The exhibition chain’s stock is up about 7.7% so far today, and hit a 52-week high of $32.60, as its stronger-than-expected Q4 earnings delighted investors — and revived speculation that it might soon be ripe for a takeover. Some analysts say that the stars will align if the leading theater ad sales company, National CineMedia, buys its rival Screenvision. That “could happen this year,” B. Riley’s Eric Wold says. And since Carmike owns about 19% of Screenvision, that “would also put Carmike in play to be acquired by one of the top three domestic exhibitors.” Benchmark Co’s Mike Hickey says that a deal would “create a +$300 million asset within Carmike” potentially enticing bidders to offer about $40 per share. Even without a deal, investors like Carmike’s report that its attendance per screen increased about 3% in Q4. That’s a contrast with AMC, Regal, and Cinemark which were down — one analyst attributed that to the holiday season launches of Sony’s PS4 and Microsoft’s XBox One gaming consoles. What accounted for the difference? Wold says that Carmike benefited from its small market theaters which operate “within somewhat competitor-free film zones.” Maxim Group’s John Tinker pointed to “the success of family-oriented films such as Frozen and The Hunger Games, which align well [with Carmike's] concentration in suburban markets.” And Wedbush Securities’ Michael Pachter noted that the chain bought 52 screens from Cinemark and 147 from Muvico Theaters that “added three IMAX screens, …
A Colorado judge has set an October 14 start date for the trial of the man accused of killing 12 people and injuring 70 others at a megaplex in 2012. Arapahoe County District Court Judge Carlos Samour said today he wants the first group of the 6,000 would-be jurors to report on that date for Phase 1 of jury selection. But attorneys for the accused killer said they will appeal the decision because they want their client to undergo a second psychiatric evaluation, which could stall the proceeding again. In June the court accepted the defendant’s plea of not guilty by reason of insanity, which led to his first psychiatric evaluation. He faces 166 counts of murder, attempted murder and other crimes.
Annie Awards: ‘Frozen’ Wins Big Including Best Feature; Miyazaki Gets Best Writing; Spielberg Honored; ‘Futurama’ & ‘Sofia’ Top TV; ‘Get A Horse!’ Best Short
Disney’s Frozen was on fire tonight at the 41st Annie Awards and now is generating real heat for the upcoming Academy Awards. Having made $864.4M worldwide at the box office since its late-November release, the 3D fantasy musical snagged 5 Annies tonight. Frozen won Best Animated Feature, Best Directing for Chris Buck and Jennifer Lee, Best Music, Production Design and a Voice Acting win for Josh Gad. who also was a presenter. Whether this will translate into Oscar gold remains to be seen. Last year’s big Annie winner, Wreck-It Ralph, which Lee co-wrote, ended up losing the Best Animated Feature Oscar to Pixar’s Brave. However, the 2012 Annie Feature winner Rango did win at the Oscars that year.
“We haven’t even started talking about a sequel yet,” Frozen co-director Jennifer Lee told me before the ceremony started. “We’ve talked about the Broadway musical but not a sequel. No one’s even mentioned it,” said Lee, who just flew in today from a promotional visit to Tokyo.
With 30 awards handed out and hosted by Patrick Warburton, this year’s Annies from UCLA’s Royce Hall also saw animation trailblazer Hayao Miyazaki take home the Writing in an Animated Feature award for The Wind Rises and Disney’s Mickey Mouse throwback pic Get A Horse! — which played before screenings of Frozen — take the Best Animated Short prize. Steven Spielberg, Akira creator Katsuhiro Otomo and Star Wars and Jurassic Park effects whiz Phil Tippett were honored with the Annies’ prestigious Winsor McCay for their contribution to the art form. DreamWorks Animation’s The Croods garnered three awards, for Best Animated Effects in an Animated Production, Character Design and Character Animation. The Chris Meledandri-headed Illumination and Universal’s Despicable Me 2 took the Best Animated TV/Broadcast Commercial award.
