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This topic comprises 7 pages: 1 2 3 4 5 6 7
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Topic: AMC Buys Carmike
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Martin McCaffery
Film God
Posts: 2481
From: Montgomery, AL
Registered: Jun 99
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posted 12-20-2016 03:34 PM
And they're clear for take-off:
Variety
quote:
AMC Entertainment Reaches Settlement With Justice Department to Clear Carmike Merger
DECEMBER 20, 2016 | 08:55AM PT
AMC Entertainment has reached a settlement with antitrust officials at the Justice Department that will clear the way for its $1.2 billion acquisition of Carmike Cinemas.
AMC will divest theaters in 15 markets, sell off its holdings, and relinquish governance rights in National CineMedia, and transfer 24 theaters with 384 screens to the network of Screenvision Media.
“Moviegoers across the United States have benefited from head-to-head competition between AMC and Carmike that has kept ticket prices in check and delivered a higher quality movie experience,” said Renata Hesse, acting assistant attorney in the DOJ’s Antitrust Division. “Today’s settlement will ensure that movie theater competition is preserved in 15 local markets where AMC and Carmike currently compete.”
She also said that requiring AMC to divest from National CineMedia and transfer screens to Screenvision “will promote continued vigorous competition between the two leading cinema advertising networks — competition that the division fought to protect when it blocked the NCM-Screenvision merger.”
The DOJ filed suit to block the NCM-Screenvision merger in November of 2014. The two companies then abandoned their plans to combine. NCM and Screenvision together serve more than 80% of U.S. movie screens and compete for exclusive contracts for pre-show advertising.
The DOJ had concerns with the AMC-Carmike merger because they are competitors in 15 markets.
Under the terms of the settlement, which still must be approved by a federal judge, AMC must divest the majority of its equity interest in NCM so that it owns no more than 4.99% of the company.
The settlement also requires “firewalls” to ensure that AMC does not obtain NCM’s, Screenvision’s, or other movie exhibitors’ competitively sensitive information “or become a conduit for the flow of such information between NCM and Screenvision,” according to the DOJ.
As I suspected, I think this means the end to AMC's theatre here, in Montgomery, the former RAVE. Where else to they directly compete?
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Bobby Henderson
"Ask me about Trajan."
Posts: 10973
From: Lawton, OK, USA
Registered: Apr 2001
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posted 12-20-2016 04:14 PM
I'm a little confused about the Variety article and what it implies AMC has to do with unloading existing theaters in this deal. Are they saying AMC cannot take over existing Carmike locations in markets where AMC already has a presence, no matter how big or small the market may be?
Considering the size of both AMC and Carmike I figured the two chains would have had competing theaters in more than just 15 markets. Or is the DOJ looking specifically at places where AMC would have a market monopoly after the takeover? I guess I would need to see the list of theaters AMC plans to unload.
Either way there isn't a really simple answer for AMC over which theaters it should keep and which others should be sold to other rival chains (or just closed).
Carmike recently opened a new 12-plex in Tulsa, OK. It has a "Big D" premium screen. AMC has the Southroads 20 in Tulsa; that one has an IMAX-branded screen. There's plenty of competition in Tulsa from Cinemark, Warren and B&B.
Here in Lawton the merger would create a monopoly for AMC on 1st run screens. Is a 100,000 person market such as Lawton big enough for the DOJ to care about? AMC has the old Central Mall 12 theater originally opened by Dickinson Theaters in 2001. Carmike opened its new Patriot 13 theater a year ago, featuring one of the biggest "Lie-MAX" houses I've seen. Carmike has the 22 year old Carmike 8 here still running as a 2nd run/bargain theater. Its only competition is the old Vaska single screen theater, which is open only sporadically (I don't know how they're even staying in business).
Edit: I found an article at Deadline giving a list of the affected markets:
quote: Deadline
Communities where AMC will have to divest theaters include Montomery, Ala.; Destin and Miramar Beach, Fla.; Orange Park and Fleming Island, Fla.; Cumming, Ga.; Lithonia and Conyers, Ga.; Crestwood and Lansing, Ill.; Bloomington, Ill.; Peoria, Ill.; Grove Heights and Oakdale, Minn.; Mounds View, Minn.; Rockaway and Sparta, N.J.; Westfield, N.J.; Lawton, Okla.; Allentown, Penn.; and Madison, Wisc.
So, here in Lawton, it looks like the old Central Mall theater AMC acquired in the Starplex buy-out may be spun off to someone else, if they can even find a chain crazy enough to buy the location.
Considering the tiny size of the screens in relation to the high rent in an outdated 40 year old mall that theater is not a good deal by itself. It would have to be bundled in with other better theaters as part of a larger deal. I think there is a good chance that theater could simply shut down for good. Some of that depends on the terms of the lease with Central Mall. A rival chain could run it for a couple or so years just to get established in this market and then build a better standalone multiplex. But a rival chain sure isn't going to sign up to run a tiny 15-year old multiplex if they have to run it for 5 years or even 20.
