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This topic comprises 2 pages: 1 2
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Author
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Topic: St. Louis, MO: Wehrenberg Theaters for sale
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Kyle Muldrow
Member
Posts: 143
From: Laguna Hills, CA
Registered: Jul 2003
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posted January 07, 2008 12:19 AM
This could be the beginning of the end of a St. Louis institution. I'm very interested in what my fellow St. Louisans have to say about this. (Sorry about there not being a link...I couldn't get that to work. Any advice on that is welcome.)
Harman Moseley says a "big name theater company" will end up buying Wehrenberg. There are only three that come to my mind: AMC, Regal, and Cinemark. I would favor Regal over AMC, but maybe Cinemark will want to enter the St. Louis market...and what about Starplex?
Fire away...
St. Louis Post-Dispatch (MO)
December 11, 2007
Piracy, digital threaten chain
LARGEST FAMILY-OWNED CHAIN looks for a way out.
INTERNET, HOME THEATERS also pose problems.
Author: Angela Tablac
St. Louis Post-Dispatch
Edition: Second Edition
Section: Business
Page: C1
Index Terms:
Wehrenberg;BUSINESS;MOVIE;SALE;PROPOSAL
Estimated printed pages: 3
Article Text:
Nearly 100 years after Fred Wehrenberg opened the first theater in St. Louis designed specifically for motion pictures, his company - said to be the oldest and largest family-owned theater chain in America - is shopping for a potential buyer.
Executives of Des Peres-based Wehrenberg Theatres, which operates 10 theater complexes in the St. Louis area and five more throughout the Midwest, told more than 800 employees last month that it's exploring a possible sale of its theater operations.
"The industry is consolidating, and the investment required to remain a leader keeps getting larger," spokeswoman Kelly Hoskins said Monday, reading from a prepared statement. "Remaining an effective competitor and continuing entertainment excellence requires a greater financial resource and economies of scale. We've concluded the best action for our company is to be proactive to determine our own future."
Hoskins said the company, which started in 1906 and opened the first motion picture theater in St. Louis in 1910, gets offers from interested buyers "a lot" and finally decided to examine those possibilities. Until a final decision is made, however, the company is "continuing business as normal."
Movie theaters across the nation are battling for business, said Wendy Walker, a securities analyst who covers two publicly traded cinema companies at New York-based Argus Research Co..
Larger chains, operated by companies such as AMC Entertainment Inc. and Regal Entertainment Group, dominate the cinema landscape. Theaters of all sizes compete against the sophisticated home theater and video gaming systems that have been capturing market share, she said.
Plus, movie studios are increasingly delivering movies via digital technology, instead of movie reels, Walker said. That technology costs theaters "hundreds of thousands of dollars" to implement.
Piracy via DVDs and the Internet also poses problems for movie theaters, said local cinema veteran Harman Moseley, who operates the Galleria 6 Cinemas, Moolah Theatre and Lounge, and Chase Park Plaza Cinemas.
"Most recently, 'American Gangster' was available to everyone on a pirated DVD well before the movie opened," he said. "If people are going to be able to get movies off DVDs, why would they pay to see one?"
Wehrenberg Theatres shuttered its Kenrick 8 Cine in Shrewsbury almost a month ago, but Hoskins said that closing is unrelated to the possible sale.
And still, the company continues to expand. It plans to open a 14-screen cinema in Bloomington, Ill., in late January, Hoskins said.
Steve DeBellis said the company's executives "really know the business and they know how to work it." He is author of "100 Years of Reel Entertainment: How Wehrenberg Theatres Became the Longest-Running Picture Show in America," a book published in 2006 and paid for by Wehrenberg Theatres.
"They command the lion's share of the market in their hometown," said DeBellis, who is president of Lemp Brewing Co. in downtown St. Louis.
To facilitate the search for a buyer, Wehrenberg Theatres hired UBS Investment Bank.
Hoskins said Monday the company did not have a buyer yet, and she declined to give the company's annual revenue or its target sale price.
Moseley, who predicted the buyer would be a big-name cinema group, called Wehrenberg executives "really smart" to look into a potential sale.
"I don't think this is a duress sale," Moseley said, adding that he doesn't plan to sell his own theaters anytime soon. "I think they're selling because they're afraid of the future - the uncertainty of digital, the uncertainty of piracy."
