Redstone to possibly sell NA

posted by Michael Zoldessy on December 5, 2008 at 8:30 am

Faced with mounting debts, Sumner Redstone might be forced to choose one of his companies to sell. It could end up being National Amusements.

To the list of bizarre recent events such as taxpayers owning a chunk of Citigroup, and Lehman Bros., Bear Stearns and Merrill Lynch all biting the dust can be added the prospect of Sumner Redstone selling National Amusements holdings.

Privately held National is essentially the holding company for Redstone’s stakes in both CBS and Viacom as well as the theater chain run by daughter Shari Redstone.

Nothing is official, but a divestment of theaters is on the table as the mogul wrangles over how best to address the looming debt payments of about $800 million. Redstone has repeatedly vowed not to sell “one single share” of either company and to hold onto the 1,500-screen exhib circuit, the original building block of his empire.

Read the full story in Variety.

Comments (26)

JodarMovieFan
JodarMovieFan on December 5, 2008 at 9:02 am

In the Washington DC area, NA started off quite well, with the opening of the Alexandria, Centrefield and Merrifield multiplexes in the mid 80s. All had at least two auditoriums THX certified and had 70mm capability. As such, they were favored destination spots for me when they booked 70mm. Even in the early 90s, they kept up with cinema advances such as when DTS and Dolby Digital came around in ‘93 or so.

Unfortunately, after the mid 90s things started to go downhill from there. The Alexandria multiplex was a haven for gangs and other riff raff. It just closed a couple of years ago. As far as the others, they weren’t upgraded or kept up. Though Merrifield did receive a DP upgrade, it was in one of the smallest of the shoebox auditoriums, which was disappointing to say the least.

The Fairfax deLuxe is a mixed bag. The DP movies I’ve seen there have been very good, with auditoriums that are fairly large with equally large screens. The Director Halls, with their increased admission and their assigned seating is a joke. They make you feel like you’re in elementary school, with their assigned seating and ushers who check to see if you’re still in your seat, even for shows that aren’t sold out!

As far as the concept of better food, I don’t think food from Sbarro and Nathan’s Hot Dog elevates movie concessions to the next level. Sorry, but I’m not sad to see them being sold off.

moviebuff82
moviebuff82 on December 5, 2008 at 9:51 am

I never been to those theaters since they are located far and wide around NJ. Back in the 90’s, NA dominated urban cities like Newark and Sayreville with theaters that were visible near the turnpike. Nowadays they’re gone due to competition from other chains and other issues. The closest NA theater near me is the one in Edgewater, which was constructed not too far from where I used to job sample at the Palisades Medical Center in North Bergen. That theater is still thriving and doing better business than the Loews in Ridgefield Park, which is aging. Any chain that is not losing money can buy NA’s theaters and still make a profit.

nerwall16
nerwall16 on December 5, 2008 at 10:51 am

national amusment purchased the ritz theater in vorheese nj which was mainly an arthouse then went more mainstream with there bookings then closed there 16 screen theater in atco nj

markp
markp on December 5, 2008 at 7:55 pm

It is true that National closed some of their aging multiplexes here in New Jersey. Newark was just a bad location, it was only 15 years old when it closed. Amboys closed because of a caved in floor in the main lobby. At least it was 27 years old when it closed. As I stated on other posts here on CT, having worked for them, I felt for years that General Cinema and National Amusements were the 2 best chains that were. But in the past few years when I did work for National in New York, I could see the changes. Too many of the people I knew were gone, or close to leaveing. And Redstone didnt help by not letting his daughter run the company. If she had total control, things would probably be different.

longislandmovies
longislandmovies on December 6, 2008 at 5:01 am

National Amusments is still one of the best run theater changes in the country.Better run than AMS OR REGAL and by far Carmike in my opinion.

MPol
MPol on December 6, 2008 at 5:24 am

I remember them when they were originally called “Showcase Cinemas”. We’ve got a bunch of them here in the Bay State, too. Somebody was telling that they read/heard that many of the multiplex cinemas will begin to disappear, but there’ll always be movie palaces and multiplex cinemas alike left because there’ll always be people (myself included) who want to continue to go to the movies, rather than just sit home and watch them on TV.

John Fink
John Fink on December 6, 2008 at 6:17 am

I imagine National being a tough sell because they along with Muvico have a history for being innovative. I haven’t heard AMC in the fray regarding buying National. I’ve heard that National will retain the New England and Russian locations, and sell off the rest of the chain including its UK operations (where they just launched Showcase: Cinema De Lux).

