Film-Tech Forum ARCHIVE: Carmike Cinemas Announces Senior Management Changes

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Posted by Dustin Mitchell (Member # 372) on 01-20-2009, 06:44 PM:

Link

quote:
CARMIKE CINEMAS ANNOUNCES SENIOR MANAGEMENT CHANGES
Michael W. Patrick Departs Carmike
– S. David Passman, Carmike’s Lead Independent Director, Named Non-Executive Chairman
COLUMBUS, GA – January 20, 2009 – Carmike Cinemas, Inc. (NASDAQ: CKEC) announced today the departure of its chief executive officer and president, Michael W. Patrick, effective Monday, January 19, 2009. Mr. Patrick remains a member of Carmike’s board of directors.
The board of directors has appointed S. David Passman III, currently Carmike’s lead independent director, as the non-executive chairman of the board of directors. In addition, the board of directors has established an Office of the Chairman. The Office of the Chairman will focus on the strategic direction of Carmike and transition Carmike to new chief executive leadership. The Office of the Chairman will include Mr. Passman, as non-executive chairman of the board, Fred W. Van Noy, Carmike’s chief operating officer, and Richard B. Hare, Carmike’s chief financial officer.
“We thank Michael for his service to Carmike,” said Mr. Passman. “I am honored to have the opportunity to work closely with my fellow board members and Carmike’s senior management team as non-executive chairman to seek new opportunities to create shareholder value. I have confidence in our team at Carmike and believe the company is poised to take full advantage of the opportunity presented by digital cinema. We are optimistic about Carmike’s future.”
Mr. Passman, 56, has been a member of Carmike’s board since June 2003 and currently serves as a member of the audit, executive and compensation and nominating committees. Mr. Passman recently retired from his position as the president and chief executive officer of IBS-STL, Inc., a book publishing and distribution company, where he has served since June 2005.
Previously, Mr. Passman served as the president of the Harland Printed Products and Harland Checks divisions of John H. Harland Company, a provider of printed products and software and related services to the financial institution market, from 1999 to 2003. He served as Harland’s chief financial officer from 1996 to 1999. Mr. Passman is a former partner of Deloitte & Touche LLP where he served as the Managing Partner of the Atlanta office from 1993 to 1996.
About Carmike Cinemas
Carmike Cinemas, Inc. is a U.S. leader in digital cinema and 3-D cinema deployments and one of the nation’s largest motion picture exhibitors. As of September 30, 2008, Carmike had 250 theatres with 2,276 screens in 36 states. Carmike’s digital cinema footprint reaches 2,147 screens, of which 430 are also equipped with 3-D capability. Carmike’s focus for its theatre locations is small to mid-sized communities with populations of fewer than 100,000.

Posted by David Stambaugh (Member # 1102) on 01-20-2009, 10:05 PM:

So basically Mr. Passman's qualifications for running a movie theater company is he knows how to sell limitless paper products to a paperless world. That reminds me of when I worked for a multinational video game company and they hired a new CEO from Keebler Crackers.

Oh relax Passman, I'm just messin' with you. [beer]

Posted by Martin McCaffery (Member # 37) on 01-20-2009, 10:45 PM:

Wow, so the Mike in Carmike is jumping ship?? I smell a rotting corpse about to get eated.

Posted by Mike Blakesley (Member # 26) on 01-20-2009, 11:05 PM:

The new guy probably just offered to work for less money.

Posted by Dustin Mitchell (Member # 372) on 01-20-2009, 11:38 PM:

At the moment I know nothing beyond what is in the press release; and if I knew more I probably couldn't say anything anyway.

If you read the press release carefully you'll notice it doesn't say under what circumstances Mr. Patrick left. Mr. Passman is also not the new CEO; he is only in charge until a new CEO can be found.

As I said, I haven't gotten the inside scoop yet, just me reading the press release.

[ 01-21-2009, 09:31 AM: Message edited by: Dustin Mitchell ]

Posted by Louis Bornwasser (Member # 3063) on 01-21-2009, 07:39 AM:

'Bout time! Last bankrupcy, stock fell when it announced that he was staying on. Louis

Posted by Richard Fowler (Member # 893) on 01-21-2009, 08:16 AM:

So he is replaced by a man who previous experience is printing "checks" [Razz]

Posted by Scott D. Neff (Member # 185) on 01-22-2009, 12:32 PM:

Yeah, it reads to me like a polite firing. Perhaps he didn't want to sell the rest of the company to Mark Cuban. [Smile]

Posted by Tim Reed (Member # 137) on 01-22-2009, 02:55 PM:

It always amazes me how there are professional "executives", who do nothing but run corporations... regardless of whether they have experience or not in that company's business.

