AMC Theatres

AMC Entertainment, Inc.

Type	Private
Industry	Entertainment (movie theaters)
Founded	1920 in Kansas City, Missouri
Headquarters	920 Main Street Kansas City, Missouri 64105
Key people	Edward Durwood, Founder Gerardo I. Lopez, CEO and President
Products	AMC Theatres
Revenue	$2.5 billion (FY 2007)
Net income	$134 million (FY 2007)
Owner(s)	JPMorgan Partners (managed by CCMP Capital), Apollo Management, Carlyle Group, Bain Capital, Spectrum Equity Investors
Employees	21,000
Parent	Marquee Holdings
Website	http://www.amctheatres.com

AMC Theatres (American Multi-Cinema), officially known as AMC Entertainment, Inc., is the second largest movie theater chain in North America with 5,325 screens,^[1] second only to Regal Entertainment Group, and one of the United States's four national cinema chains (Regal Entertainment Group, National Amusements, Inc. and Cinemark Theaters being the others) of the 12 largest on the continent that did not go bankrupt during the 2001-2002 recession,^[2] due in part to the fact that its theatres often dominate lists of the top 50 most profitable theatres in North America.^[3] Its mascot is the animated filmstrip Clip who has starred in the pre-show policy trailers from 1991 until a brief hiatus for most of 2009 until the autumn of 2009. It is also located in Canada, is known as AMC Cinemas in the United Kingdom, France, and Hong Kong and AMC Cines in Spain. AMC is headquartered in Kansas City, and has a P.O box in Atlanta.

History

Corporate headquarters in Kansas City (the company is moving to Leawood, Kansas in 2013)

The company was founded in 1920 by the Dubinsky Brothers (Maurice, Edward and Barney) who had been traveling the Midwest performing melodramas and tent shows with actress Jeanne Eagels. They purchased the Regent Theatre on 12th Street between Walnut and Grand in downtown Kansas City, Missouri.^[4]

The Dubinskys eventually changed their name to Durwood and the company was called Durwood Theatres.

In 1961, Edward's son, Stanley, took control of Durwood Theatres when his father died. Stanley had attended Harvard University and served as a navigator in the U.S. Air Force during World War II.

He renamed Durwood Theatres to "American Multi-Cinema, Inc.", and began to apply military management and the insights of management science to revolutionize the movie theatre industry.^[5] As he later explained to Variety, "We needed to define what our company was doing in the (exhibition) business. My dad wasn't that organized."^[6] It was founded on the belief that every "guest" (as AMC calls them) was to be treated first.

In 1963, AMC opened the two-screen Parkway Twin in a shopping center on Kansas City's Ward Parkway. Durwood later claimed that "in 1962 he was standing in the lobby of his 600-seat Roxy in Kansas City mulling over its poor grosses when he realized he could double his box office by adding a second screen and still operate with the same size staff."^[7] This insight arises from the fact that the real-time labor demands of a movie theatre are not constant. Rather, they come in bursts at the start and end of the movie. At the start, a large number of employees have to sell tickets, process tickets at an access point, sell food at the concession stand (a theatre's primary profit center), make sure the theatre is not overcrowded, and run the film projector. While the movie plays, a small number of employees are needed for security and access control, while the others are relatively idle, allowing them to restock concession items, clean restrooms, and clean the lobby. At the end of the movie, a number of employees are needed to clean the theatre for the next showing. When the start times for movie showings in several physically connected auditoriums are staggered correctly, one team can continually keep all of them operational with minimal downtime. An additional advantage is that a different movie can be shown in each auditorium, which increases the choices available at a theatre's box office at any given time, and minimizes the possibility that disappointed moviegoers will take their business to a different theatre altogether.^[8]

In retrospect, Durwood's idea seems simple, but it took a lot of trial and error to get the bugs out. For example, when the Parkway Twin opened, both screens were showing the same movie, The Great Escape.^[9] Next, Durwood followed up on the Parkway Twin with a four-screen theatre in 1966 and a six-screen theatre in 1969. It expanded nationwide in the 1980s.

