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TOPIC: Two questions

Two questions 01 Aug 2002 17:15 #23380

  • Matthew
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Hey, folks.
I've been lurking around here for a couple of months, off and on, while contemplating how I was going to break into the movie business. I've looked at a couple of for-sale theaters in the general area.

The first question is like this: what is a good rule-of-thumb for pricing out an operating movie theater? I've got 'The business of show business' on order. But... is it reasonable for somebody to ask over $800,000 for a theater that netted under $10,000 last year? (Silly question, I think -$10,000 isn't even one month's mortgage payment for a loan that big, let alone an entire -year's- worth of payments.)

The second question is more about drive-in theaters. Are there any good resources out there for somebody thinking of starting a drive-in theater? And, what are the general differences between running a 'normal' movie thater (my experience is almost all with a 2-screen subrun theater that I GMed for over a year) and a drive-in?

I'm especially interested in anything about how film bookings are different for a drive-in theater. And...well...if there's any way to make money with these things anymore.(Though, the two way out on the eastern edge of the metro area are jam-packed every time I've been there!)
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Re: Two questions 01 Aug 2002 20:51 #23381

  • CharlieBo
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An old rule of thumb for buying a theatre(not including the land) was 3 times one years profits,OR one years gross.I don't know if that rule holds up today,but based on a $10,000 net,you should pay about $30G for the business.Of course,if its not a lease,land and equipment have to be paid for,and they should be independently appraised.
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Re: Two questions 02 Aug 2002 09:37 #23382

One place to get some basic info regarding getting into the drive-in biz is by reading the FAQ's, especially #5, on the United Drive-In Theatre Owners Association's (UDITOA) website at [url=http://www.uditoa.org.]www.uditoa.org.[/url]

While there have been a number of closed drive-in theatres reopened and even new drive-ins built during the past several years, I am not aware of any intensive educational resources regarding how to design, build, manage, or book a drive-in theatre. Learning about drive-ins is pretty much like a lot of other stuff in this business. Folks learn by watching, asking, and doing. Your indoor cinema management experience will be helpful but you'll also learn a lot through experience.

During the drive-in theatre building boom of the 1940's and 50's there were a number of companies, some operated by theatre equipment companies, that would build you a turnkey drive-in operation. These aren't around anymore but there are some practicing architects out there with some drive-in theatre design experience and there are motion picture projection and sound companies that have done installations at drive-ins when they've been built or when they have added screens. These people can be a valuable resource if you ever decide to pursue the idea of operating an outdoor theatre.

On the other hand, there are some folks who just "wing it" with a general contractor and a cinema equipment dealer, after hopefully doing some research about drive-in construction. Many of these people have done a nice job.



[This message has been edited by Starlite Cinema (edited August 02, 2002).]
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Re: Two questions 02 Aug 2002 10:24 #23383

  • Matthew
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Excellent, and very helpful link... Gives me good food for thought. And it makes me happy to know that I know people who will be willing to do some of the grading work relatively inexpensively....
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Re: Two questions 02 Aug 2002 19:13 #23384

  • Mike
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Prices are all over the world. 800 K sounds steep but if it's in between 5th and 6th avenue it sounds like a deal. It all depends on the realestate. I bought our first one for 165 including real estate and the second is a lease and will copst nearly that to open. Both are considered cheap. Keep in mind that when you buy a movie theatre they do not convert cheap so you really are buying a one type op so it better make some money. Question is: were they skimming?

Michael Hurley
Impresario
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Re: Two questions 02 Aug 2002 20:02 #23385

  • CharlieBo
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Exhibitors skimming??You've got to be kidding!!
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Re: Two questions 05 Aug 2002 17:20 #23386

  • Barry Floyd
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We looked into buying an existing "operating" drive-in here in Tennessee several months ago. The asking price was low enough that we could've wrote a check for the place. Upon some advise from several other drive-in owners, we contacted several film-bookers and had them pull the "grosses" for this theatre and is was pathetic. This theatre was also 103 miles from home!! Someone mentioned "skimming".... how does a theatre only bring in $1,500.00 on Spiderman for three weeks - on the break?

We passed on this "great deal", and two days later... we recieved the phone call from the City of Watertown. So far, they (the city) have taken care of all of the zoning issues, found us a site for the theatre with water, sewer, 3 phase electrical power & natural gas, worked with us on the price of the land (city owned), and we will break ground in about 3 weeks.

We are members of the UDITOA, and that organization has been bery helpful in the crazy endevour we are taking on.



Barry Floyd
Floyd Entertainment Group
Lebanon, Tennessee

Stardust Drive-In Theatre
Watertown, Tennessee
Barry Floyd
Floyd Entertainment Group
Lebanon, Tennessee

Stardust Drive-In Theatre
Watertown, Tennessee
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