A recap of Deadline’s live blog of tonight’s show follows the winners list below.
Disney’s ‘Frozen’ Stays Hot With Sing-Along Version Headed To Theaters
‘Despicable Me 2′ Breaks Records In $80M Home Vid Debut
OSCARS: Best Animation 2013 – Titans Vs. Indies In A Wide Open Race
The Halloween special Toy Story of Terror! and Disney Mickey Mouse each won three awards. Best General Audience Animated TV Production and best Writing in an Animated TV/Broadcast Production went to Futurama, while Disney’s Sofia The First picked up the category’s Preschool Children award. Industrial Light & Magic’s Pacific Rim team won the Animated Effects in a Live Action Production for their work on Warner Bros and Legendary’s apocalyptic blockbuster.
After a slightly late start, host Warburton kicked off the show by making a joke that he has “no experience as a host” but that the Annies are his favorite awards show. He later said of Royce Hall, “What a terrific venue to have the Annies — or, if you’re Seth MacFarlane, a birthday party.” He added that maybe he shouldn’t have mentioned it because “not everybody here was invited.” Later he said, “We lost Brian the dog on Family Guy this year. That was tragic news for fans of the show. … Tragic news for me would be if I found out Rogaine caused brain cancer.” He added that, “So Seth MacFarlane killed a dog. To me that makes him no better than Michael Vick.” The joke got a big laugh.
Congrats to all who took home an Annie tonight, check out the full list of winners below:
Looks like Variety got carried away this afternoon with a story that says “several prominent exhibitors” are rejecting the National Association of Theatre Owners‘new voluntary guidelines calling for a two-minute cap on movie trailers. The site named two chains – Cinemark and AMC Entertainment — saying that their defection raises ”the question of why NATO is pushing the issue at all.” Just one thing: AMC denies the story’s claim that it “has reversed its position” after its rep on the NATO board voted for the new guidelines. “AMC Theatres is in full support of the voluntary NATO In-Theatre Marketing Guidelines, which at their core are about the more efficient and effective use of our industry’s marketing resources,” the company says. “Recently published letters, articles and commentary we’ve seen throughout the industry badly misrepresent the intent of these guidelines. As has always been our practice, this and all studio dealings will be handled directly with our distribution partners as we seek to maximize the box office performance of their films, and we expect that practice to continue.”
The new arrangement replaces the contract from 2012, when Tim Warner replaced Alan Stock after he retired. That deal was set to expire in April but was subject to a one-year extension. With the new agreement, Cinemark “will continue to benefit from [Warner's] global growth and management experience,” Chairman Lee Roy Mitchell says. The exhibition chain also seemed to anoint Robert Copple as heir apparant, promoting him to President and Chief Operating Officer from CFO. In the new job, Warner says, Copple “will remain engaged in the day-to-day operations of the company and will be more available to help execute global strategic initiatives. Specifically, Robert will direct the efforts of our domestic company’s senior management team, while working more directly and on a broader basis with Valmir Fernandes, President of Cinemark International, on strategic initiatives such as FLIX Media and alternative content.”