I don't think anyone has started as a janitor and moved up the ladder to be CEO of any company since David Sarnoff.

Posted by Jason Black (Member # 684) on 01-22-2009, 10:02 PM:

It's been no big surprise to several that Mike Patrick has pissed off several shareholders and BOD members with his actions and lack of regard for Corporate Operations over the last few years. I don't think he ever really accepted the fact that when the company went public, he relinquished control. Carmike needs a real overhaul of LOTS of Senior management before any huge turn arounds are noted.

Personally, I found his 'firing' poetic justice, to say the least. Perhaps they will secure someone who actually knows what true theatre operations are about to helm the BOD. For this role, one would have to really focus on the theatre experience as a POSITIVE one, not what is currently endured by patrons.

Posted by Dennis Benjamin (Member # 1137) on 01-22-2009, 11:22 PM:

Awww, this means no more Christmas Cards with his son standing next to a brand new Ferrari?

I'm disappointed that the Carl and Mike of Carmike are no longer with the company. Maybe the next step is changing the name of the company - since the Carmike name is associated with Quality Film Presentations. [puke]

Posted by Paul Van Dusen (Member # 3640) on 01-23-2009, 02:20 AM:

From what i've been told Mike is going to stay on and Chairman of the board, but has relinquished all of his CEO responsibility. I guess the fact of the matter is he still owns a lot of stock in the company and is as thus entitled to a spot on the board. I do know that there has been an open call to us theatre managers for suggestions on possible improvements to the operations side of the company. It's only been a few days and I already feel like corporate actually wants to hear my ideas. This seems to have changed the whole dynamic of the interaction between the operations department and senior management.

Posted by Bobby Henderson (Member # 840) on 01-23-2009, 09:44 AM:

Here's one idea: the company's senior management might want to try allowing the theaters to operate with more than an absolute minimal level of staff.

To me it seems like the company's main tool for increasing profit the past few years has been to carve all of it out of payroll numbers. At some point, that strategy backfires in the form of poor or absent customer service.

If the theater actually has enough employees in the building to move customers through the snack counter lines quickly and periodically check auditoriums for presentation problems or disruptions from the audience (and throw disruptive bastards out of the building) it would improve the customer's movie-going experience significantly. You would get more people coming back to the theater more often.

Carmike deserves at least some points for converting nearly all of its first run screens to digital cinema. The conversion may have been a bit of a visual downgrade for its best theaters, but overall it has been a big, positive improvement in most of its locations.

Unfortunately, Carmike still has many old theater locations, many of which it acquired when the company was strangely chasing after the idea of being the first company to have more than 5000 screens. They never reached that goal and instead wound up with lots of crappy little multiplex sites requiring lots of improvement but situated in little communities with not enough paying customers to properly support the theater.

And that gets to the worst factor facing Carmike: the company specializes at running theaters in cities and towns with under 100,000 people. Um, where's the money and enough paying movie-goers in that?

So many people are doing all of their movie watching at home that it's just going to get very difficult for most small towns to be able to continue operating movie theaters in the traditional sense. HDTV and Blu-ray will make that already bad situation dramatically worse.

A lot of small towns in which Carmike has locations don't have high income demographics and they're shedding population to bigger cities too. The shortened release windows for home video has ruined a lot of bargain/2nd run business. That makes it even more vital for a theater to succeed in the first run business, and you need a good customer base for that. There's just not enough of that in Carmike's traditional small town markets and that customer base is shrinking further.

Long term, I think Carmike will have to start competing directly with other theater companies in larger cities and consolidate its presence the bigger cities where it already operates, such as Raleigh, NC. They have to close down lots of little theaters with out-dated designs and build just a few really good, big theaters at "destination" sites.

Posted by Martin McCaffery (Member # 37) on 01-23-2009, 09:46 AM:

Maybe it is time for Carmike to return to its roots: Monopoly holdings in small towns. It is clearly getting its butt kicked everywhere else.

