for Swift; bundle all those secret song performances into another film and release a sequel after next year’s leg of the tour. (And before someone comments, we know they aren’t filming every show.)
There are really only two reasons to post this story. The first is to remind everyone that the CJ Cinema Summit on 5 October 2023 will be focused on the upcoming release of “Taylor Swift | The Eras Tour” and how exhibitors and service providers are moving at lightning speed to make sure the film is successful. (Spoiler alert… it will be.) Please register to join us or watch the session on-demand.
The second reason is to once again, try to underscore to those in the cinema industry who aren’t aware or don’t believe in the economic impact Swift has in a market. By now everyone on Earth (and probably several other planets) knows the pop-singer may or may-not be dating American football player Travis Kelce of the Kansas City Chiefs. Shots of Swift cheering Kelce on during last Sunday’s televised game helped bring in a whopping 24.3 million viewers, including a usually absent demographic; young women. The price of tickets for next Sunday Night Football’s game in which the Chiefs take on the New York Jets have increased by 40%. Sales of Kelce’s jersey have increased 400%. Kelce’s podcast had a million extra downloads this week. His Instagram account gained hundreds of thousands of followers in a single day. After a picture surfaced of Swift at the game eating chicken with “seemingly ranch dressing” sales of the condiment exploded.
This doesn’t say anything about all the trending TikTok and social media memes that were started after last Sunday, such as all those in which Swifties were having the game of football explained to them or the ones in which they were really glad Swift was being kind enough to lend her concert venue to the National Football League. Another meme had wives telling their dumfounded husbands that Kelce was going to “blow up” now that Swift shined the spotlight on the future Hall of Fame Super Bowl champion. By the way, that one works in reverse with boyfriends telling their girlfriends that Kelce dating Swift will probably do wonders for her career. Did we mention the song parodies? There are so many of these one has to wonder how all these fans will have time to actually come and watch her concert film.
This is all to say that if you own and operate a movie theatre and are showing Swift’s film… for heaven’s sake, be sure to order enough popcorn and soda before it opens!
Source: Celluloid Junkie
Exhibitors
AMC and CJ CGV Strengthen Financials With Additional Equity Capital
Two of the world’s largest movie theatre chains have raised additional equity capital during September, giving them a little more runway as they recover from the pandemic.
AMC, the world’s largest motion picture exhibitor, raised approximately USD $325.5 million of new equity capital through the sale of 40 million shares, at an average price of approximately USD $8.14 per share. This was made possible after agreeing to an estimated USD $129 million settlement in a shareholder lawsuit which paved the way for the company’s share conversion and 10-to-1 reverse stock split back in August. The discounted at-the-market offering on 13 September helped boost the company’s cash reserves, addressing its current liquidity concerns and strengthening its balance sheet. This is on top of the strong third-quarter industry box office, which at the time of the equity offering, was up by 39% in the third quarter over the sam period from 2022.
South Korea’s largest cinema operator, CJ CGV, also faced shareholder resistance upon trying to raise additional capital. On the same day AMC turned to the market to sell new shares, CJ CGV brought in KRW 3.33 trillion won (USD $2.51 billion) through an offering of KRW 44 billion won worth of its shares, for a completion rate of 75.7 to 1. Originally CJ CGV was hoping to rase over a trillion won (USD $754 million) from existing shareholders, but after the company’s stock price dropped, it lowered its goal by KRW 130 billion won (USD $96.1 million). Like AMC, the new cash helps CJ CGV strengthen its balance sheet. They will use a large portion of it to pay down debt. Analysts are forecasting the company’s revenue will be 120% of 2019 levels next year.
Source: Dow Jones
Technology
Vista Launches All-Encompassing Oneview Mobile App
Vista Group has been teasing a new, encompassing mobile app geared toward senior level exhibition executives and managers since at least Cinemacon in April of this year. On Thursday of last week the company launched Oneview, which offers a cinema operator’s C-suite and management team real-time benchmarked and actionable insights across a circuit, right down to the individual theatre and showtime level.
Built with Vista’s Cloud-based technology, Vista Horizon, Oneview provides direct access to insights such as box office, admissions and market share, food and beverage performance, key operational performance metrics, member insights and release calendars. The new product also marks an additional milestone as Vista Group’s first solution to unite data from the company’s cinema management software, Vista Cinema, Numero’s aggregated box office results, as well as Movio Cinema EQ’s loyalty and membership data.
“With Oneview, we’re responding to an essential need among exhibition leaders to quickly absorb vital information and direct their teams to respond to evolving situations within their business,” says Matthew Liebmann, Vista Group’s Chief Product, Innovation, and Marketing Officer. “By essentially allowing users to ‘carry their business in their pockets wherever they are’, we’re confident Oneview will be a game changer.”
Source: Celluloid Junkie
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