Banner
Home Forums Movie Theaters The Lobby NATO estimates 10-20% of theatres will close
Welcome, Guest
Username: Password: Remember me

TOPIC: NATO estimates 10-20% of theatres will close

Re: NATO estimates 10-20% of theatres will close 18 Oct 2011 17:18 #37221

  • Mike
  • Mike's Avatar
  • OFFLINE
  • Administrator
  • Posts: 5075
  • Thank you received: 45
  • Karma: 16
so why is it important if some podunk 2 or 3 screen in Missouri or Montana gets killed off by this collection of careless conspirators in their demise? Is there a person anywhere who truly loves a megaplex like it has a soul? Sorry: no. You can switch out a Regal for a Carmike and would anyone notice? Not hardly. But in small towns and downtowns across the country movie theatres matter greatly, they are at the heart of many of these towns, they are first line social and community institutions. I know that people who live in larger towns are clueless about this fact. It's almost like expecting a racist white guy to feel what a black man might experience. Bigger city citizens do not understand what makes a small town tick and essential to that ticking is a movie theatre. it's why counties and towns all over the USA have funded the restoration or attraction of movie thetares in their communities. It is why cities and towns work to attract a movie theatre operator into their projects or downtowns. Movie theatres bring life to smaller cities and towns. And for all the big dreams that started in small towns looking at a movie screen... that's why it's important.
Michael Hurley
Impresario
The administrator has disabled public write access.

Re: NATO estimates 10-20% of theatres will close 18 Oct 2011 17:45 #37222

  • leeler
  • leeler's Avatar
  • OFFLINE
  • Platinum Boarder
  • Posts: 1346
  • Thank you received: 12
  • Karma: 12
I agree with what has been said. I wonder what the answer is, though. Anybody who didn't think this day was coming just wasn't thinking about it very hard. What exactly should NATO/CBG's role have been and what should they have done that they haven't? I know that in all of the discussions I have had in all of the regional conventions I've been to the drum beat to join up or lose out has been very loud. I admit that outside of these circles it was only the occassional e-mail that I heard or read about.

I reopened my first theater in 2003 and even that far back the choice wqas clear, start considering how you're going to convert, because convert you must at some point (back then everyone was guessing digitial would be further along then it is at this point). The fact that some theaters are not going to make it should suprise nobody. Some are barely hanging on as it is and the next big expense (roof, air conditioner, etc) was going to drive them over the cliff. Others really don't make any profit and are essentially hobby theaters that the owners can't fund any more then they already have. I know of some owners who are approaching reitrement age and would never see a return on a digital investment so they are not making the switch or are selling. I would imagine that there are deals to be had on some of these smaller theaters that haven't made the switch. Many of the community-owned ones near me are holding fundraising drives in order to make the switch which is something I never would have been able to do. Am I jealous? Hell yes I am.

The bottom line is it is easy to cast stones about what should have been done or how things could have been handled better but until you are in their shoes doing it day in and day out then you better be sure about what you're talking about.
"What a crazy business"
The administrator has disabled public write access.

Re: NATO estimates 10-20% of theatres will close 18 Oct 2011 18:48 #37223

  • Mike
  • Mike's Avatar
  • OFFLINE
  • Administrator
  • Posts: 5075
  • Thank you received: 45
  • Karma: 16
worth reading and shows what I have said: one lawsuit or states attorney general and the fan will be clogged