I agree with longislandmovies – I’m a movie addict and I’ve been to every major chain, although not perfect National is the best, General Cinema was a great chain too. AMC I’ve never really had a problem with aside from the insanity of the new Garden State (something always go wrong there, its never a quiet night at the movies). Often when I’m here I’m cursing myself for not having driven the extra 10-minutes to Edgewater Multiplex.

Where Regal and Cinemark will find challenges I think are operating the theaters to National’s standards. Even their older theaters (such as Showcase Cinemas East Hartford, now closed) were clean, in good repair, and had high standards for projection, service and comfort. NA also owns two drive-ins that operate on a seasonal basis, would Regal or Cinemark (which didn’t take Century’s Drive Ins) run them? It should be interesting, one thing’s for sure: we’ll be loosing one of the best theater chains around.

nerwall16
nerwall16 on December 6, 2008 at 3:43 pm

i still like seeing shows at cinemark they do a fantastic midnight cult classic once a month, but national amusement was my fave place to go see a flick in a clean quiet enviroment. regal is and will continue to be all thats wrong with theater chains

movies10063
movies10063 on December 6, 2008 at 6:57 pm

KIND OF IRONIC THESE BIG CHAINS OF MULTIPLEXES WHO ARE PUTTING MORE AND MORE MAIN STREET THEATRES OUT OF BUSINESS ARE NOW IN TROUBLE.

MPol
MPol on December 6, 2008 at 7:46 pm

Well, movies10063….Ever heard the adage “What goes around comes around”?

KingBiscuits
KingBiscuits on December 6, 2008 at 9:58 pm

I’m guessing that Regal will be the favorite to buy National Amusements since they seem to eat up the older chains.

And I think that Cinemark and Carmike should merge just so people don’t get them confused.

CTCrouch
CTCrouch on December 7, 2008 at 12:47 am

I have my doubts about any of the “big three” buying National Amusements outright. Each will obviously explore the matter, but the price tag (even at a “fire sale” level) is a bit much to take on right now. Even if one of them was able to secure the financing (difficult within the current economy), would they really want to add that much debt on to their books (especially Regal, which has been piling up some hefty debts)? I would more easily picture National Amusements breaking the chain up in to smaller packages and selling off to numerous parties.

markp
markp on December 7, 2008 at 3:43 am

Inside industry rumors are that just this week, after the above announcement was made, that National canned all the division managers in the company, in an effort to stem the bleeding. And as far as any of the larger chains, AMC or Regal taking it over, I think CTCrouch is on track. It would be divided among many, because AMC and Regal are almost at their braking point as far as debt-load is concerned. And dont forget, a lot of these theatres sit on company owned property, something Sumner Redstone did years ago, when he converted all his drive-ins to multi’s. The land value alone could help to ease Nationals debt, if it sells the buildings to any developers.

MPol
MPol on December 7, 2008 at 7:46 am

KingBiscuits, from what I’ve been reading/hearing about Regal, if this:

“I’m guessing that Regal will be the favorite to buy National Amusements since they seem to eat up the older chains.”

is really the case, it may well mean the eventual death-knell to many, if not most of the multiplex cinemas, or at least a movement in that general direction.

nerwall16
nerwall16 on December 7, 2008 at 3:26 pm

regal sure has allot in common with those locust in the bible

KingBiscuits
KingBiscuits on December 7, 2008 at 4:42 pm

I’ve never been to a Regal but I’m really a big fan of them from reading about their practices. I like AMC and I’ve never been to a Cinemark (I live in a Wehrenberg and formely Dickinson dominated market but I’ve been to a few AMC theatres) but it seems like Regal will be the favorite since they’ve bought rivals in National Amusements’s key markets such as United Artists.

KingBiscuits
KingBiscuits on December 7, 2008 at 4:43 pm

Silly me, that should say “not really a big fan”.

Taxi
Taxi on December 7, 2008 at 5:45 pm

I agree with the comments longislandmovies and John J. Fink, They are by far the best run theater chain in the Connecticut area. I would guess that the “Bridge” in California will be the first to be sold, since it is their only one out west.

