Film-Tech Forum ARCHIVE: Finding Investors

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Posted by Brandon Henry (Member # 4161) on 07-09-2007, 04:14 PM:

I am currently working at a 7 screen and a partnering 10 screen that have gone up for sale. I know they are desperate to get rid of these and could be had for a relatively cheap price.

I am wondering if anyone knows how to get in touch with or find investors. I will have to put my stake in operating equity. Any help would be appreciated.

Also what is everyone's feeling on the smaller independent cinemas surviving these days? The 7 screen is in a smaller town with no big name chains for 50 miles or more. The 10 screens is close to one 16 screen, but has been supporting itself the last few years.

Posted by Mike Blakesley (Member # 26) on 07-09-2007, 04:36 PM:

Why are they selling? And why can it be had for a cheap price?

To me, the answers to those two questions would be key to going ahead or not.

Posted by Brandon Henry (Member # 4161) on 07-10-2007, 07:49 AM:

They are selling due to the fact that the managing investor has decided to move and pursue other business interests. None of the other investors want to be actively involved in the operation.

It can be had for a cheaper than list price because quite simply they just want out. They tried peddling it to the chains in the area and it was passed on by everyone. To this point I don't know of anyone who has even been interested and it has been on the market for over 6 months.

These theaters have been set up as two separate corporations and this too has caused issues. The ten screen more than supports itself, but under the current setup can't help out the 7 screen theater when that one is struggling during the slow times of the year. In talking with some knowledgeable people if both theaters were to be run under one group then it would make it much easier to have a succesfull business.

Posted by Andy Bergstrom (Member # 360) on 07-10-2007, 11:30 AM:

Where are these theatres located? Is it a metropolitan or rural area?

Thanks

Posted by Brandon Henry (Member # 4161) on 07-10-2007, 12:30 PM:

One would be considered metro and the other rural.

Posted by Mitchell Dvoskin (Member # 751) on 07-10-2007, 01:03 PM:

Either a location is profitable or it is not. If it is not, you don't want it unless you have a plan to make it profitable. Supporting it from the profits from another location is not a good idea in the long term.

The reason the theaters are set up as separate corporations is so that if one location becomes extremely unprofitable, they can cut it loose and fold the company without risking the other location. This is a common practice with independent theatres.

There are a lot of expenses in running a theatre that are not always obvious to a theatre manager. You need to see the complete books listing all expenses before you can make an informed decision as too whether you can make a profit.

Also, when looking for investors, remember the golden rule: He Who Has The Gold Makes The Rules. You do not want to get into a situation where you are the managing partner but can't make any decisions without the approval of the investors. You will end up the equivalent of working for them with little reward for yourself.

Posted by Brandon Henry (Member # 4161) on 07-10-2007, 01:43 PM:

In this particular case the decision to do separate corporations was based on the fact that there was a small core of investors overlapped each theater and then there was a another group that differed from each theater.

I really think that the one theater that currently is underperforming can be turned around with some hard work and attention to detail.

I am trying to find a way to come up with some seed money of my own, but just don't know where that is going to come from yet.

Posted by Charles Wierdsma (Member # 4260) on 07-11-2007, 12:07 AM:

Hey over there in minnesoota.
Are you asking about the small/independent theaters because you are thinking about a business plan for one? My first recommendation is that if there is any way you can buy their existing gear(maybe theyll give), think ahead and do it. Maybe you can use it in your potential place (or sell it on film-tech!)
Are you looking for investment to operate the existing 7 or 10 or open your own independent in the area?
I dont know the simple answer to the investment puzzle, but maybe you can see how the current owners feel about you taking an active role in marketing the opportunity. You may have success pulling interest from arts groups in Minneapolis, or even craigslist of all places. Either way you still have a job there and maybe a better one!
I am interested in what happens if you can put it back up here.

Posted by Brandon Henry (Member # 4161) on 07-11-2007, 01:33 PM:

I would be interested in purchasing these two theaters and am looking into how to locate possible investors.

The question about the independents was just a query on my part to see if people still think it is viable to run this way or whether the corporate world has claimed another victim.

I of course am in the very premliminary stages and will not move forward with out a very good look at the books.

Posted by Andy Bergstrom (Member # 360) on 07-11-2007, 01:52 PM:

Is one of these theatres a former United Artists location? I'm assuming the 10-plex is metro and the 7-plex is rural?

Thanks,
Andy

Posted by Mike Blakesley (Member # 26) on 07-11-2007, 11:18 PM:

quote: Brandon Henry
The question about the independents was just a query on my part to see if people still think it is viable to run this way

Viable? Sure. There are thousands of indies around the country doing just fine, including the one I'm sitting in which is 76 years old. There are about 50 independent locations just in Montana.

I would say the three main rules for being an independent theatre owner are:

1. Don't expect to get rich

2. Run it yourself - don't farm it out to kids (and get yourself a second job if necessary)

3. Make your theatre as nice as you possibly can (that includes the best presentation you can possibly afford), even if it means going without that new car or whatever, and it will pay you back.

Posted by Mike Spaeth (Member # 524) on 07-11-2007, 11:35 PM:

That's the eternal question...

Posted by Ramin Hashemi (Member # 2694) on 08-27-2007, 04:56 PM:

Small independents can be very profitable. The factors, as mentioned, include competition, film selection and presentation, price, customer service, ...

Competition include ALL other venues for spending discretionary funds.

We have a first run triplex that does very well. The previous owners tried running it as a sub-run but failed. We simply switched to first run, significantly increased product quality, improved customer service, .. and oh yes, increased prices to match the increase in quality. It worked great, and still is.

Posted by Kevin Raisler (Member # 1761) on 09-09-2007, 08:09 PM:

I would think owning a theater in this present day technology-ever a-changing world would be a scary nerve racking experience.

Posted by Robert E. Allen (Member # 1351) on 09-10-2007, 01:02 AM:

Concentrate your efforts on providing the type of entertainment your audience wants. Survey the community and don't be pressured either by the distributors or their advertising into playing what everybody else is playing. If you can afford the latest technology then install it. If not it's the type of entertainment your people want that's really important. A lousy picture presented in a digital format with digital surround sound is still a lousy picture.

Posted by Joel N. Weber II (Member # 3530) on 09-10-2007, 09:14 AM:

Are there independent theaters currently using digital projection who are finding it more profitable than 35mm film projection would have been?