Small Cinema's Antitrust Win: Big Implications For Large Exhibitor Chains

A long-running antitrust battle between a small independent movie theater owner, Flagship Theaters, and the third largest U.S. movie theater chain, Cinemark Holdings (CNK) and its Century Theatres subsidiary, (the “defendants”) has taken a turn in favor of David instead of Goliath. A recent California Court of Appeals decision could have far-reaching ramifications for the distribution and exhibition of motion pictures.
The just published opinion of the Appellate Court in Flagship Theatres of Palm Desert, LLC v. Century Theatres, Inc. reversed a lower trial court’s decision that threw out this 2006 case. This decision reignited the case and included several rulings that pose increased risk to the way large movie theater chains, such as Regal Cinemas (RGC), AMC Entertainment, Cinemark and Carmike Cinemas (CKEC), compete with independent theater operators and smaller theater exhibition chains like Reading International (RDI) and Marcus (MCS) to license and show first run movie product from the movie studios.
Should rulings in this important decision stand, the thresholds to prove improper competitive behavior, at least to obtain discovery (evidence gathering via depositions, subpoenas, etc.) and get to a trial of the facts, will have been lowered. Cinemark says they will appeal to the California Supreme Court, if necessary.
As a result of this Appellate Court ruling, executives of some of the movie industry's top distribution companies such as Warner Brothers (TWX), Paramount (VIA), Disney (DIS), Twentieth Century Fox (NWS), Sony/Columbia (SNE), Universal (CMCSA) and Lionsgate (LGF) could be called to testify about the normally behind-the-scenes deal-making between studios and theater chains. What’s also intriguing is that the court additionally ordered the unsealing of substantial documents in this case previously kept under wraps.
Why Is This important?
Antitrust laws make it illegal for a large theater chain to manipulate the cut off of movie supply to independent theaters and smaller chains by threatening to use its larger size to retaliate against movie distributors who choose to supply these "pesky" competitors. Because the larger chains have theaters in areas without any competition (possibly having driven it out earlier) movie distributors wanting the largest audiences in the aggregate are under pressure to comply with the large chain’s wishes or risk getting shut out of desirable markets.
Several U.S. Supreme Court decisions on this topic govern the distribution and exhibition of movies, leading to a general prohibition of the movie production companies owning theater exhibition chains and also requiring films be licensed on a theater by theater, film by film basis. These cases have made film licensing negotiated on a chain by chain basis, also known as “circuit dealing," illegal. (See case like United States v. Paramount Pictures (1948) 334 U.S. 131 and United States v. Griffith (1948) 334 U.S. 100.)
Case Background And Highlights Of The Court Opinion
In the original 2006 lawsuit, Flagship Theatres (the plaintiff) contends that the defendants have used the power deriving from both the enormous size of its theater circuit and its many theaters in noncompetitive markets to undermine the competitive process through which theaters bid for and obtain licenses to exhibit first-run films. According to Flagship, superior bids by its only theater, the Cinemas Palme d’Or 10-plex in Palm Desert, California (the Palme), are often rejected in favor of inferior bids by the Century’s 15-plex in Rancho Mirage (the River) as a result of the defendants’ abuse of the power of their circuit.
The lower trial court ruled that Flagship could not show an “antitrust injury” and could not show that Century had market power in “the market in which the Palme and the River compete” (California’s Coachella Valley - the Palm Springs area) and entered judgment against Flagship, throwing out its case.
Flagship appealed, arguing that the trial court erred in requiring Flagship to show actual harm to competition and limited Flagship’s discovery to defendant’s market power over suppliers just in the local market of the Coachella Valley.
The recent ruling from the California Court of Appeals agreed with Flagship in holding that:

The plaintiff need not show the market has actually become less competitive, just that Flagship was being injured by a “competition-reducing aspect or effect of the defendant’s behavior.” And ...

The circuit dealing claimants are entitled to engage in discovery concerning theater circuit and film licensing practices outside the market in which the two theaters compete. “The essence of Flagship‟s claim is that Century has used its power outside the Palme/River market to influence competition within the Palme/River market.”

As importantly, the Appellate Court also clarified one point of law with regard to proving prohibited circuit dealing. It specifically disagreed with defendant’s contention that, in order for improper circuit dealing to be found, an agreement covering all of a circuit’s theaters was necessary. Instead the court clearly thinks even licensing agreements covering some theaters may be all that is needed to prove the illegal behavior when it stated:

“When a dominant theater circuit uses its overall size or its monopoly power in certain locations (or both) to obtain more favorable film licensing treatment in competitive locations than it otherwise could have obtained, the circuit’s conduct may have the same effects regardless of whether the resulting licensing agreements cover all of the theaters in the circuit or only some of them.”