The addition of the No. 2 exhibition chain is a coup for MovieTickets.com — and a logical development following the settlement in November of the online ticketing company’s suit that charged AMC with a breach of contract when it went exclusively with Fandango. The new non-exclusive relationship adds 4,950 AMC screens to MovieTickets’ tally, for a total of more than 22,000. That “substantially increases our domestic reach” with “some of the highest grossing and busiest locations in many of the strongest markets across the country,” says MovieTickets CEO Joel Cohen. The ticketing service also has deals with Carmike Cinemas, CineMark, Cinepolis, Landmark, Rave Cinemas, and Regal. MovieTickets co-owner Hollywood Media noted in an SEC filing last year that the court agreement with AMC included a “non-exclusive ticketing agreement,” but the terms were confidential. The companies have had a rocky relationship since 2000 when they created MovieTickets as a 50-50 venture, later adding National Amusements. In 2012 Hollywood charged AMC with “unconscionable, unfair, and deceptive acts and practices” that culminated with its decision that year to move its online business exclusively to Comcast-owned Fandango. The suit added that MovieTickets’ “current viability has been threatened” by AMC, which at the time still owned 26.2% of MovieTickets. AMC said in a recent SEC filing that Fandango sold 17.2M tickets for the chain in 2012. AMC is owned by China’s Wanda Group, but …
The No. 2 exhibition chain will trade on the NYSE under the symbol “AMC.” It will use the proceeds from the $331M offering to pay down some of its high-interest debt and for the catch-all “general corporate purposes.” The offering will leave China’s Wanda Group, which paid more than $2.6B for AMC last year, firmly in control of the theater company. It is selling 18,421,053 shares of its Class A stock that entitles owners to one vote per share, and will keep the Class B stock with three votes per share. Class A owners just have 7.8% of the votes while Class B holders have 92.2%. The stock price values AMC Entertainment at about 6.8 times its estimated cash flow for 2014, a bit lower than rivals Regal Entertainment and Cinemark at about 7.5 times cash flow, MKM Partners’ Eric Handler says. AMC has a lot of debt and its theaters, concentrated in major cities, pay high rent. Handler estimates that AMC pays about $90,000 per screen for rent vs. $58,000 for Regal and $55,000 for Cinemark. But exhibition stocks have been hot: Regal shares are +37.7% in 2013, Cinemark is +25.3%, and Carmike is +65.9%. AMC’s expected to end this year generating $103.3M in net income from continuing operations on revenues of $2.78B.
BOX OFFICE FINAL: Weather Impacts BO But Attendance Up Overall Year To Date; ‘The Hobbit’ Lighter But Strong, ‘Frozen’ Steals ‘Madea Christmas’ As ‘American Hustle’ Kicks It On Six Screens
3RD UPDATE, 1:40 PM: Every Monday, we run the final numbers for the Top 20 for the weekend so an accurate accounting can be seen by all. Sony reported this morning that due to a computer glitch, the final per-screen numbers for American Hustle, which played on six screen this weekend, were actually $123,409 not $113,000 as it previously reported. Interesting, too, is that PLF’s (led by 92 Cinemark XD in the U.S.) and IMAX accounted for roughly $15.47M of Warner Bros./MGM’s The Hobbit: Desolation Of Smaug. Here is the final Top 10 from Rentrak — the full Top 20 list is at the bottom of the post.
1. The Hobbit: The Desolation Of Smaug, Warner Bros., $73,645,197, 3,903 locations, $18,869 average, $73,645,197, 1 week.