Memo:
Wehrenberg Theatres is shopping for a buyer
Copyright (c) 2007 St. Louis Post-Dispatch
Record Number: 1001150022
St. Louis Post-Dispatch
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Christopher Crouch
Member
Posts: 292
From: Anaheim, CA
Registered: Feb 2006
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posted January 07, 2008 09:34 AM
quote:
Harman Moseley says a "big name theater company" will end up buying Wehrenberg. There are only three that come to my mind: AMC, Regal, and Cinemark. I would favor Regal over AMC, but maybe Cinemark will want to enter the St. Louis market...and what about Starplex?
Starplex wouldn't be my first guess. The company has a pretty full plate right now (ex: five formally announced new builds opening in just the next six months).
I'm not sure any of the "big three" are particularly looking for a significant aquisition right now either. Between their semi recent major mergers/purchases, abundant new builds, and the hefty price tag of digital conversion, one would think they a spread a bit thin financially.
As for non industry investment groups, I think there are too many questions/myths/concerns/public misconceptions about the industry for someone outside the business to step in right now.
I'd guess it would end up being another chain, similar to the recent Pacific Theatres purchase by Reading International.
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Kyle Muldrow
Member
Posts: 143
From: Laguna Hills, CA
Registered: Jul 2003
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posted January 07, 2008 11:54 AM
I knew you two would be the first to respond! ![[Smile]](smile.gif)
Chris (Utley), I agree with you about Regal. When I said I favor Regal over AMC, what I should have said was that Regal would be more likely to do this than AMC would. Although they seem to have done a good job with the St. Louis Mills 18, I definitely share your concern about them, especially seeing what they've done to theaters here in Southern California (new builds and takeovers alike). It seems the quality of the show goes down with Regal. Go fig...that's why I was hoping Cinemark might sense an opportunity here. They seem to have better presentation in their SoCal theaters than Regal does.
Chris (Crouch), forgive me for trying to drag Starplex into this...again. Just thought I'd throw it out there. If a non-theater company buys Wehrenberg, does that mean the theaters would still be Wehrenberg Theaters, which would then be a subsidiary of the "parent" company? Isn't that similar to General Cinema in their final days? Weren't they owned by someone else?
For the record, I was back in St. Louis over Christmas and saw "National Treasure: Book of Secrets" at the St. Charles 18. Sound and picture were excellent and they didn't crop the screen. The picture took up the entire screen...and I don't believe this was in one of their main auditoriums. I'm most afraid they would change the name of the Ronnie's or get rid of the drive-in diner if someone else takes over the company. I would hope they wouldn't do that...
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Christopher Crouch
Member
Posts: 292
From: Anaheim, CA
Registered: Feb 2006
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posted January 08, 2008 02:05 AM
quote:
Chris (Crouch), forgive me for trying to drag Starplex into this...again. Just thought I'd throw it out there. If a non-theater company buys Wehrenberg, does that mean the theaters would still be Wehrenberg Theaters, which would then be a subsidiary of the "parent" company? Isn't that similar to General Cinema in their final days? Weren't they owned by someone else?
Nothing wrong with considering them. For all know, they are one of the candidates (I just think it's unlikely).
If a non theatre industry company were to make the purchase, the brand name utilized would depend on a lot of factors. On one hand, changing the branding would be expensive and the Wehrenberg name holds a value/drawing power; thus, supporting continuation of the status quo. On the other hand, the purchasing party might want to create a new brand/image or the seller might not want to part with the name/ask too high a price to include the name. However, I'd speculate the theatres would continue under the Wehrenberg name, as a subsidiary of comany X.
My guess remains a non "big three" chain stepping in. Whether they retain the name or not depends on that particular chain's corporate philosophy.
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David Au
Member
Posts: 133
From: Walnut Creek, CA
Registered: Sep 2006
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posted January 08, 2008 05:30 PM
There are many small theater chains such as Classic Cinemas, Muvico, Warren Theatres, Rave Motion Pictures, Phoenix Theatres, Bow Tie Cinemas, Reading Cinemas. However, most of the chains probably could not afford to pay as much as the giant chains such as AMC, Regal, or Cinemark. Most of those small chains usually stick to theaters in only a few states. However, Kerasotes recently ventured out and bought chains in far away states i.e. (Colorado Cinemas).
Of these chains Warren Theatres is well known for amazingly beautiful movie theaters like palaces. They have curtains on their screens, THX, and real butter on their popcorn. However, they seem to focus only on building new theaters. Classic Cinemas doesn't venture out very far, but they have preserved many beautiful classic theaters and restored them. Their website features photos and histories of each theater.
If Cinemark bought Wehrenberg they would probably keep the name just like they kept the Century Theatres name. AMC would probably just add AMC in front of the Wehrenberg name. So the Wehrenberg name would continue on if those two companies were to purchase Wehrenberg.
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