Film-Tech Forum ARCHIVE: Regal to buy up National Amusements?

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Posted by Michael McGovern (Member # 4807) on 12-05-2008, 09:47 PM:

Regal sees Natl Amusements as tough sell

By Jui Chakravorty Das and Sue Zeidler NEW YORK, Dec 3 (Reuters) - Regal Entertainment Group (RGC.N: Quote, Profile, Research, Stock Buzz) would look at the assets of rival movie theater chain National Amusements Inc if Sumner Redstone put them up for sale, but tight credit markets could make it a tough sell, Regal's chief executive said on Wednesday.

Analysts and media reports have said that Redstone, who is chairman of National Amusements, may consider selling its 1,500-screen cinema chain to raise money to meet debt obligations.

"Certainly, their domestic assets are complementary and contiguous to markets that we already operate in, so from a geographic standpoint I think there's certainly a fit there," Regal CEO Mike Campbell told the Reuters Media Summit.

While Regal, the largest U.S. cinema chain with more than 6,700 screens, looks at every asset that goes up for sale, Campbell noted that limited access to credit in current markets would make any acquisition difficult, even though company valuations are attractively low.

"The same lending markets that may be creating the opportunities creates a barrier for potential acquirers, whether it's National Amusements or anybody else out there today," Campbell said.

"There would have to be some affordable financing in the market out there and that just isn't happening today," he said.

Redstone this week sold his stake in video game company Midway Games Inc (MWY.N: Quote, Profile, Research, Stock Buzz) as pressure mounts on the media mogul to bolster the finances of National Amusements, his main investment vehicle. National Amusements also owns stakes in media companies Viacom Inc (VIAb.N: Quote, Profile, Research, Stock Buzz) and CBS Corp (CBS.N: Quote, Profile, Research, Stock Buzz).

Analysts have valued the National Amusements movie chain at about $500 million to $700 million. But for a company seeking to refinance $800 million in bank loans that are due in December, possible buyers will likely low-ball their offers, considering the process a fire sale.

Some media reports have also said that Redstone considers the value of the chain to be about $1 billion, including the property on which the theaters are built.

Asked about National Amusements on a Nov. 10 conference call, another competitor, Cinemark Holdings Inc (CNK.N: Quote, Profile, Research, Stock Buzz), said it has the ability and would consider takeovers based on price and the quality of theaters that become available.

"There potentially are acquisition opportunities out there, and we'll just have to weed through those as the time -- as they present themselves," Cinemark Chief Executive Alan Stock Stock said on the call.

Campbell said Regal would have to access the credit markets for a deal of National Amusements' size. Even if a company did have the cash, it might be prudent to hold on to it amid the weak economy and uncertain markets, he said.

While downtrodden stock prices do make assets attractive, frozen credit markets would likely hamper industry consolidation

"I can't imagine there would be a bidding war. The bigger challenge would be finding buyers, period," Campbell said.

Regal last spring acquired Consolidated Theaters, a Charlotte, North Carolina-based regional chain that operates 28 theaters with 400 screens for about $210 million. Regal had outstanding debt of $2 billion at the end of the third quarter.

Standard & Poor's placed Regal on a negative credit watch last week because of debt accumulated in past acquisitions.

"In this particular climate, I think it's just tougher to rationalize any deal today," Campbell said.

If this deal were to occur, it would be quite the coups for Regal. They've had a tough time breaking into the Northeast, and were never able to make a huge dent when they took over the Hoyts theaters, since National Amusements has such a tight grip on the region. I however don't see this happening for a number of reasons. NA owns all their own buildings and properties, and Regal generally doesn't deal with real estate. Also, although National Amusements does have some very nice theaters in the Connecticut and Massachusetts area, they also have a lot of dumps that have been operating for 15+ years now and aren't exactly in the best of shape. I could maybe see Regal cherry picking a couple of National Amusements nicer locations, and maybe a few strategic ones that eat into the attendance of REG buildings so they can shut them down, but I don't think it would really make any sense for them to buy the company.

Posted by Mark Gulbrandsen (Member # 72) on 12-06-2008, 04:03 AM:

quote: Michael McGovern
Regal had outstanding debt of $2 billion at the end of the third quarter.

Holy Christ!

Posted by Shane Cooper (Member # 2510) on 12-06-2008, 08:40 AM:

Maybe they should look into credit counseling!

Posted by Steve Guttag (Member # 268) on 12-06-2008, 11:54 AM:

No, no...they should "drive" down to DC and go to congress...they are handing out billions and billions! Get your Billions today!

Posted by Monte L Fullmer (Member # 2797) on 12-06-2008, 01:04 PM:

..from an earlier post in which they should concentrate getting this paid down..

quote:
Regal has a mountain of debt, close to $2 billion. While it's not coming due until 2011--

And if Int Amuse have dying shoebox houses, those will definitely put the hurt on REG.

