Technology and viewing trends are sending ripples throughout the southwest Missouri cinema industry.
In the last two weeks, one downtown Springfield theater has been involved in a national acquisition, another reached a funding goal for two digital projection systems and an El Dorado cinema shut down instead of making the switch from 35 mm film. Hollywood action
In a clash of theater titans, Knoxville, Tenn.-based Regal Entertainment Group (NYSE: RGC) announced its agreement to acquire Portland, Ore.-based Hollywood Theaters on Feb. 21.
Regal Entertainment assumes control of Hollywood’s College Station Stadium 14 in downtown Springfield and Northstar 14 in Joplin through the 43-theater deal that represents 513 screens in 16 states and three U.S. territories. A spokesman for the company said all Hollywood Theaters would change its name to the Regal brand.
“The transition will be seamless with the exception to the change of name,” said Richard Grover, Regal’s marketing and communications director, in an email. “We took a close look at the portfolio of Hollywood Theaters. The Springfield theater and other locations are high quality assets, and we are excited to have them as part of the Regal family.”
Grover said plans regarding personnel or new locations would be reviewed after transitioning the brand, but he did not know when signage in Springfield would change.
The $238 million acquisition includes $191 million in cash – $157 million to cover Hollywood’s debt obligations – and another roughly $47 million to assume lease arrangements.
Regal Entertainment operates 6,880 screens in 540 theaters across 38 states and Washington, D.C., via Regal Cinemas, United Artists Theatres and Edwards Theatres, according to RegMovies.com. In 2012, the company reported earnings of $144.7 million, up 261 percent from $40.1 million in 2011. During the year, Regal increased profitability, in part, by shedding debt and decreasing interest expenses, and it acquired Great Escape Theatres, a 25-cinema chain based in New Albany, Ind.
Officials with Hollywood Theaters could not be reached for comment. Hollywood Theaters opened its downtown Springfield theater in October 2008 as the anchor tenant for the still largely vacant College Station retail development. Fundraising Moxie
Moxie Cinema Executive Director Mike Stevens said the downtown art-house theater reached a $120,000 fundraising goal on Feb. 27 to cover the expense of switching to a digital projection system from 35 mm film. The move comes amid sweeping industry changes.
Stevens said the Moxie expected the digital conversion to cost $160,000 for the two-screen theater, but the price of the systems has fallen in recent months with slower demand.
Theaters nationwide have been converting to digital systems steadily since 2005 when the six largest studios in Hollywood worked together to release digital specification standards. Michael Karagosian, president of Calabasas, Calif.-based digital consultancy MKPE Consulting LLC, estimated 90 percent of theaters had converted through the end of February.
“Basically, all the manufacturers realized the only market left was smaller screens and emerging markets in Latin America and Africa,” Stevens said of the trend.
Stevens said the nonprofit Moxie raised the bulk of funds through individual donors and special events, such as Trivia Binge at Patton Alley Pub, while some $22,000 came through local crowdfunding website CauseMomentum.org
“I’d like to say I’m some sort of fundraising Svengali, but it was pretty much people’s goodwill toward the Moxie, which is pretty exciting,” Stevens said.
The new projectors should be in place by May, he said. The Moxie theater, 431 S. Jefferson Ave., Ste. 108, has several bids out on two new projection systems, according to Stevens, and once The Moxie’s board of directors makes a selection, installers would set up the systems.Fat lady sings
The Opera House Theater in El Dorado Springs closed its 153-seat, one-screen theater after its showing of “Lincoln” on Feb. 25. Co-owner Davin Allison said he and his business partner and brother, Troy Allison, couldn’t afford the theater’s $54,000 price tag for a digital conversion.
Davin Allison said the brothers saw the writing on the wall for the five-year-old Opera House Theater. He said already many films were only available in a digital format and he’s heard estimates that by the end of the year, newer movies may not be released on 35 mm film.
“We picked a very poor time to open a movie theater,” said Allison, who also owns a quick lube, while his family operates a tire shop and an auto-parts store in El Dorado Springs.
In the hardscrabble theater venture, the family did 70 percent of the renovation work themselves, investing $180,000 in turning the property around before it opened its doors in January 2008. Prior to the Allisons purchasing the building in 2006, the former opera house had been closed since 1974.
He said the theater drew a small, but devoted, following. Still, revenues weren’t enough to justify the switch to digital.
“A one-screen movie theater will never be highly profitable. It was just paying its way, and we already had enough invested in it. We can’t afford to throw another $50,000 at it,” Allison said.
Knowing the digital wave was coming, Allison said he didn’t expect the speed at which the 35 mm age would die.
Theater consultant Karagosian said conversion hit a tipping point in August 2011, when it was estimated that half of U.S. theaters had made the switch to digital.
Stevens said he fears many rural theaters won’t be able to afford the conversion.
“The art-house theaters have gotten a lot of attention, and I’m glad for it, but the ones I think that are really going to get hit, the ones we’ll really see disappear are the rural theaters and drive-ins,” Stevens said.[[In-content Ad]]