Wall Street usually shows little love for the movie business with its typically low, and unpredictable, profit margins. But in a combined look at the studio and exhibition businesses this morning, MoffettNathanson Research’s Michael Nathanson and Robert Fishman tell investors that it’s time to take a fresh look — as long as they proceed with caution. They lowered profit estimates for major exhibition chains Regal and Cinemark, citing expectations for weaker domestic summer box office results vs 2013. They project a full-year decline of 1.6% to $10.7B followed by a 5% jump in 2015 to $11.3B and then a drop of 2.6% in 2016 to $11.0B. The analysts appeared more upbeat about the studios. “After several terrible years post the popping of the DVD bubble, we believe the film industry is showing signs of health,” they say. “The combination of fewer releases, greater international focus and lower overhead expenses are all driving studio margins ahead of pre-recession levels. These results show that a good crisis wasn’t wasted in Hollywood.” Revenues fell over the last few years at the big four film studios (Warner Bros, Disney, Fox, and Paramount) as they reduced their output. Yet cash flow margins improved to a little under 12% which is “a tribute to their ability to curb bloated studio expenses.”
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 …
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.
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 …
Add Cinemark to the list of exhibition chains licking their wounds from the weak Q1 box office. The company reports this morning that it generated net income of $33.1M, -22.9% vs the period last year, on revenues of $547.8M, -5.4%. The revenue figure was slightly short of the $550.4M that analysts anticipated. But earnings at 28 cents a share beat forecasts for 24 cents. Admissions revenues fell 6.4% to $349.4M as a 6.7% drop in worldwide attendance to 57.4M wiped out the 1 cent gain in the average ticket price to $6.09. And concession revenue fell 4.1% to $172.4M, even as average sales per patron rose 8 cents to $3. All of the fall-off in attendance took place at domestic theaters (-13% to 34.7M) while Cinemark’s international ones were up 4.8% to 22.8M.
Cinemark To Sell Theaters In Mexico
Texas-based Cinemark Holdings will sell its Mexico theaters to Grupo Cinemex and Cadena Mexicana de Exhibicion, the company announced. The Mexico circuit encompasses 290 screens in 31 theaters. Cinemark CEO Tim Warner said the sale would allow Cinemark to concentrate on its remaining Latin American theaters in Central and South America. Cinemark said its Mexico operation’s unaudited revenues for the 12 months ending September 30, 2012 were $73.7 million from 12.9 million admissions with a net income of $7.9 million. Sale of the Mexico theaters is subject to closing conditions and regulatory approval.
Ireland Reauthorizes Film & TV Incentive With 4% Increase
Ireland’s film and TV tax incentive has been signed into law and extended through to 2020. Value of the incentive commonly known as Section 481 will increase to 32% of qualifying expenditures from 28% from 2015. Minister for Arts Heritage and the Gaeltacht Jimmy Deenihan acknolwedged the new law during a visit to the set of Frank, which he described “an example of the excellent work the Irish film industry is producing.” Michael Fassbinder stars in Frank with Domhnall Gleeson and Maggie Gyllenhaal. The project centers on a band fronted by an eccentric leader Frank, played by Fassbender. Currently shooting in Dublin and Wicklow, it’s directed by Lenny Abrahamson and co-produced by Ireland’s Element Pictures and the UK’s Runaway Fridge Productions. Other big-budget projects to benefit from the incentive include The History Channel’s Vikings and BBC’s Ripper Street.
Here’s yet another indication that movie theater owners are making peace with the idea that their customers also want to spend time being entertained at home. This weekend 24 Cinemark theaters in five markets – …
The Colorado multiplex where a gunman opened fire in a crowded theater watching a July 20 midnight screening of The Dark Knight Rises is reopening today. A private ceremony …
The accused gunman in the Aurora, Colorado movie theater shooting will now not be arraigned until March 12, a judge ruled today. James Holmes was scheduled for arraignment Friday but Judge William Sylvester delayed …
Some family members of victims of the Aurora, Colorado movie theater shooting are outraged over an invitation they received from Cinemark to attend “a special evening of remembrance” and a movie in the theater where their loved ones were killed. The letter, published today in the Denver Post, is signed by eight relatives of victims who say they are particularly upset that the invitation was sent during the holidays. A portion of the letter follows below:
To the Management of Cinemark USA, Inc.:
During the holiday we didn’t think anyone or anything could make our grief worse but you, Cinemark, have managed to do just that by sending us an invitation two days after Christmas inviting us to attend the re-opening of your theater in Aurora where our loved ones were massacred.Thanks for making what is a very difficult holiday season that much more difficult. Timing is everything and yours is awful.
You (Cinemark) has shown, and continues to show, ZERO compassion to the families of the victims whose loved ones were killed in their theater. You, Cinemark, have never once reached out to the families to offer condolences.
This disgusting offer that you’d “like to invite you and a guest to a special evening of remembrance on Thursday, January 17 at 5 PM” followed by the showing of a movie and then telling us to be sure “to reserve our tickets” is wholly offensive to the memory of our loved ones.
The star-filled concert will be widely shown on TV and streamed online — but this should provide an opportunity for fans who don’t have a ticket to the Madison Square Garden event to enjoy a communal experience with immersive video and sound. National CineMedia will provide a feed of the 12-12-12 benefit over its Digital Broadcast Network to more than 200 Cinemark, Century and Tinseltown theaters. They’ll show it live beginning at 7:30 ET, and charge about the same price the venue would for a child’s movie ticket with all proceeds going to victims of Hurricane Sandy. The concert will feature Alicia Keys, Eric Clapton, Bruce Springsteen, Billy Joel, Kanye West, The Rolling Stones, The Who, and Paul McCartney. Other chains including Clearview and National Amusements also will show the concert in some theaters, but Cinemark appears to be committing the most venues.
This is a sad sign of the times: The exhibition chain has decided it must give customers a special incentive to respect the movies, and each other. It unveiled today CineMode — a component within its iPhone and Android smartphone app — that can determine whether the owner uses the mobile device during a film, and send digital coupons to those who leave them alone. “It is important to develop tools that maximize and preserve the movie-going experience,” says Cinemark’s marketing and communications VP James Meredith. He adds that customers have asked the chain to “design an alternative and creative solution” to keep others from lighting up their phones in the dark theater. Before a film starts, Cinemark will flash a message on the movie screen urging customers to launch CineMode. The app will dim the smartphone’s screen and ask users to turn the volume off so incoming calls only cause the phone to vibrate. Customers must stay in CineMode throughout the film. If they do, then the company says it will automatically send a coupon to be stored in the app’s Rewards section.
Like it did with the first round of lawsuits, the theater chain has quickly responded to the most recent legal actions against it for the July 20 shooting at its Aurora, Colo, cinema. Late last week, Cinemark filed motions (read two of them here and here) to dismiss the October 11 civil complaints from parents of victims of the midnight The Dark Knight Rises screening shooting. The exhibitor seeks to have the claims dismissed because each one “fails to state a claim upon which relief can be granted as a matter of law,” arguing that what happened was not its fault. “It would be patently unfair, and legally unsound, to impose on Cinemark, a private business in the entertainment industry, the duty and burden to have foreseen and prevented the criminal equivalent of a meteor falling from the sky,” said Cinemark’s lawyers in their October 18 motions. The shootings by alleged gunman James Holmes left 12 dead and 58 wounded.