And just an odd thing here in Montgomery, they never update their yellow pages listings. The Eastdale Triple has been an 8plex for at least 10 years. The Carmike 8 has been closed for years, was run by a different chain for a few years and is now a church. The Wynnsong closed just over a year ago. Yet all of them are still listed in the yellow pages. Its a weird lack of attention to detail that seems to characterize Carmike.

Posted by Bobby Henderson (Member # 840) on 01-23-2009, 10:03 AM:

quote: Martin McCaffery
Maybe it is time for Carmike to return to its roots: Monopoly holdings in small towns. It is clearly getting its butt kicked everywhere else.

Carmike can't survive that way. Too much movie theater business is disappearing in the small towns. Hell, too many people are moving from small towns to bigger cities.

I contend Carmike hasn't faced anywhere near enough competition to get a proper strategy/philosophy in place. They have relied way too much on the monopoly presence in small towns to survive. In cities like Colorado Springs, they've lost a great deal of their business when new competitors (in this case, Cinemark) moved to town. Cinemark now has two locations in that market, one with an IMAX theater. Carmike didn't build any new theaters there to answer the challenge. They should have been doing just that and also have the balls to move into other big markets to challenge other companies. If they're not willing to go toe to toe against AMC, Cinemark, Regal, etc. that puts their long term survival in doubt.

Posted by Mike Blakesley (Member # 26) on 01-23-2009, 10:24 AM:

quote: Bobby Henderson
So many people are doing all of their movie watching at home that it's just going to get very difficult for most small towns to be able to continue operating movie theaters in the traditional sense.

Oh, baloney. I have a single screen in a town of less than 2000, and it is nicely profitable, thank you. I could give you the names of another dozen similar theatres in this state that are all doing good business. Our attendance in 2008, with the tanking economy and all, was almost exactly the same as in 2007 even though HDTVs are proliferating in this town just as fast as they are anywhere else. The key is having a clean facility, good customer service and good presentation, all areas where Carmike lacks severely (in many places at least -- definitely in Montana).

Their 10-screen Wynnsong in Billings has two concession counters, each with 3 or 4 stations. My wife and I have been there multiple times and have NEVER seen the second counter staffed. In fact, quite often they have one person manning the entire concession operation, with a line of grumbling patrons snaking back to the front doors.

Maybe you didn't notice that while movie attendance was indeed down a little in '08, virtually every other form of out-of-home entertainment had much larger declines.

[ 01-23-2009, 01:03 PM: Message edited by: Mike Blakesley ]

Posted by Bobby Henderson (Member # 840) on 01-23-2009, 01:49 PM:

quote: Mike Blakesley
Oh, baloney. I have a single screen in a town of less than 2000, and it is nicely profitable, thank you.

Exactly. It's a single screen theater. Not a typical major chain's multiplex with a much higher operating cost overhead. And you don't have the complication of corporate guys from another state telling you how to manage your theater.

How far away is Billings from Forsyth? 100 miles? How far away is the next movie theater? Or even a good quality video store? In sparsely populated areas some businesses benefit from having a somewhat captive audience. They'll spend a lot on fuel driving to a competing business.

Still, small towns are disadvantaged in that many from following generations leave for bigger towns and cities. That means small towns and even small cities are just going to keep shrinking. And that doesn't bode well for Carmike's long term outlook. Oklahoma has lots and lots of little towns. Many used to have movie theaters, but don't anymore. My grandparents and a few other relatives lived in Temple, OK and that place isn't even bringing in enough tax revenue to have any police department anymore.

quote: Mike Blakesley
Their 10-screen Wynnsong in Billings has two concession counters, each with 3 or 4 stations. My wife and I have been there multiple times and have NEVER seen the second counter staffed. In fact, quite often they have one person manning the entire concession operation, with a line of grumbling patrons snaking back to the front doors.

That only confirms the point I made in my last post on precisely where Carmike needs to improve: paying a little extra to staff a theater properly. It's typical bean counter business B.S. to make theaters run at minimal staff levels, even during peak times. They think they'll make more profit by running the theater with fewer people, but instead piss off their customers with poor service and watch their attendance levels decline.