2. Frozen, Disney, $22,568,138, 3,716 locations, $6,073 average, $164,772,211, 4 weeks.
3. Tyler Perry’s A Madea Christmas, Lionsgate, $16,007,634, 2,194 locations, $7,296 average, $16,007,634, 1 week.
4. The Hunger Games: Catching Fire, Lionsgate, $13,671,666, 3,563 locations, $3,837 average, $357,503,663, 4 weeks.
5. Thor: The Dark World, Disney, $2,820,055, 2,264 locations, $1,246 average, $198,245,744, 6 weeks.
6. Out Of The Furnace,”Relativity Media, $2,425,978, 2,101 locations, $1,155 average, $9,574,440, 2 weeks.
7. Delivery Man, Disney, $1,968,891, 2,041 locations, $965 average, $28,091,575, 4 weeks.
8. Philomena, The Weinstein Company, $1,820,479, 835 locations, $2,180 average, $11,083,457, 4 weeks.
9. The Book Thief, 20th Century Fox, $1,734,679, 1,158 locations, $1,498 average, $14,936,447, 6 weeks.
10. Homefront, Open Road, $1,706,286, 2,103 locations, $811 average, $18,507,155, 3 weeks.
BOX OFFICE THUMBNAIL: Weather impacts this weekend, Attendance overall up from last year: The Hobbit: The Desolation of Smaug (Warner Bros, wide) playing to lighter numbers than last year’s first installment of the trilogy; Tyler Perry’s A Madea Christmas (Lionsgate, wide) looks to be lowest opening for a Madea title; American Hustle (Sony, limited) very strong per screens; Saving Mr. Banks (Disney, limited) not banking; Inside Llewyn Davis (CBS Films, expanded to 15 locales) per screens falling fast; Hours starring the late Paul Walker (Pantelion Films – joint venture between Lionsgate and Grupo Televisa– limited in 16 theaters and on VOD).
2ND UPDATE, SUNDAY, 9:20 AM: The severe weather across the nation – winter storms across 23 states and 100 million people – also impacted the nation’s box office this weekend. It seems to have affected the older pictures most. That being said, I will post the newcomers and top five first and then update again with the rest of the pack. Overall, year-to-date attendance is up and expected to surpass $10.7 billion (which was last year’s total). Responding to feedback from readers, will highlight numbers for easier reading.
The Hobbit: Desolation of Smaug brought in around another $24.4M on Saturday after a Friday haul of $31.1M and is expected at $73.6M (according to WB) for its debut weekend, industry estimates show. The Warner Bros./MGM franchise played on 3,903 theaters for a per screen of around $18,700. The IMAX numbers for Hobbit accounted for about 12.5% of the national gross or about $9.18M in 344 locales. All top 10 locations for Hobbit have IMAX screens. Internationally, The Hobbit has brought in $205M so far for the studio.
“Our suburban business was severely off last night due to the inclement weather,” said Dan Fellman, president of distribution for Warner Bros. Other veteran distributors also noted this, citing up to 50% drops last night in east coast theaters vs. 20% drops in L.A. theaters.
Frozen, the animated family film from the Walt Disney Co., held a solid second place this weekend up about 101% from Friday (family pics traditionally excel on Saturdays) to bring in another $10M in 3,716 theaters and estimates for the weekend are now around $22.3M to $22.7M for the three-day. That would bring its cume up to around $164 million in its four weeks of release. It’s per is about $6,000.
Tyler Perry’s A Madea Christmas from Lionsgate was up 10% from Friday with an estimated take of between $15.8M and $15.9M, a far cry from other outings for the pic which in the past have opened to at least $25M. This is the first time the picture has opened in this time-frame pre-Christmas. It is in 2,194 theaters for an estimated per screen of roughly $7,200. This is Tyler Perry’s and Lionsgate’s 16th collaboration and marks its 8th Madea film together.
American Hustle, which bowed in only six theaters in N.Y and L.A., continued to do well on Saturday night for Sony, adding another $270,000 to bring its estimated weekend per screen total to around $113,000 its debut weekend. Very strong numbers. Up around 30% from Friday night. Estimates have the total gross hovering around the $700,000 mark. The critically-acclaimed picture will go wide next weekend in around 2,500 theaters.
Sony notes that the opening is higher than director David O. Russell’s two previous films, The Fighter (which had a $75,000 average and went on to make $93.6M in domestic box office and 34.5M overseas) and Silver Linings Playbook $27,687; that went onto make $132M domestically). Both films, likewise, rode critical acclaim and positive word-of-mouth right into Oscar season.
“It’s an incredible start for an incredible film,” said Rory Bruer, president of worldwide distribution for Sony Pictures. “I think David O’Russell created a film that gives crazy, cool performances that will be savored for years to come.” Those who have seen the picture that I know are planning to go back and see it again. So expect some repeat business and a long tail for this entertaining romp.
Disney’s Saving Mr. Banks, on 15 screens in its first weekend out in limited release, was up around %29 from Friday and its per screen averages are running anywhere from $26,000 to $28,000 in estimates right now for the three-day. It rolls out wide next weekend in a marketplace that looks to be packed.