Stay Tuned
Future proceedings are sure to have major implications for the competitive balance between large theater exhibitors vs. independent cinemas and small chains, exhibitors in general vs. studios and distributors, and certainly the movie-going consumer.
Funds I manage are long RDI, RDIB. These funds or its affiliates may buy or sell securities of this issuer at any time.
Disclosure: I am long RDI, RDIB.
Michael Hurley
Impresario
The administrator has disabled public write access.

Re: NATO estimates 10-20% of theatres will close 18 Oct 2011 18:51 #37224

  • Mike
  • Mike's Avatar
  • OFFLINE
  • Administrator
  • Posts: 5075
  • Thank you received: 45
  • Karma: 16
leeler wrote:
I agree with what has been said. I wonder what the answer is, though. Anybody who didn't think this day was coming just wasn't thinking about it very hard. What exactly should NATO/CBG's role have been and what should they have done that they haven't? I know that in all of the discussions I have had in all of the regional conventions I've been to the drum beat to join up or lose out has been very loud. I admit that outside of these circles it was only the occassional e-mail that I heard or read about.

I reopened my first theater in 2003 and even that far back the choice wqas clear, start considering how you're going to convert, because convert you must at some point (back then everyone was guessing digitial would be further along then it is at this point). The fact that some theaters are not going to make it should suprise nobody. Some are barely hanging on as it is and the next big expense (roof, air conditioner, etc) was going to drive them over the cliff. Others really don't make any profit and are essentially hobby theaters that the owners can't fund any more then they already have. I know of some owners who are approaching reitrement age and would never see a return on a digital investment so they are not making the switch or are selling. I would imagine that there are deals to be had on some of these smaller theaters that haven't made the switch. Many of the community-owned ones near me are holding fundraising drives in order to make the switch which is something I never would have been able to do. Am I jealous? Hell yes I am.

The bottom line is it is easy to cast stones about what should have been done or how things could have been handled better but until you are in their shoes doing it day in and day out then you better be sure about what you're talking about.

I am not in their shoes. I am quite clear whose shoes I wear. The shoes they wear is that they represent theatre owners. NATO ...I am a theatre owner and a member of the organization.
Michael Hurley
Impresario
The administrator has disabled public write access.

Re: NATO estimates 10-20% of theatres will close 18 Oct 2011 19:00 #37226

  • leeler
  • leeler's Avatar
  • OFFLINE
  • Platinum Boarder
  • Posts: 1346
  • Thank you received: 12
  • Karma: 12
well it sounds like you have some pretty clear ideas about how they should have handled this differently. Such as......
"What a crazy business"
The administrator has disabled public write access.

Re: NATO estimates 10-20% of theatres will close 18 Oct 2011 23:47 #37228

  • RoxyVaudeville
  • RoxyVaudeville's Avatar
  • OFFLINE
  • Platinum Boarder
  • Posts: 895
  • Thank you received: 17
  • Karma: 3
such as....

About 4 or 5 years ago I attended a NATO of Pennsylvania meeting in which John Fithian was the speaker. He announced at that meeting that the digital conversion would now move ahead full steam as all 3 of the NATO conditions have been met by the studios.

They were: 1. The quality of digital had to surpass the quality of 35mm film. 2. As they are to benefit from it financially, and the theatres will not, the studios will pay for it. 3. EVERYONE large or small will be included... no one will be left behind.

I was there, I heard it and I saw it spoken... it was a lie.
The administrator has disabled public write access.

Re: NATO estimates 10-20% of theatres will close 19 Oct 2011 00:11 #37229

  • muviebuf
  • muviebuf's Avatar
  • OFFLINE
  • Platinum Boarder
  • Posts: 686
  • Thank you received: 1
  • Karma: 0
I gave up on NATO in the late 1980's when the issue of per capitas raised its head.