Posted by Louis Bornwasser (Member # 3063) on 01-23-2009, 03:43 PM:

Any a-hole can reduce expenses to maximize profit. A showman understands how to make the pie larger and more profitable. Cuts always reduce service to customers; it is a declingin spiral. Louis

Posted by Mike Blakesley (Member # 26) on 01-23-2009, 03:51 PM:

quote: Bobby Henderson
How far away is Billings from Forsyth? 100 miles? How far away is the next movie theater? Or even a good quality video store? In sparsely populated areas some businesses benefit from having a somewhat captive audience.

Forsyth is exactly 100 miles from Billings, but our audience is hardly captive. People routinely drive to Billings (or Miles City, 45 miles away where there is also a single-screen theatre) to do their clothes shopping and so forth.

As for a video store, there is a good one about half a block from my theatre.

I'm sure you're right about the corporate bean-counter/overhead thing. Maybe the theatre of the future, in a town of 100,000 or less, is an independent one.

Posted by Phil Hill (Member # 371) on 01-23-2009, 03:59 PM:

quote: Louis Bornwasser
Any a-hole...

Mr. Bornwasser, I am TOTALLY shocked at your f*ckin' language... [Eek!]

Posted by Martin McCaffery (Member # 37) on 01-23-2009, 10:38 PM:

Carmike did try doing the big towns. They started that back in the late 80's when all of the other chains were going bankrupt and Carmike bought them up. Then they ran them just like the ran their small town theatres... and right into the ground, going backrupt themselves.

Meanwhile, here in Montgomery, where 20 years ago they owned everything in town (except us) Rave has come in and eaten their bones. Rave is doing the same thing to them in Birmingham, and I'm sure elsewhere. I expect the new business plan to be start closing down everything they can. or get merged.

Cinema-wise, Carmike is the used car salesmen of the business. Quality has never been their strong suit, and I don't see them trying to do things better.

Posted by Bobby Henderson (Member # 840) on 01-24-2009, 06:08 PM:

So I guess installing nearly 2200 D-cinema systems on all their first run screens doesn't qualify as being any effort to improve quality, right?

Honestly, Carmike could have just stuck with business as usual and not be thought of any differently. I'll also point out that lots of major theater chains are goofing up show presentations and quality of customer service. But I don't see much writing at all about them.

quote: Mike Blakesley
I'm sure you're right about the corporate bean-counter/overhead thing. Maybe the theatre of the future, in a town of 100,000 or less, is an independent one.

Heck, it might end up being true in much bigger cities. The best movie theater in the Oklahoma City area is the Warren Moore 14. Warren Theaters is not a major chain. It's an independent outfit with a trio of location in Wichita, KS and one in Moore. But its theaters clearly outclass nearly all the movie theaters of major circuits in the United States.

Posted by Mike Blakesley (Member # 26) on 01-24-2009, 08:13 PM:

quote: Bobby Henderson
So I guess installing nearly 2200 D-cinema systems on all their first run screens doesn't qualify as being any effort to improve quality, right?

I think it would be more accurate to say it was an effort to reduce overhead, make their projection more idiot-proof, and expand their slate of offerings to include alternative content. The improvement in quality was mostly due to lack of maintenance on the previous system, mixed in with a large number of don't-give-a-shit employees in some places, not all.

Posted by Aaron Mehocic (Member # 15) on 01-24-2009, 09:10 PM:

quote: Mike Blakesley
The improvement in quality was mostly due to lack of maintenance on the previous system, mixed in with a large number of don't-give-a-shit employees in some places, not all.

Recently I had the opportunity to work on some Century heads that came from a Carmike. Needed a dusk mask just to open the doors on them! So much grease was built up in the shutter housing it took almost a whole day to clean that. Amazing. [Roll Eyes]

Posted by Bobby Henderson (Member # 840) on 01-24-2009, 09:22 PM:

quote: Mike Blakesley
think it would be more accurate to say it was an effort to reduce overhead, make their projection more idiot-proof, and expand their slate of offerings to include alternative content.

I don't agree with that entirely -mainly since most Carmike locations have had their managers and assistant managers building up films, threading them, etc.

There's really little if any difference on reducing overhead, other than the idea the digital projection systems can be automated so the managers will free up some extra time so they can fill out even more paperwork and do other minutiae crap to keep the guys back in Columbus happy.