John Fink
John Fink on December 7, 2008 at 6:06 pm

I wonder if the brands would create a problem – there is also some nice synergy with the National and Viacom – MTV’s Movie House used to be filmed at The Bridge (I think they also do the same thing in Russia at their KinoStar De Lux). I have been to The Bridge in Philly which is a great theater: nice lounge, great atmosphere, well designed with corners to hide in – its what going to movies should be. It’s also extremely popular with the UPENN crowd – people get dressed up like they’re going to a club to see a film. It’s a great vibe (I understand LA’s is the same). There isn’t anyone who’s doing this kind of thing.

National has a loyal customer base: I’ve been to a few of their theaters in different states – in Seekonk, MA the box office attendant addressed regulars by name. There is a sense that National provides a community destination, tailored to each community they serve that I honestly haven’t seen with other operators. Regal is pretty generic aside from some programing differences, from Manhattan to Orlando, same for AMC.

As for a sale: Cinemark would be a very very bad thing. National for one isn’t afraid of the NC-17 rating and has always been progressive in its programing. Cinemark won’t run anything that is unrated or NC-17 rated because they feel those types of films threaten a “family friendly environment”….and Saw V is in 3 screens opening weekend.

Regal wouldn’t be a bad fit, they run some decent theaters, perhaps they could learn from National’s commitment to expanded concession offerings and VIP seating. Regal has played with the concept, and co-owns a view and brew type of theater chain.

AMC…maybe, but I think they’re still dealing with the Loews merger and they have debt. Others that I wonder about: maybe Reading Entertainment – they are a real estate company as well as a theater operator, they bought a good chunk of Pacific’s theaters, and they have a small east coast presence. This wouldn’t be a bad thing – especially down in South Jersey where Showcase at the Ritz Center could morph into an Angelika Film Center if that deal went through. Keratoses also seems hungry to grow, and they have been quickly (soon they’ll have an east coast presence), but I don’t know what shape their in. Who ever it is, I just hope they don’t screw up Edgewater Multiplex…or I might have to drive to New England for the National Amusements experience.

KingBiscuits
KingBiscuits on December 7, 2008 at 7:57 pm

Is Larry Miller (that crazy guy in Utah wouldn’t run Brokeback Mountain or Zach and Miri Make A Porno) involed with Cinemark? Because that sounds like his policy- family-friendly means lots of violence but no sex.

John Fink
John Fink on December 8, 2008 at 2:23 am

Not that I know of – Cinemark I remember did play Brokeback in Salt Lake during that time. Now the gay community I read is boycotting Cinemark over COO Alan Sack’s donation to support Prop 8 in California – I can imagine in Salt Lake you may be out of options to see Milk… Larry Miller won’t show it, and apparently the boycott had led to protestors picketing Cinemark/Century Theaters. Hope there is an independent operator showing it in that region.

The response from above regarding Cinemark was when I had read they wouldn’t show the unrated Passion of the Christ recut (with less violence) because they don’t screen unrated films. I posed a question online to them “surely a chain of your size operates some art theaters where you may occasionally have to show an unrated film if one becomes an art house hit” and got the family friendly reply back. I don’t think they’ve changed since buying Century, which had a whole art house imprint they ran. Cinemark retained it but the choices probably have gotten more bland, and safe – trending towards considering Changeling an art house movie and not something like A Christmas Tale (which is unrated). UA before the Regal take over used to also not show unrated films, this is why distributer Lot 47 released LIE with an NC-17 rating verses going out unrated – they wanted it to play at the UA Union Square in NYC. (LIE also played at several National Amusements sites on Long Island and at Edgewater Multiplex).

movies10063
movies10063 on December 9, 2008 at 4:28 pm

Mpol im glad you said what goes around comes around maybe this will help keep some of the small independant theatres alive after all America is built on small Businesses!!!

movies10063
movies10063 on December 9, 2008 at 4:32 pm

On the news in Conn. it says Showcase Cinenas in Orange has been sold to United Illuminated Electric Company, and 3 other closed locations will be sold in the spring, and the empire is crumbling!!!

charlesalex009
charlesalex009 on December 9, 2008 at 5:05 pm

Hai,

This is a nice article.It is true that National closed some of their aging multiplexes here in New Jersey. Newark was just a bad location, it was only 15 years old when it closed.I imagine National being a tough sell because they along with Muvico have a history for being innovative. Great article i gain so many new things in this article.Thankyou.

alex,
For Sale By Owner

MPol
MPol on December 27, 2008 at 1:05 pm

Hi, movies10063. Here’s keeping fingers crossed and hoping you’re right about this:

“maybe this will help keep some of the small independant theatres alive ”

You’re also right about this:

“after all America is built on small Businesses!!!”

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