Posted by Claude S. Ayakawa (Member # 1401) on 12-06-2008, 03:32 PM:

Regal seem to have a lot of faith in the motion picture exhibition business. Just in Hawaii alone, the company's plan includes the opening of a brand new all digital multiplex at Kapolei in late 2009 and the conversation of one of their largest theatre at their Dole Cannery 18 to show 2-D and 3-D Digital IMAX movies as I had announced yesterday on another thread.

-Claude

Posted by Kelly Skaggs (Member # 1780) on 12-09-2008, 03:54 PM:

I have heard that NA may break up and sale off a portion of the company as a whole or maybe piece by piece. All the district position have been eliminated from my understanding.

They have replaced a fair amount of the old shotgun houses with Cinema Deluxes or new Stadium Showcases in the Greater Cincinnati area. I heard Cinemark mentioned as a interested party.

I guess time will tell.

Posted by Caleb Johnstone-Cowan (Member # 3710) on 12-09-2008, 07:09 PM:

Would Regal also buy the NA theatres operating outside the USA? Showcase have been expanding the Cinema De Luxe brand in the UK recently.

Posted by John Hawkinson (Member # 1135) on 12-09-2008, 07:26 PM:

My understanding is that Redstone's Viacom holdings are actually held by National Amusements, which is held by Redstone. So NA is in the dual position of being both a movie chain as well as a holding company Redstone's shares of Viacom/CBS.

As a result, you'll see weird things happening with dividing things up and breakups and soforth. Because there's basically no chance that someone buying the chain would be buying Redstone's controlling interest in Viacom/CBS.

--jhawk

Posted by Dennis Benjamin (Member # 1137) on 12-10-2008, 09:27 AM:

I used to work for Mr. Redstone. While he isn't that nice of a guy, he is a brilliant businessman.

When I worked for him, I did not get paid very much. But I do miss working there sometimes. Some of my fondest theatre memories are of when I worked In Cincinnati at Showcase.

Some of the nicest people I know work (and worked) for National Amusements.

From a customer perspective it was (and maybe still is) a First Class Entertainment company.

With these harsh economic times and hearing that they may sell off some (or all) of the company - that day will be a sad day in the theatre industry. For Sure.

[Frown]

Posted by Michael McGovern (Member # 4807) on 12-11-2008, 09:27 PM:

quote: Caleb Johnstone-Cowan
Would Regal also buy the NA theatres operating outside the USA? Showcase have been expanding the Cinema De Luxe brand in the UK recently.

Regal has zero interest in operating internationally. They have enough problems now with their American operations to worry about.

My guess of what will come of this mess is that Regal will the first picks of all the top grossing locations (Mostly the Cinema Deluxe places) they want and will convert them over to REG theaters, along with the ones they want to close that impact REG locations. Whatever is left after that will be divvied up by Cinemark who will probably buy whatever they can get in the markets they operate in, and maybe a smaller company like Bow Tie who would likely have interest in the CT and NY locations Regal doesn't want.

Posted by Kelly Skaggs (Member # 1780) on 12-12-2008, 09:36 AM:

I now hear they may look to keep some of the East Coast location, the ones they have in Europe and the Bridge in LA.

Posted by Michael McGovern (Member # 4807) on 02-19-2009, 11:53 AM:

http://uk.reuters.com/article/technology-media-telco-SP/idUKN1846777620090218

Looks like they've finally gotten around to unloading most of their theatres. I imagine that Cinemark will pick up most, if not all of these theatres, as Regal can't even finance the Real-D projectors they want for their locations, let alone buy out another company.

Posted by Jeff Lacey (Member # 3217) on 12-18-2009, 06:23 AM:

Rumors abound, but it sounds like Rave is purchasing 35 of NA's locations.

There are a number of sites on the web that are spreading the rumor, but of course no official announcement has been made yet...

But if you can believe wikipedia , its on there as well...

quote:
National Amusements has sold 35 theaters to Rave Motion Pictures. The locations included in the sale are:

The Bridge 18 - Los Angeles, CA

Showcase Buckland Hills 16 - Manchester, CT

Cinema De Lux Connecticut Post 14 - Milford, CT

Showcase North Haven 12 - North Haven, CT

Enfield 12 - Enfield, CT

Showcase Berlin 12 - Kensington, CT

Showcase Southington 12 - Southington, CT

Showcase Davenport 53 18 - Davenport, IA

Cinema De Lux Stonybrook 20 + IMAX - Louisville, KY

Cinema De Lux Preston Crossings 16 - Okolona, KY

Cinema De Lux Florence 14 - Florence, KY

Showcase West Springfield 15 - West Springfield, MA

Showcase Eastfield Mall 16 - Springfield, MA

Showcase Ann Arbor 20 - Ypsilanti, MI

Showcase Flint West 14 - Flint, MI

Showcase at the Ritz Center 16 - Voorhees, NJ

Multiplex Hazlett 12 - Hazlett, NJ

Cinema De Lux Franklin Park 16 - Toledo, OH

Cinema De Lux The Greene 14 - Beavercreek, OH

Showcase Milford 16 - Milford, OH

Cinema De Lux Springdale 18 - Springdale, OH

Showcase Dayton South 16 - West Carrollton, OH

Cinema De Lux Maumee 18 - Maumee, OH

Showcase Huber Heights 16 - Huber Heights, OH

Showcase Western Hills 14 - Cincinnati, OH

Showcase Levis Commons 12 - Perrysburg, OH

Showcase Kings Island 12 - Mason, OH

Showcase Fallen Timbers 14 - Maumee, OH

Showcase Cincinnati Mills 10 - Cincinnati, OH

The Bridge 6 - Philadelphia, PA

Showcase Pittsburgh North 11 - Pittsburgh, PA

Showcase Pittsburgh West 12 - Pittsburgh, PA

Cinema De Lux Fairfax Corner 14 - Fairfax, VA

Multiplex Centreville 12 - Centreville, VA

Multiplex Reston 13 - Reston, VA

This change will go into effect January 10th according to management in Toledo, OH.

Posted by Caleb Johnstone-Cowan (Member # 3710) on 12-18-2009, 07:35 PM:

Showcase sold their unbuilt Cinema De Lux Westfield London site and Showcase Wood Green (also in London) to my former company vue. My guess is NA will dispose of some more sites in the UK. However it would be nuts to lose a cinema like Showcase Bluewater which is one of the highest-grossing in the country.

Posted by John T. Hendrickson, Jr (Member # 849) on 12-21-2009, 11:20 AM:

Always looked at National Amusements as a class outfit. The Multiplex Hazlet 12 NJ is an older location, but has been kept up nicely. I was at the Fairfax 14 in Va recently, and that is also another well run location.

If Rave bought these locations, then they are going to have to change the information found on their website. Hazlet does not have stadium seating and only one digital screen. Fairfax is also running 35MM.

Wonder what their plans are for these and other locations they have acquired?

Posted by David Zylstra (Member # 4230) on 12-21-2009, 12:07 PM:

We noticed here in Michigan that Rentrak now lists the Showcase Ann Arbor as a Rave location.

Posted by Sean McKinnon (Member # 612) on 12-21-2009, 03:52 PM:

This is a shame. Even though I was dissapointed with the way I was treated by N. A. after interviewing 3 times with them and then never hearing from them even to say thank you but no thank you I still feel they put on a first class show as far as corporate multi=plex theatres go. When I serviced N.A. theatres they always put in a top of the line package, great sound systems, and used a first class equipment dealer (Louis... [Smile]

)

That brings up another good thing about them they are (were?) loyal to the companies they did business with. They did not play games with going with a low bidder here and there or switiching companies every six months they did business the right way. IMO.

Posted by Dennis Benjamin (Member # 1137) on 12-21-2009, 04:05 PM:

Well.

I was lucky enough to experience working for what was once a great company - National Amusements. Most of the PROPER booth training I received was with that company. I am still friends with people that I worked with back in 1995 in Cincinnati.

Most of the managers I worked with had been with the company for MANY years. They did, indeed, run a 1st class operation. My ONLY gripe was that they only popped their corn once a week. I could never get used to that.

As a customer - it was always the best show in town.

R.I.P.

Posted by Scott D. Neff (Member # 185) on 12-24-2009, 04:17 AM:

I've noticed that in Rave's press release it states that Charles B. Moss Jr. (of Bow-Tie Cinemas) is involved with the newly formed company "Rave Cinemas LLC". Any guesses as to how this will play out? National Amusements in the Northeast to spin off to Bow Tie and the rest to Rave?

Posted by John Joseph Fink (Member # 3619) on 12-24-2009, 07:27 AM:

I was thinking Rave and Bow Tie might combine operations at some point - perhaps turning the sites into either Rave Cinemas or Criterion Cinemas, keeping Criterion as a boutique label. National Amusements were heavily branded "Cinema De Lux" "Bridge: Cinema De Lux" "Level Level" "Director's Hall" "Showcase Cinemas" "Multiplex Cinemas", ect. Rave will have to adapt or (as AMC probably would have done) drop the special features that National had, I hear the Director's Halls are pretty successful so why sacrifice that extra $3 a ticket.

Criterion could become that pointless label that big chains throw on anything remotely more mature than mainstream product - AMC Select, Regal Cinearts, ect. Now that Rave has acquired Showcase at Ritz Center, a theater opened by Ritz Theaters as an art theater, with an audience already hostel towards National for cutting back the art pictures, it should be interesting to see if Rave turns the place into a full on mainstream multiplex or keeps the art house illusion up.