Idiot proofing the projection is a valid point. However, it should be mentioned that many of Carmike's locations had quite the smorgasbord of wildly varying equipment based on all those different theaters being bought over the years. A lot of that equipment was garbage. With everything converted to a single d-cinema system the maintenance and parts situation is greatly simplified. And that does result in movies being played without glitches more often.

Still, d-cinema isn't really idiot proof. It requires at least some computer literacy for a person to ingest a JPEG2000 movie into a Doremi server, set up the trailers and all that other stuff. I have to train people how to use similar looking software that controls LED-based jumbotrons and it's surprising to see how so many people lack simple file management understanding when it comes to using computers.

I think nearly all major movie theater chains are doing an overall crappy job -not just Carmike alone. But it seems like Carmike is always the one being singled out when we talk about the negative points with theater chains.

Some of the flames need to get put under the backsides of other circuits. Take Cinemark for instance. I swear, the only decent presentation I ever see at a Cinemark theater anymore is if its in an IMAX theater. If it's in a standard auditorium forget about it. I've been sorely disappointed way too many times already to put up with it anymore. AMC? Same freaking thing. I could go on and on. What happens at Carmike is not unique. The same crap is taking place industry wide.

Much of the movie theater industry has its head firmly up its butt and stuck there by its chin. They think they can just keep doing the same corner cutting and not addressing any of the issues of presentation quality or audience disturbances. They figure everyone will just keep coming regardless. And that's a risky, yet typical American business attitude. Honestly, they should be questioning everything.

Theater companies should be questioning what impact the change to HDTV and growing popularity of Blu-ray will have on their business -instead of just blowing it off as being no threat to their attendance levels.

I know my attendance at theaters has dropped off significantly over the last couple years, especially after buying my HDTV and PS3. And I have access to a couple of really well run and well equipped movie theaters. It's pretty easy to just stay home and watch the movie on a big HDTV, especially if there's only a 3-4 month wait for the Blu-ray.

Posted by Martin McCaffery (Member # 37) on 01-25-2009, 01:30 PM:

quote: Bobby Henderson
I think nearly all major movie theater chains are doing an overall crappy job -not just Carmike alone. But it seems like Carmike is always the one being singled out when we talk about the negative points with theater chains.

Can't disagree with you there. I just have 24 years of experience with Carmike here in Montgomery. I would venture to guess that the arrogance they had when their business plan was monopoly presence in small towns (which was enunciated in their original stock prospectus) continued over after that plan was abandoned.

I worked in DC as a relief projectionist for about 10 years before that (and 6 months in LA), so I saw the good theatres and the bad. I have never experienced anything consistently bad as Carmike. Remember, 24 years ago, they were exclusively Southern and the South has long had a horrible reputation for movies. Carmike certainly promoted that reputation. Maybe they've even gotten the rest of the country to go along

When Rave came in Carmike did nothing to improve their service or presentation, and got their clocks cleaned (the only things cleaned in their theatres;>). Rave is movies done mediocre, but beat the hell out of what Carmike did here.

As for converting to digital, replacing bad film with fair digital may be an improvement, but not significant once they let things start running down, as they always do.

And just out of curiosity, is it true Carmike keeps one 35mm screen in every theatre?

Posted by Mike Blakesley (Member # 26) on 01-25-2009, 01:49 PM:

quote: Bobby Henderson
Still, d-cinema isn't really idiot proof.

I never said it was. I said it was MORE idiot proof. I would dare say a film system has many more ways for "something to go wrong" and the results be seen during the performance...but with a digital system, once the show is running it should run perfectly, providing the machinery is all working. (NOTE: I say this having never touched a digital system, so my mileage may vary.)

Posted by Bobby Henderson (Member # 840) on 01-25-2009, 03:01 PM:

quote: Martin McCaffery
And just out of curiosity, is it true Carmike keeps one 35mm screen in every theatre?

Yeah, they usually keep at least one 35mm projector available in their smallest sites. The Carmike 8 here in Lawton has two 35mm systems still in operation, although they sit dormant much of the time.

Posted by Mike Blakesley (Member # 26) on 01-25-2009, 08:47 PM:

I'm sure the Wynnsong in Billings has one 35mm house; I remember they played "Wild Hogs" in 35mm for several weeks after the DLP conversion and never did play it in digital - and they played last summer's Indiana Jones movie in 35mm on one screen as well.

