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AMC could be next in Toronto’s movie theatre shakeup

ANDREW WALLACE/TORONTO STAR

The AMC theatre in Yonge Dundas Square.

May 09, 2012

Downtown movie connoisseurs are in mourning for the Cumberland Theatre, which abruptly closed on Sunday. But that is just step one in what could be a major shakeup in the lineup of Toronto’s high-rolling movie business.

Think of it as a board game for showbiz addicts.

Coming soon, as reported in the Star last week, is the sale of Alliance Films, for many years the dominant player among Canadian distributors. (Insiders expect Alliance to be bought by its chief rival, Entertainment One.)

I predict the next startling change will be the sale of AMC’s eight Canadian movie palaces with 184 screens, including six in or near Toronto.

No deal has been announced and my calls to the company’s head office in Kansas City, Mo., were not returned. But for months there has been buzz that AMC — the second largest cinema chain in the United States — faces financial challenges and needs to unload its Canadian arm.

On Tuesday, the Los Angeles Times reported that the Wanda group, which owns the largest cinema chain in China, is negotiating to buy all or part of the AMC empire. Unloading its Canadian holdings could help make the company a better buy.

Who are the likely buyers of AMC’s Canadian theatres? Cineplex Entertainment and Empire Theatres can benefit by dividing the spoils.

With head office in Kansas City, AMC has been a dominant player south of the border for decades, but recently it has been cash-strapped. And its invasion of Canada in 1998 turned out to be a costly mistake.

After building expensive multiplexes in the Montreal and Ottawa areas as well as circling Toronto, AMC has failed to generate enough box office revenue to pay for its fancy digs. With just 6 per cent of Canada’s box-office loot, and no locations outside Ontario and Quebec, it is often unable to land the most popular new releases.

Much greater clout is wielded by Cineplex, which under the savvy management of CEO Ellis Jacob has solidified its position since swallowing its former rival, Famous Players, in 2005.

Cineplex gets about 66 per cent of the Canadian box office. AMC even has trouble competing with the much smaller Empire chain, which claims 13 per cent.

What difference will it make to moviegoers if AMC or Cineplex or Empire runs the movie house? Well, in suburban and outlying areas, the same high-grossing Hollywood movies are pretty well sure to be playing at a theatre near you.

But the logistics get much more complicated when it comes to downtown Toronto and specialty films: subtitled foreign movies, Canadian productions, quirky docs and low-budget indie dramas.

Opened in 1980 by Famous Players, the Cumberland was taken over in 1997 by Victor Loewy of Alliance. Then Cineplex bought it in 2005.

In recent times, the Cumberland has kept going on short-term leases while the building’s owners waited for a condo deal. Lately it has been operated by Cineplex. It did not get needed upgrades in equipment, seating and decor because, given its uncertain future, a major investment was too big a risk.

So where can those who relied on the Cumberland expect to find their favourite movies in future?

Distributors almost always want their specialty films to be shown at the Varsity and Loewy says Canadian films are treated as a priority by Cineplex. But the Varsity can take only so many films.

Hussain Amarshi, president of Mongrel Media, notes that after being renovated by Hot Docs, the Bloor cinema could be the perfect home for boutique films. AMC’s only downtown complex, in Yonge-Dundas Square, is unlikely to be branded as an art house, no matter who owns it.

And TIFF Bell Lightbox could emerge as a lucky winner. For its first year in the new building, esoteric programming of old films failed to fill enough seats to pay the bills. But lately, attendance has surged with first-run hits like Pina and Monsieur Lazhar. Taking over where the Cumberland left off could help TIFF balance its books. In that case, the death of the Cumberland would not have been in vain.

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