Wall Street financing massive digital conversion program
Wall Street will raise over $1 billion to help fund the conversion of 20,000 movie screens to digital projection in a deal announced Wednesday.
Blackstone Group LP and JPMorgan Chase & Co are arranging financing for Regal Entertainment Group, Cinemark Holdings Inc and AMC Entertainment Inc to install 3D digital projection for up to 20,000 movie screens.
The three theater chains have reached agreements with Lionsgate, Paramount, 20th Century Fox, Walt Disney and Universal Pictures where the studios will pay a “virtual print fee” each time a digital movie is shown. The fee will be used to pay off the cost of the equipment.
Warner Bros. and Sony Pictures are expected to eventually sign on to the agreement.
Details will probably be announced before the start of ShowEast, the annual convention of theater operators, in Orlando on October 13th.
Up to 3,000 digital screens could be ready to go within a year as the studios are moving aggressively ahead with the production of 3-D movies.
Disney will have Bolt out in November, A Christmas Carol in 2009 and Alice in Wonderland in 2010. Dreamworks has Monsters vs. Aliens out in March and all future animated movies will be in 3-D. Twentieth Century Fox has Ice Age 3 out next summer and James Cameron’s Avatar out for Christmas.