Fourth place is another Lionsgate franchise, Hunger Games: Catching Fire with an estimated Saturday take of anywhere between $5.7M and $5.8M so the three-day puts it at around $13.2M to $13.4M to bring its cume up to about $357M. In 3,663 locales, it has a per screen of around $3,700. Internationally, Lionsgate has the film grossing an estimated $19.5M from 83 markets, so that brings the total international cume to $372.9 million. With the domestic added in, that pushes it to around $730M worldwide in just four weeks of release.
Thor: A Dark World from Disney took in another $1.2M on Saturday and should finish the weekend with another $2.7 million or so to bring its overall cume to around $198M. It is in its sixth week of release.
The slate of nominations for Best Animated Features this year are A Letter To Momo (GKIDS), Despicable Me 2 (Universal Pictures), Ernest & Celestine (GKIDS), Frozen (Walt Disney Animation Studios), Monsters University (Pixar Animation Studios), The Croods (DreamWorks Animations), and The Wind Rises (Studio Ghibli and The Walt Disney Studios). Winners will be announced during the 41st Annual Annie Awards ceremony February 1 at UCLA’s Royce Hall. The full list of nominees follows:
Interesting to see how much growth took place at the exhibition chain’s U.S. venues as opposed to Latin America, which is supposed to be its most attractive opportunity. Overall, Cinemark generated net income in Q3 of $80.7M, +68.9% vs the period last year, on revenues of $757.6, +19.6%. Analysts anticipated lower revenue, about $733.2M. And earnings at 69 cents a share soared past forecasts for 55 cents. Much of that is due to what Cinemark says was its all-time high attendance: +16.4% to 81.0M globally, with domestic +23% to 50.6M and international +6.8% to 30.4M. Admission revenues were +19.2% to $479.6M helped by a 3.7% increase in the average outlay for a domestic ticket, to $6.68 — although the average price dropped 3.1% at international venues to $4.66. Concession revenues were +21.1% to $242.3M with the average domestic patron spending $3.38 (+2.7%) and international spending $2.34 (+3.5%). CEO Tim Warner credits North America’s “robust box office in the third quarter with an increase of 6.4%, fueled by a record summer box office.” The company’s worldwide operations “have now outperformed the North American industry in 17 of the past 18 consecutive quarters on a currency adjusted basis.”
PTC Slams Gotham’s IFC Center For “Industrial Fraud” In Letting Teens See NC-17 ‘Blue Is The Warmest Color’
EXCLUSIVE: Blue Is The Warmest Color has gotten the Parents Television Council steamed in all the wrong ways, so much so that the watchdog group has veered from small-screen scrutiny to take on the racy feature film. The advocacy group ripped into NYC’s IFC Center for last week’s decision to flout the MPAA’s adults-only NC-17 rating for the 2013 Palme d’Or winner and invite teenagers to view the sexual-awakening tale that charmed Cannes. “The IFC Center’s decision to usurp parental and family authority by allowing unfettered access to children of adult-rated, explicit sexual content is a direct assault on parents and families across the country,” PTC President Tim Winter thundered in a letter sent to IFC Center General Manager and SVP John Vanco. “Your selective unenforcement (sic) of the MPAA guidelines in this instances approaches industrial fraud, in that the system is intended specifically for the purpose of parental reliance, and that reliance has been obviated. We ask that you immediately reconsider this self-serving and undermining business decision, and instead do what is in the right and best interests of parents, families and children. The Parents Television Council will bring its full weight and credit to bear to make a national issue of your decision, via every available means, until it is reversed,” the letter concludes. It isn’t clear how PTC’s full weight will impact a Gotham art house theater; MPAA issues its ratings, but those classifications are voluntary, and theaters are not under any obligation to follow them.