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Jonathan M. Crist
Jedi Master Film Handler
Posts: 531
From: Hershey, PA, USA
Registered: Apr 2000
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posted 12-21-2016 12:40 AM
According to AMC's conference call they mostly plan to jettison Carmike locations. In the Pennsylvania Lehigh Valley that presents an interesting choice:
Lehigh Valley Choice
From the Allentown Morning Call
To complete its acquisition of Carmike Cinemas, AMC must get rid of one, possibly two theaters, in the Valley.
To complete its $1.2 billion acquisition of Carmike Cinemas, AMC Entertainment Holdings will divest some theaters in 15 markets across the country — including the Lehigh Valley — under a settlement reached with the U.S. Justice Department to satisfy antitrust concerns.
And according to the terms of the settlement announced Tuesday, AMC has an interesting choice to make in the Lehigh Valley.
Option No. 1 is to divest its theater at the Tilghman Square Shopping Center in South Whitehall Township [an AMC built recently remodeled 8 Plex from 1988], which now has plush recliner seating and a full-service bar, and keep the two local Carmike locations at the Promenade Shops at Saucon Valley [16 Plex former Rave] and on Catasauqua Road in Hanover Township, Lehigh County [a Carmike built 16 Plex].
Or AMC can go with Option No. 2, which is keep the AMC Tilghman 8 and sell the two Carmike theaters to a "buyer approved by the United States to eliminate the merger's likely harm."
An AMC spokesman did not respond to a call and email regarding whether the chain has made a choice on which Lehigh Valley option it will take. But on a conference call with analysts Tuesday afternoon, AMC President and CEO Adam Aron said most of the theaters AMC plans to divest will be Carmike theaters.
"The ... theaters are expected to be sold in the next 60 days," said Aron, who did not say whether AMC already has lined up a buyer.
Regardless of which option AMC chooses, the Lehigh Valley's movie-watching landscape is sure to be shaken up, with a new cast member likely joining the field next year and preventing what the Justice Department considered a potentially AMC-controlled market in the Allentown area.
But which theater — or theaters — will AMC decide to sell? And who would buy them?
To Richard Wolfe, owner of the Roxy Theatre in Northampton, AMC would be smart to keep the Promenade Shops theater, even if it means divesting its newly remodeled Tilghman 8 in South Whitehall.
"The Promenade is the top theater in the Lehigh Valley — by far," said Wolfe, who has owned 18 theaters over a 50-year career.
In addition, Wolfe noted, the Movie Tavern slated to open in Lower Macungie Township next year would be in direct competition with AMC Tilghman 8. The two sites are separated by just three miles.
Wolfe predicted two chains will be interested buyers.
Regal Entertainment Group could be interested in an Allentown-area location, he said. Regal operates megaplexes at the Northampton Crossings shopping center in Lower Nazareth Township as well as Quakertown and outside Phillipsburg.
The other potential buyer? Wolfe suggested Cinemark, which operates a theater at Stroud Mall in Monroe County, could be interested in becoming a player in the area.
For AMC, the Justice Department approval it received Tuesday was the final regulatory hurdle it needed to clear to complete its acquisition of Carmike. The deal was first announced in March and has drawn criticism from some politicians who have taken exception to AMC's owner, the Chinese Dalian Wanda Group, controlling the soon-to-be largest theater chain in the United States.
With final approval in hand, Aron said Tuesday he expects the acquisition of Carmike to close by year's end.
In addition to divesting theaters in 15 markets, AMC also is required to sell off most of its holdings and relinquish all of its governance rights in National CineMedia and transfer 24 theaters — including one in Allegheny County — with a total of 384 screens to the network of Screenvision.
Here are the divestiture choices from the approved settlement agreement:
Settlement Agreement With Divestiture Chart
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Scott Jentsch
Phenomenal Film Handler
Posts: 1061
From: New Berlin, WI, USA
Registered: Apr 2003
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posted 12-21-2016 10:07 AM
quote: Buck Wilson
It grosses me out when whole theaters just get talked about/thrown around like toys. If I were one of the theaters in question I'd be hoping for a little guy to buy me for sure.
Welcome to the fun reality of mergers and acquisitions. I survived quite a few, but eventually fell victim to the endless cycle of considering employees mere "headcount" to be tabulated in a spreadsheet.
And that's what it is. Assets and liabilities. Headcount. Expenses. Revenue efficiences. "Synergies" blah blah blah.
When you reduce everything to items on a spreadsheet, the actual people it affects doesn't come into it.
quote:
Communities where AMC will have to divest theaters include Montomery, Ala.; Destin and Miramar Beach, Fla.; Orange Park and Fleming Island, Fla.; Cumming, Ga.; Lithonia and Conyers, Ga.; Crestwood and Lansing, Ill.; Bloomington, Ill.; Peoria, Ill.; Grove Heights and Oakdale, Minn.; Mounds View, Minn.; Rockaway and Sparta, N.J.; Westfield, N.J.; Lawton, Okla.; Allentown, Penn.; and Madison, Wisc.
The last entry there caught my eye. There is an AMC in the Madison, Wisconsin area, but no Carmike at all. The next closest AMC location is 36 miles away, and the closest Carmike is more than 80 miles away in DeKalb, Illinois.
Update: I forgot that Carmike had purchased Sundance Cinemas. The Sundance Cinemas 608 Madison would be an easy location for AMC to toss to someone else. I could see someone like iPic or Landmark picking it up.
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