AMC Empire 25, Times Square, New York City

AMC pioneered the first North American megaplex when it opened the AMC Grand 24 in Dallas, Texas, in 1995, though the first megaplex in the world had been built by European chain Kinepolis in 1988. (On May 27, 2010, AMC revealed that the AMC Grand 24 in Dallas would close before November 30, 2010, after AMC was unable to come to lease renewal terms with the property owner.)^[10] AMC continued to open megaplex theaters, such as the AMC Hampton Towne Center 24 in Hampton, Virginia in May 1998, which has a capacity of over 5,000 people (Virginia's largest). AMC also operates the busiest theater in the country at the AMC Empire 25 theater in New York City, New York, located near Times Square.

In 1997, AMC formed a joint partnership with Planet Hollywood to develop Planet Movies by AMC.

In the 1980s, AMC built and operated a number of multiplex ten-screen cinemas in the UK, including sites at locations such as Dudley and Tamworth. These were subsequently bought and taken over by UCI. In January 2002, the 16-screen Great Northern was opened in Manchester, which was later supplemented by the opening of a 12-screen cinema on the Broadway Plaza site in Birmingham in October 2003. United Kingdom outlets serve a dual function, they also cater to business conferences and companies can display spreadsheets and other things through a projector onto the cinema screen, this is in addition to the normal cinema functions.

On February 24, 2009, AMC's Board of Directors announced that long time CEO Peter Brown would be replaced by Gerardo I. Lopez as CEO and President effective March 2, 2009. Previously, Lopez was the Executive Vice President and President Consumer Products Group, Seattle's Best Coffee and Foodservice at Starbucks.

On March 26, 2009, AMC Entertainment announced that it will equip 1,500 of its screens with Real D projectors in the months ahead.

On March 28, 2009, AMC announced that it closed on a $315 million deal with Sony to replace all of its movie projectors with digital cinema projectors starting in the second quarter of 2009 and completing in 2012.^[11]

In September 2011 it announced plans to move its headquarters to a new $30 million four-story designed by 360 Architecture building in the Park Place development at 117th Street and Nall Avenue in Leawood, Kansas in suburban Kansas City. Kansas had offered $47 million in incentives to get the 400 jobs to move.^[12]

A few AMC locations

AMC Promenade 16 multiplex in the Woodland Hills area of Los Angeles, California   AMC Citywalk Stadium 19 with IMAX in Universal City, California   AMC at Easton Town Center in Columbus, Ohio   AMC 12 Cinemas in Birmingham, United Kingdom

Features

AMC introduced stadium-style seating, in which the seats are placed on risers so that each person has an unobstructed view of the screen, and adjustable armrests that can be raised to create "loveseat" style seating. Both of these features have become standard for nearly all movie theaters built today by all major chains.^[13]

The early versions of stadium-style seating as built in 1995 had auditoriums configured with an entrance to a flat area right in front of the screen for wheelchair-using guests; persons sitting there had to either lean back or look up at an uncomfortable angle to see the screen. Able-bodied guests had to ascend up the stairs to sit in the middle of the risers in order to have a comfortable line-of-sight with the screen. Since many wheelchair users also have limited neck movement range as a result of the injuries that put them in wheelchairs to begin with, this configuration made AMC a popular target for ADA lawsuits.^[13]

AMC subsequently solved the problem in newer theaters by building full-stadium auditoriums where the main entrance is through a ramp that emerges onto a platform in the middle of the risers, so that wheelchair users can enjoy optimal line-of-sight. However, the U.S. Department of Justice sued the company anyway and obtained an order from federal district judge Florence-Marie Cooper requiring AMC to retrofit over 1,990 screens in 95 multiplexes and megaplexes across the United States. The company successfully appealed the order to the U.S. Court of Appeals for the Ninth Circuit, which ruled on December 5, 2008 that the order was grossly overboard and violated AMC's due process rights under the Constitution of the United States.^[13]

AMC won by pointing out that the United States Access Board, for reasons unknown, had never amended its guidelines for movie theaters to specifically require theaters to provide line-of-sight for wheelchairs that was as good as the best sightlines from the elevated risers, versus merely providing an unobstructed view of the screen. The first time any government agency took that position was when DOJ filed an amicus brief in an unrelated case in 1998. Therefore, it was unfair to AMC to retroactively hold it to a standard which did not even exist at the time it started building stadium-style theaters and which it did not receive proper legal notice of; in contrast, AMC would have received constructive notice under the Administrative Procedure Act if the Access Board had ever bothered to amend its guidelines. The federal district court was ordered to identify the specific date after 1998 when AMC should have reasonably become aware that some agency in the federal government was taking the position at issue, and limit the retrofit order to theaters constructed after that date.