It’s taken a while to get this rolling: Studios and exhibitors introduced their joint satellite movie delivery plans at CinemaCon in early 2012. But now their Digital Cinema Distribution Coalition is up and running, and has a CEO — former tech and studio exec Randolph Blotky. The coalition says today that it actually went live at the end of September when it signed up its 300th theater for satellite distribution. “That’s the magic number when we became responsible” for beaming movies to dishes at local venues, Blotky tells me. DCDC has already distributed one film — Fox’s Runner Runner — and plans to have 31 by year end including Disney’s Frozen and Lionsgate’s The Hunger Games: Catching Fire. It’s a huge savings. Satellite delivery is cheaper than distributing films on hard drives and can cost just 5% of the $2,500 that it once took to distribute reels of celluloid films to theaters. That united DCDC partners from exhibition (AMC Theaters, Cinemark, and Regal) and Hollywood (Warner Bros and Universal). Disney, Sony, Fox, Paramount, and Lionsgate also provide content, and Southern Theaters and National Amusements are customers.
RealD‘s shares are touching all-time lows, falling 4% to $7.71 in mid-day trading, after Stifel analyst Benjamin Mogil downgraded the 3D technology company to “hold” from “buy.” The company is at an “inflection point,” he says. It continues to build 3D screens domestically on top of the 13,100 at 2,900 locations it had at the end of June. That’s worrisome because “there are few weekends where 3D screen capacity is an issue” and “given declining 3D demand appears to us to be unnecessary.” The danger is that exhibitors will feel empowered to bargain for lower equipment rental rates when their contracts with RealD are up for renewal. Lots of its contracts with theater owners including Regal, AMC, and Cinemark will expire before the end of 2018. In addition, RealD is investing to bring 3D to home viewers. But execs have not “articulated any timelines/benchmarks for these initiatives…nor have they articulated how much money whey are willing to spend.” That’s a problem because investors “have limited visibility on where the home market technology stands from a commercial perspective.” It might make sense for RealD to go private, Mogil says. But that would be difficult. Insiders own just 15% of the shares, and privatization “would crimp investments in the home [3D initiatives], a key for management’s growth platform.”
The exhibition chain’s board says it will pay 25 cents per share each quarter, up from 21 cents. The increase follows the Mexican Federal Competition Commission’s decision last week to reject Cinemark‘s $125M deal to sell its 31 theaters in the country to Groupo Cinemex. Cinemark says it will appeal the ruling. The chain has been making big investments in its Latin American theaters to replace traditional projectors with digital ones. “If Cinemark can raise the dividend now, we see potential for more hikes next year and beyond when this [capital expenditure] bulge rolls off,” says Lazard Capital Markets’ Barton Crockett. With the increase, Cinemark’s dividend yield rises to 3.2% from 2.9% but is still behind Regal’s 4.4%. Last week Cinemark reported record admission revenues in Q2, a strong quarter for the entire industry. Its shares are off about 1% in early trading on a down day for the stock markets.
Barco has scored a hit in the immersive audio turf war previewed at April’s CinemaCon. Global chain Cinemark is siding with the open sound format employed by Barco’s Auro 11.1 over competitor Dolby Atmos. The theater company has committed to deploying Auro 11.1 in over 150 premium Extreme Digital (XD) screens beginning this year in its “tier one” markets, including North America. Dominant sound specialist Dolby has seen its Dolby Atmos system used exclusively on major studio projects including WB’s Man Of Steel, Pacific Rim, and Gravity, Paramount’s Star Trek Into Darkness, Disney’s Marvel’s Iron Man 3 and Monsters University, and Fox’s Percy Jackson: Sea Of Monsters and Wolverine. Meanwhile Auro 11.1′s major native productions thus far are highlighted by DreamWorks Animation’s The Croods and Fox’s Turbo – a modest start. (Sony’s Elysium was mixed in both Auro 11.1 and Dolby Atmos.) But Cinemark operates 467 theaters in 39 US states, Brazil, Mexico, Argentina and 10 additional Latin American countries, and their business means at least a minor victory for Barco’s immersive audio contender…
The exhibition ad sales company had a solid quarter, although its outlook for Q3 looks a little worrisome. National CineMedia just reported that it had net income of $9.5M in Q2, up from a $1.9M loss in the period last year, on revenues of $122.8M, +11.5%. Analysts thought revenues would be a little lower, at about $120M. Earnings at 19 cents a share beat the consensus forecast by a penny. Revenues at the main ad sales business were up 15.4% to $116.9M. But the Fathom Events unit, which produces alternative content for theaters, was down 33% to $5.9M. CEO Kurt Hall says that efforts to broaden its client base and expand use of digital projectors paid off — as did cost controls and theater acquisitions by founding members AMC Entertainment, Cinemark, and Regal. National Cinemedia also is benefiting from “steady economic recovery and the impact on the broader media marketplace of increasing DVR adoption and programming fragmentation, making the selling proposition of our expanding national network and engaging theater environment stronger than ever.” Even so, the company projects that Q3 revenue could fall as much as 10% to $130M.