The studios had started requiring per caps to keep discount theatres away from the product. This was at the behest of full price theaters. NATO publicly refused to get involved to protect a segment of the theatre market.

I still remember sitting at a dinner at ShowEast where a prominent theatre chain owner stated publicly stated that discount theatres should not be allowed to exist. I kept watching the fellow from NATO sitting across from me who was nodding his head in agreement.

NATO's prime purpose always has been .... and always will be .... to keep the theatre owners from getting too rebellious and telling the studios to stick it where the sun doesnt shine.
Last Edit: 19 Oct 2011 00:17 by muviebuf.
The administrator has disabled public write access.

Re: NATO estimates 10-20% of theatres will close 19 Oct 2011 02:07 #37230

  • slapintheface
  • slapintheface's Avatar
  • OFFLINE
  • Platinum Boarder
  • Posts: 2457
  • Thank you received: 22
  • Karma: -64
I was the outcast on this board( still am lol) when I brought these things and others up 2 years ago. Nato might be one of the most ineffective groups I have ever seen.
The administrator has disabled public write access.

Re: NATO estimates 10-20% of theatres will close 19 Oct 2011 11:35 #37232

  • leeler
  • leeler's Avatar
  • OFFLINE
  • Platinum Boarder
  • Posts: 1346
  • Thank you received: 12
  • Karma: 12
Speaking as one of the 88 companies that was converted with the help of NATO/CBG I am sure glad they are there. My single screen converted almost two years ago (how did THAT time go so fast?) and without their help it might likely not have made it or it would have been sold to the town or somebody with bigger pockets. It was/is a huge investment I made in my company with personal funds and thanks to the work of NATO I am now able to recoup my investment (albeit slowly). This in turn led me to be able to buy and convert my six screen theater. Without NATOs involvement none of this would have been possible.

As far as lies being told did anybody consider that NATO and CBG were marching to the goal of having every screen being able to be converted and just failed? You make it sound like it was a willful deception on their part.

We joined NATO back in 2004 when we were horribly wet behind our ears (it's still pretty damp back there) but back then we knew we needed help and guidance with this issue. They said we ought to join the CBG and we did. They said they would help us and they did.

I'm sorry for those who won't be able to convert, I really am. I'm sorry for all of those small town thearters that won't make it. But how much power could a national organization have against ALL of the studios? Hell, I can't get anywhere with the studios when it's just ONE of them. Try talking the entire industry into anything! Many small town theaters will make it though and some (me included) were helped by NATO.
"What a crazy business"
Last Edit: 19 Oct 2011 12:40 by leeler.
The administrator has disabled public write access.

Re: NATO estimates 10-20% of theatres will close 19 Oct 2011 12:23 #37233

  • crazybob
  • crazybob's Avatar
  • OFFLINE
  • Junior Boarder
  • Posts: 35
  • Karma: 0
"NATO estimates 10-20% of theatres will close" This should be my last season, then My wife & I will retire from the drive-in business. I'm now age 60, I'm already retired from the Us Postal Service, & I now enjoy doing an early morning airshift @ a local radio station, during the off season.

I lease the ground that my theatre is on. It has two screens. I just doesn't make sense to us to invest BIG BUCKS into a seasonal business, that only draws from a 60K population whithin in a 40 mile radius. With 35mm film, we could keep it going for many years. So we'll take a time out for awhile & look for something smaller & closer to home. We pay dues to NATO, also. Thanks, Crazy Bob.
Last Edit: 19 Oct 2011 12:35 by crazybob. Reason: I have Asperger's Syndrome
The administrator has disabled public write access.

Re: NATO estimates 10-20% of theatres will close 19 Oct 2011 17:46 #37234

  • muviebuf
  • muviebuf's Avatar
  • OFFLINE
  • Platinum Boarder
  • Posts: 686
  • Thank you received: 1
  • Karma: 0
Leeler wrote:
As far as lies being told did anybody consider that NATO and CBG were marching to the goal of having every screen being able to be converted and just failed? You make it sound like it was a willful deception on their part.


