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TOPIC: Operating Expenses questions

Operating Expenses questions 06 Dec 2008 02:12 #30481

  • JW88
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I haven't been involved in the movie theater industry before, but have recently been presented with the opportunity to become a partner in the restoration and opening of a 12 screen theater in my hometown. There is an older 6 plex in the area, but it doesn't get a lot of first run films. The nearest major competition is a 16 screen regal about 20 miles away. There is a population of about 45,000 in the area. I'm trying to get an idea of the amount of box office revenues and concession revenues I would be able to generate, as well as an estimate of the average operating expenses (employee wages, cost of goods sold, maintenance, insurance costs) as well as the number of employees that would have to be hired. I've looked through these forums as well as the frequently asked questions forum but have had a hard time finding this information, especially the operating expenses involved. Any information of this sort would be much appreciated, as I'd like to avoid getting involved in this venture at all if it doesn't have a good chance of turning a profit.

Thanks,
Jim Hunter
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Re:Operating Expenses questions 06 Dec 2008 09:58 #30482

  • slapintheface
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1st question was this theater opened before .IF yes when and why did it close........
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Re:Operating Expenses questions 06 Dec 2008 12:41 #30484

  • JW88
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The theater had been owned by a major chain back around 2000 and had done pretty well, but they sold it off during a restructuring or chapter 11. It was bought by a private investor and operated until 2006 but apparently had been leveraged too much and was seized by the bank.
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Re:Operating Expenses questions 06 Dec 2008 13:20 #30485

  • leeler
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I guess the easiest way to answer your questions is to go to the source. You should be able to see the books, I would think. To speculate on how much these expenses would be would be guesswork, plain and simple.
"What a crazy business"
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Re:Operating Expenses questions 06 Dec 2008 13:26 #30486

  • Mike
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Finding out what it grossed is easy as it will have been reporting to Rentrak. You can speak to studios and they'll tell you what certain films did. In general I would say it would be fairly easy considering you have a 12 screen theatre with a 6 to compete with: you'll play everything and do as well as you can in your market. Once you have an idea from ticket sale you can estimate yearly averages and concession per caps. Staffing costs will be dependent on your area but should not be much of a mystery, same for insurance, etc.
Michael Hurley
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Re:Operating Expenses questions 06 Dec 2008 14:51 #30487

  • JW88
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Thanks. I'll try to get the books to make a better assessment. I'm not sure how difficult that will be. Right now I'm trying to get a quick idea of the operating expenses involved. It would be really helpful if someone might be able to give me an idea of the average number of employees it would take to staff a 12plex.

Thanks,
Jim Hunter
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Re:Operating Expenses questions 21 Apr 2009 10:35 #31403

  • Bogart
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I tried calling Rentrak and I asked them about ticket sales for local cinemas and there response was they only give info out to distributors. Is this a good reference point? Maybe Im not asking the right questions.

Thanks in Advance,


Mark
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Re:Operating Expenses questions 21 Apr 2009 10:39 #31404

  • Bogart
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In my neck of the woods there once was an amc10 at the local mall but it closed down. Would one be able to get info as to what happen to the old movie multi plex. The theater has been gone since 1985.
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Re:Operating Expenses questions 21 Apr 2009 22:32 #31407

  • rodeojack
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Going that far back, I'd guess your best information would be from the local newspaper(s). In most places, your local or state library will have microfilm archives of past editions. There might be a story somewhere that covers why the theatre closed.


There might also be some information at cinematreasures.org/
Last Edit: 21 Apr 2009 22:33 by rodeojack.
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Re:Operating Expenses questions 22 Apr 2009 08:52 #31409

  • dsschoenborn
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What is your population in 10 miles. You mentioned 45,000 population but that would only support a 5 screen theatre at best and you say there are 26 screens already there. Unless you are going to come up with a unique business plan different than the competition you may have a hard time getting films because the distributors will go with the 20 plex corporate account over you every time unless you are producing attendance numbers that warrant you getting the movie.

For staffing you will need a projectionist everyday so you will need at least 2 people with those skills. A manger on duty at all times so that is 2 plus you or 3. An usher maybe 2 depending on the layout of the building and enough concession workers to staff the stand at busy times. That would mean at least 4 or 5 on busy nights and only 1 during the week.
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Re:Operating Expenses questions 22 Apr 2009 08:54 #31410

  • dsschoenborn
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Bogart wrote:
I tried calling Rentrak and I asked them about ticket sales for local cinemas and there response was they only give info out to distributors. Is this a good reference point? Maybe Im not asking the right questions.

Thanks in Advance,


Mark

Your booker can get you a Rentrak accout to review this info or do it for you.
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