Sony Pictures Offers Free Admission To ‘White House Down’ For Active Military And Veterans On July 4
As a thank you to America’s troops, active military personnel and veterans will be admitted with one guest to see Columbia Pictures’ White House Down on July 4 at any Regal Entertainment Group, AMC, Cinemark, or Carmike Cinemas theater, Sony Pictures Entertainment said today. The free admission is available on July 4 only. Those eligible must show proper military ID and seating is available on a first-come, first-served basis. Channing Tatum stars as Capitol Policeman John Cale who’s just been denied his dream job with the Secret Service of protecting President James Sawyer (Jamie Foxx). Not wanting to let down his little girl with the news, he takes her on a tour of the White House, when the complex is overtaken by a heavily armed paramilitary group. It’s now up to Cale to save the president, his daughter, and the country. Roland Emmerich directs from a script by James Vanderbilt.
Investors who bet on media should have warm memories from Q2. The Dow Jones U.S. Media Index rose 6.0% in the quarter vs. the Standard and Poor’s 500 which was +2.4%. Sony led the Big Media pack with its share price rising 21.8% in the quarter. It was followed by Disney (+11.2%), Viacom (+10.7%), News Corp (+6.8%), CBS (+4.7%), Time Warner (+0.3%), and Comcast (-0.5%). More broadly in media, TV station owners were among the biggest winners led by Sinclair (+44.8%) and LIN (+39.2%). Others that paid off in the quarter include DreamWorks Animation (+35.3%), Pandora (+29.9%), E.W. Scripps (+29.6%), Live Nation (+25.3%), and Best Buy (+23.4%). While most gained, the sector had a hodgepodge of losers including newspaper publisher McClatchy Co (-21.4%), TiVo (-10.8%), Apple (-10.5%), IMAX (-7.0%), AOL (-5.3%), Cinemark (-5.2%), and Discovery (-1.9%).
The Georgia-based exhibition chain says it’s hunting to buy theaters. But its shares jumped 6.7% today after a Bloomberg story said that it could be the industry’s next big target. Carmike “may offer the best value” for rivals such as Regal and Cinemark that also want to expand. Carmike could be attractive because it has 2,500 screens — and its stock price is relatively cheap. The company trades for about 3.8 times earnings while Regal goes for 23.7 times and Cinemark is 20.3 times. Others have also noted Carmike’s appeal as a takeover target. B. Riley analyst Eric Wold has long made the case that it could give one of the larger chains a lot more clout in negotiating with Hollywood studios. But Carmike CEO David Passman told analysts last month that his company is “actively evaluating potential acquisitions and new builds, as we move toward our target of 300 theaters and 3,000 screens.” Buyers are salivating over many smaller exhibition operations that either can’t afford to pay for digital projection technology as studios phase out celluloid films, or that had to heavily borrow to make the transition. So is Carmike a buyer or seller? With so many big companies looking for deals — including overseas companies following last year’s acquisition of AMC Entertainment by China’s Wanda Group — “one cannot ignore the possibility that Carmike could potentially become a target itself,” says Barrington Research’s James Goss.