The only way that NATO would have been able to assure that every screen would be converted was to insist that the studios finance and pay for EVERYONE UP FRONT. Sound ridiculous? Of course it is. That was never going to happen (heck the studios initially did not want to pay anything at all). Anything short of full up front payment by the studios was certainly going to leave some people out. You didn't need to be a fortune teller to figure that one out.

So what we have now is a system by which the fortunate ones who have the cash (or can borrow it) put their money up front to buy the equipment and (if they are one of the lucky ones) get reimbursed on the back end over time by a complicated series of VPFs (which are designed so that not all will qualify for them) and topped off with ridiculous non-disclosure provisions (can you say: double secret probation?).

NATO did what it was tasked to do .....which is what it is always been tasked to do....smooth things over as best they can (and try and keep the theatre owners placated).
Last Edit: 19 Oct 2011 19:26 by muviebuf.
The administrator has disabled public write access.

Re: NATO estimates 10-20% of theatres will close 19 Oct 2011 18:40 #37235

  • Mike
  • Mike's Avatar
  • OFFLINE
  • Administrator
  • Posts: 5075
  • Thank you received: 45
  • Karma: 16
I think this is a great and worthy topic for discussion. My feelings are plain and clear. I am still considering "what should NATO have done?" and will get around to it but right now I am hurrying to get stuff done and go to Show East, make a deal for 3 screens of digital cinema, and relax a little.
Michael Hurley
Impresario
The administrator has disabled public write access.

Re: NATO estimates 10-20% of theatres will close 20 Oct 2011 01:01 #37238

  • rufusjack
  • rufusjack's Avatar
  • OFFLINE
  • Platinum Boarder
  • Posts: 1496
  • Thank you received: 33
  • Karma: -7
Leeler,

As always thanks for sharing your experience.

Questions about your 6-screen: 1) Are using VPFs, 2) approx. where does it rank? Top 2800 locations? better?
The administrator has disabled public write access.

Re: NATO estimates 10-20% of theatres will close 20 Oct 2011 09:10 #37242

  • leeler
  • leeler's Avatar
  • OFFLINE
  • Platinum Boarder
  • Posts: 1346
  • Thank you received: 12
  • Karma: 12
in answer to your questions. I am getting VPFs for my six screen although I haven't gotten a check yet since there is a lag between when you earn your vPF and when you receive it. My theater is currently only five weeks old since going digital (plenty of 35MM equipment available for cheap, call me!). I have been told we are at the 2300 mark for prints.
"What a crazy business"
The administrator has disabled public write access.

Re: NATO estimates 10-20% of theatres will close 20 Oct 2011 16:15 #37243

  • Mike
  • Mike's Avatar
  • OFFLINE
  • Administrator
  • Posts: 5075
  • Thank you received: 45
  • Karma: 16
"what should NATO do?" Last night I attended a bit of a tax credits workshop for historic buildings and the presenter felt that they would apply to a theatre's digital projection system if it preserved the theatre. Interesting. I did not get enough info but will gather more. He says there are both Federal and state tax credits. They are salable so even if you lose money every year the tax credits can be sold to someone who needs them, like a bank. This is a very common way that housing projects get built. It would, at first glance, reduce our up front costs by 25% or 45K instead of 60K per screen and would happen off books and not apply to Cinidigm collections. Like I said: If you are not confused you don't understand what is going on.

The point is: there are things that NATO could be doing and this appears to be one of them. It seems ripe for a company, maybe CBG, cinidigm or GDC, etc. to put together a program and manage the tax credits. I'll look into this more.
Michael Hurley
Impresario
The administrator has disabled public write access.
Time to create page: 0.212 seconds
attraction attraction
attraction
attraction
attraction
attraction