Greidinger-led Cineworld buys Canada's big circuit

   Dec. 19, 2019-There is a consolidation in movie theaters that is a “wow.” UK-based Cineworld just reached an agreement to buy Canada’s largest circuit Cineplex for C$2.18 billion (US$1.65 billion). Cineplex accounts for 75% of Canada’s box office, meaning three out of every four Canadian boxoffice dollars.
   Cineworld—which is a multinational in Europe—acquired giant U.S. circuit Regal two years ago for $3.6 billion.
   So here’s some context. Many in the investment community are
doubtful about cinema’s prospects as video-on-demand saps audiences with home viewing, there's a constant need to invest in new equipment such as digital projectors and some movie distributors undermine the exclusive theatrical window with quick VOD releases. Existing owners of movie theaters are thinking about exiting, so there's no shortage of sellers.
   However, Cineworld—which is publicly traded and run by the Greidinger family—sees an opportunity from large scale and an eye to relentless cost-cutting. The Greidinger family’s cinema roots date back to what is now Israel in the 1920s.
   Acquiring Cineplex in Canada will make UK-based Cineworld the Western world’s largest circuit with 11,200 screens globally and North America’s largest operator 8,906 screens. Movies tend to be licensed on a county-by-country basis and within territories by smaller zones, so it’s not clear what clout broad geographic reach will mean. But exhibition is a good cash business--money comes in quickly, sometimes in cash.
   Pundits can blithly say cinema is dead at the hands of VOD, but remember TV coverage of sports hasn't killed off stadium viewing of football, basketball and the like. Sitting at home is clearly more comfortable, but humans crave shared experiences, which includes cinemagoing.
   UK-based Cineworld owns theaters in the US, UK, Ireland, Poland, the Czech Republic, Slovakia, Hungary, Bulgaria, Romania and Israel, and is poised to add Canada.
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