Posted by Evans A Criswell (Member # 381) on 01-27-2009, 02:31 PM:

Martin, it's good to see an Alabama guy posting here (and it's funny that your name is Martin and work for Carmike since many older Carmikes used to be Martin locations).

Here in Huntsville, Carmike previously had an old 1977 Consolidated location (University 6, very similar to Cinema North and South locations in Nashville, with auditoriums built in "pods" off the lobby area). I saw two movies at that location when it was still a first-run theatre and it didn't seem like a nice place in the early 90s. It seemed neglected at the time and it eventually closed after spending a couple of years as a second-run theatre after Cobb opened their Hollywood 16.

Carmike came along with their wonderful Carmike 10 on March 5, 1998 and it was the nicest theatre in town for a while, being the only theatre with adjustable masking on every screen, able to show both flat and scope properly in every auditorium, a first for Huntsville since 1982. They were also the first theatre with digital sound for every screen and the first with stadium seating. There were tons of reasons to go to that theatre, and I always hoped that the movie I wanted to see was playing there.

In contrast, in nearby Decatur, they have an old Fairlane/Litchfield location that opened in 1982 that they took over and expanded in 1992 (they also had the similar old Litchfield locations: Plaza Cinemas in Anniston and Hickory Hills 6 in Florence). When they ran 35mm, it was poorly maintained, with dim, unevenly lit images. I haven't visitied it since the digital switch, so I'm sure it's better now.

After the Rave Valley Bend 18 came along and the Monaco 14, Carmike soon cut their shows at Carmike 10 down to one per night except Friday and Saturday, and I've been told that it's not as well-kept as it once was.

Carmike's main failure is in maintenance of locations once they get a few years old. When something breaks, it's often not fixed as it should be, and over time, it shows. Things are only fixed when so severe that it causes lost shows. Otherwise, things like a digital sound system not working and playing in horribly calibrated analog, broken screen masking, improperly aimed projectors, unevenly lit images due to bad "bulb focus" become the norm rather than the exception. The Decatur location used to have these problems frequently. Just one look at Carmike 10's sign shows a lack of care. The top portion of the sign has been unable to hold letters for announcing the movies being played at the location. they've been broken for years and years. All the movie titles are crammed into the lower part of the sign.

I hope the upper management changes will turn Carmike around.

Posted by Bobby Henderson (Member # 840) on 01-27-2009, 03:49 PM:

quote: Evans A Criswell
I hope the upper management changes will turn Carmike around.

Carmike needs positive changes in management at both the upper, corporate office levels and down in the trenches at the individual theater level.

The Carmike 8 here in Lawton opened at the end of 1994 and is still in good shape. The credit for much of that goes the manager who has worked there since opening day. It doesn't matter what movie chain controls a given theater, a lot of the success of a movie theater is determined by the staff working there under that roof.

Posted by Martin McCaffery (Member # 37) on 01-27-2009, 05:15 PM:

quote: Evans A Criswell
Martin, it's good to see an Alabama guy posting here (and it's funny that your name is Martin and work for Carmike since many older Carmikes used to be Martin locations).

Oh wait, no, no. I do not and have never worked for Carmike. My experience with them is as a (rare now) customer. That and several of my projectionists over the years have escaped from Carmike.

I run the Capri, Montgomery's only independent theatre.

Posted by Evans A Criswell (Member # 381) on 01-29-2009, 09:06 PM:

Oh, sorry about that, Martin. I read "I just have 24 years of experience with Carmike here in Montgomery" the wrong way. I hadn't been on film-tech in a bit and was catching up on a good many threads and didn't read all of the history as thoroughly as I should have.

I agree that the individual theatre managers are as important as the upper-level management, but back during 1998-2000, I got the strong impression from several Carmike managers that they wanted to improve the presentation and cosmetic condition of their theatres, but they could only do so much. One manager said (speaking of upper-level management) "They pretend we don't exist." ("we" referring to that particular theatre). That particular theatre had 10 managers in a 5-6 year period, while another Carmike location had 5 in that same period. In contrast, the Regal theatres had the same managers with no changes during that entire time. The managers were constantly being moved around from city to city.