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My first venture into theater ownership 19 Aug 2013 16:41 #40241

  • fkilcoyne
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I live in a town of 10,000 and the local 3 screen theater is closing. It has been on the decline for a while and the owner has let things go. I would like to buy it and run it. The closest theaters are 45 minutes away, I know the building needs renovation but what would I need to upgrade the projection equip and screens? What demographics do I need, (population, age groups) to make a go of it. Bottom line is where do I start in putting together a plan to evaluate the feasibility of this project. Any advice would be greatly appreciated. Thanks.
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My first venture into theater ownership 19 Aug 2013 18:57 #40242

  • Mike
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the best thing you can do is
1. read everything here in the forums
2. make a friend + 75 miles away that has a movie theatre and go visit
3. then come back here as your questions are asked 10000000 a year and all the answers are there.
4. how do you start a business? Study. Study.
Michael Hurley
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My first venture into theater ownership 19 Aug 2013 19:00 #40243

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Michael Hurley
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My first venture into theater ownership 19 Aug 2013 23:36 #40245

  • Keweler
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5. Start saving. Chances are the previous owner couldn't afford the 70k per screen you need to upgrade to digital.

Good luck,
Jay
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My first venture into theater ownership 20 Aug 2013 16:02 #40247

  • rufusjack
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Keweler wrote:
5. Start saving. Chances are the previous owner couldn't afford the 70k per screen you need to upgrade to digital.

Good luck,
Jay

Probably a minimum of $500k needed to purchase and get up and running to a decent level. Who owns the building? The current operator?
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My first venture into theater ownership 21 Aug 2013 04:20 #40249

  • Andrew Thomas
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It shouldn't cost $500,000 to renovate a three screen if you know what you are doing! Amazing deals to be had if you are willing to take the time to pursue them.

We are spending $125,000 up front on the 4 screener we are renovating right now, and $300,000 it total (equipment is financed, improvements are cash). This includes doing down to the sheetrock and concrete and redoing damn near everything AND going digital on all four screens plus a boatload of new audio gear.

I think these are important things to do:

Become an expert on your town and its people.
Become an expert on how the theater business operates.
Become an expert on the building you are trying to get into.
Become an expert on the codes/ordinances of your city.
Become an expert on negotiating deals.
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My first venture into theater ownership 21 Aug 2013 13:36 #40250

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Andrew Thomas wrote:
It shouldn't cost $500,000 to renovate a three screen if you know what you are doing! Amazing deals to be had if you are willing to take the time to pursue them.

We are spending $125,000 up front on the 4 screener we are renovating right now, and $300,000 it total (equipment is financed, improvements are cash). This includes doing down to the sheetrock and concrete and redoing damn near everything AND going digital on all four screens plus a boatload of new audio gear.

I think these are important things to do:

Become an expert on your town and its people.
Become an expert on how the theater business operates.
Become an expert on the building you are trying to get into.
Become an expert on the codes/ordinances of your city.
Become an expert on negotiating deals.

Andrew,

They said they want to purchase the theater. From the original post " I would like to buy it". How much do you think the real estate will sell for by itself? I am also including the cost of equipment. I think $500k is a pretty low amount.

I would imagine that a couple of contributors who have theaters for sale would believe that this theater could be worth a minimum of $150,000.
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My first venture into theater ownership 21 Aug 2013 16:37 #40251

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Three screens for 10,000 people is probably ok. You want to consider their average income, their religion, their primary hobbies, etc. when looking at demographics. If half the people are Amish or some other conservative faith such as Pentecostal Holiness, then they probably won't attend many movies. If people are poor, they won't go to the movies as much either.

In years past, people used to say that the "rule of thumb" was 10,000 people per screen. These days, you need 2 or 3 screens at a minimum to get by because of studio booking policies and trying to compete with other theaters. So, I don't think you need 10,000 per screen, but it will probably earn money about like a single screen did some years back. I do think that those 10,000 people need to be in the immediate area and not scattered all over the countryside. I had 20,000 scattered throughout the county and that turned out not to be the same as 20,000 living in town. It can work, but it's not the same.

That other theater 45 minutes away is not far enough to count them out. If it is a much nicer theater in a place where people prefer to go to eat out and shop, then they might as well be down the block for many of your potential customers.

Others here debate the cost of rennovation. You didn't say how big the rooms are or how many they seat. That leaves us guessing what kind of equipment you will need for your digital upgrade. Could be anything from maybe $40,000 for a small screen... if you are lucky and can do the install yourself, all the way up to $80,000 or more for larger screens over about 24 feet wide, plus installation. Add up those amounts for all three screens. Don't forget that the sound may need to be upgraded if it's not digital. That will cost $10K-$20K more per screen I suppose, if you want to do it right. If your seats are old, nasty and uncomfortable, figure about $120 apiece for new ones. Used can be had for much less or you can easily spend double that figure for upscale new seats. Hopefully everything else is ok, but it all adds up. Paint, carpet, drapes, concession equipment, etc. have to be considered.

My figures are only educated estimates based on everything I've ever read and seen. The way I renovated my theater is not viable anymore since it isn't digital. Others may chime in with more current data.
Last Edit: 21 Aug 2013 16:46 by lionheart.
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