Posted by Paul J. Neuhaus (Member # 3205) on 01-28-2010, 01:14 PM:

quote: Dennis Benjamin
My ONLY gripe was that they only popped their corn once a week. I could never get used to that.

Why would you do that? Is that company wide?

Posted by Tony Ratcliff (Member # 1196) on 01-28-2010, 05:15 PM:

When I worked for NA is the 80s the popcorn was popped usually once a week in slow times, twice in the busy seasons.

But the thing is - it never tasted like it.
It was still much better tasting than the Loews cinema that appeared to pop daily!
I doubt they can do that today.
The quality of the corn is not as good,
and I doubt they still use 100% coconut oil like back then.

I've still never heard better sound in a theatre than at a Showcase, hands down.
I only DREAM that my sound was that good.

Posted by Sean McKinnon (Member # 612) on 01-28-2010, 05:18 PM:

I can only speak for Loews when they were around and the fact is that at the busy 20 or so screen complexes with the ability to do 10-15,000+ people with 15 stations at a main concession stand, and 2 or more satellite concession stands with up to 4 stations each and only 2 poppers in the kitchen it is impossible to keep up with the demand by popping fresh. It is a neccesity to pop and bag corn on the slower days to use during the busy days. However, we are talking maybe using popcorn today that was popped yesterday not a week ago.

Posted by Scott Norwood (Member # 30) on 01-28-2010, 09:36 PM:

General Cinema did the pop-once-per-week thing too. I never understood why. They did not seem to believe in popping the corn in front of the customers, since the popcorn machine(s) usually lived out of sight of the concession stand (often on the second floor or in a back room.).

Posted by Martin McCaffery (Member # 37) on 01-29-2010, 08:52 AM:

When I first started as an usher back in 1974, the theatre I worked in didn't have a popcorn popping machine. We would buy prebagged corn in bulk and store it upstairs in the break room.
Not only was it a convenient mating place for horny ushers and usherettes, do to the usual staff turnover rates, there were times when the popcorn was there longer than most of the employees;>

Posted by Sean McKinnon (Member # 612) on 01-29-2010, 11:06 AM:

I have heard that popcorn a day old is better than fresh out of the popper because when the popcorn comes out of the popper it is chewy but after sitting for a day it becomes crunchy. I dunno just something I heard but I have had people complain about stale chewy popcorn when it was fresh from the machine [Confused]

Posted by Robert E. Allen (Member # 1351) on 01-29-2010, 03:17 PM:

That's true Sean. At least it is with the corn I pop at home. If you seal it so the air doesn't get to it it does crisp up. Back in the day when I worked for Fox West Coast Theatres none of the theatres popped their corn. It was popped in L.A. and sent out in huge sealed paper bags then put in a warmer at the local locations.

I'm not sure why but I have a feeling Regal is going to implode one of these days. Probably either because they can't run an operation that big or Uncle Sam will jump on them because of the monoply thing.

Posted by Tony Ratcliff (Member # 1196) on 01-29-2010, 04:55 PM:

It is true about popcorn fresh out of the popper - it is a little chewy. It needs to sit a few minutes to be "just right".

I've never been behind-the-scenes of a modern google-plex,
so I'm curious how they keep up with the popcorn demand on a busy night.

Posted by Mike Blakesley (Member # 26) on 01-29-2010, 06:25 PM:

Places that do behind-the-scenes popping are missing out on one of the best "promotional" aspects of popcorn, not to mention the wonderful aroma in the lobby. I don't even like to eat popcorn but I love the smell of it popping. When you walk into a movie theater it ought to smell like popcorn, not floor wax.

Posted by Sean McKinnon (Member # 612) on 01-29-2010, 07:22 PM:

At one 20 screen I manages we had two poppers in the "kitchen" which was in the middle of the main stand. We would pre-pop, and pop continuous all day/night into large yellow bags. We had carts to transport 10 or so large yellow bags at a time to the satellite stands. At the main stand usually one of the "Service Supervisors" would be constantly refilling all 13 popcorn bins [Eek!]

This was a busy suburban theatre that catered to a lot of families. We sold a LOT of popcorn.

One time we had one of our poppers go down so I had to rent a U-Haul Van and drive to a 12 plex the company had about 20 miles away pop until I filled the van then deliver it to the 20 screen then go back and fill it again... All night! [thumbsup]

Posted by Tony Ratcliff (Member # 1196) on 02-02-2010, 07:50 PM:

You're right Mike.

The smell and SOUND of popcorn popping is the best advertising.

It's like fresh bread baking at a bakery.
You can't resist it.

Posted by Caleb Johnstone-Cowan (Member # 3710) on 02-03-2010, 07:59 PM:

If you have a popper you should be making a small batch every walk-in or busy period to make the foyer and corridors smell nice. Real arse to clean though!