Customer loyalty programs

AMC also created the MovieWatcher program that rewards frequent movie-goers similar to other rewards programs, but featuring innovative restrictions. It was based on points per movie ticket purchased, with rewards varying from concessions to movie passes based on point level. However, points were limited to a maximum of four points per three-hour time period - which is two tickets.^[14] For those AMC cinemas which were not part of the Loews Cineplex acquisition and therefore ticketed by MovieTickets.com, the website's surcharge was waived for MovieWatcher members.

The MovieWatcher program would only give you certain rewards for each amount spent. Usually the guest would get a dollar off of a candy that was un-substitutable and that they usually did not want. MovieWatcher members were constantly asking for a better program, that allowed them to have more freedom with the rewards that they got.

On April 1, 2011, AMC started a new rewards program known as AMC Stubs. This program can be purchased for a fee of $12 for an entire year. For that initial fee each AMC Stubs member will receive $10 on every $100 spent between the box office and the concession stand at any AMC theatre nationwide. AMC Stubs members also receive a free size upgrade with every popcorn and drink they purchase (for example, an AMC Stubs member can get a large popcorn for the price of a medium!). AMC Stubs members can also waive the ticketing fees for online ticketing sites such as MovieTickets.com.

Other endeavors

AMC has also had some endeavors that did not prove as viable, such as experimenting with 16 mm film for projection and selling microwave popcorn at concession stands in the South several years ago.^[7] They also stumbled by agreeing to install the Sony Dynamic Digital Sound system in all their new locations, rather than the more popular Dolby Digital or DTS systems. While the majority of major releases have all three digital tracks, including SDDS, most independent and smaller-budgets films only have Dolby Digital tracks, leaving many films in AMC's otherwise ultra-modern megaplexes showing films in analog sound. Recently, AMC has begun installing Dolby Digital in all new auditoriums, and in 2003 began upgrading selected older auditoriums. AMC announced an agreement on March 26, 2009 to convert 1500 existing auditoriums to fully digital 3D screens using RealD technology.^[15] On March 30, 2009, AMC announced they will convert all 4500 screens in their chain to 4K digital projectors provided by Sony.^[16] In competition to IMAX, AMC had begun its conversion of select screens/theaters to feature the 'Enhanced Theatre Experience' (ETX), with the installation of custom sized wall-to-wall, floor to ceiling screens, 12-channel surround sound and digital projection (utilizing either Sony 4K projection or Christie DLP technology).^[17]

Acquisitions

The Loews Alderwood 16 in Lynnwood, Washington had opened in March 2005 before the merger with AMC

AMC has been successful in integrating competitive theater circuits into its family. In March 2002, AMC bought General Cinema Corporation, which added 621 screens to the company assets as well as Gulf States Theaters which had 68 screens in the greater New Orleans area. In late 2003, AMC acquired MegaStar Theatres, adding top-quality assets to its Atlanta and Minneapolis-St. Paul markets. Then on January 26, 2006, AMC merged with Loews Cineplex Entertainment; AMC was the winner in the merger and the newly acquired Loews company was renamed AMC Entertainment, Inc.

The company has interests in 385 theaters with 5,128 screens in six countries. Some of the U.S. theaters are named for basketball legend and businessman Earvin "Magic" Johnson, who became a partner of Loews in the mid-1990s. AMC also owns and operates a small series of theatres in the Metro Detroit area known as Star Theatres. The Star Theatres chain was acquired in the Loews Cineplex Entertainment merger, as it was one of Loews' assets.

The company has theaters in the United States and Canada. In addition the company operates two cinemas in the United Kingdom (in Birmingham and Manchester), one cinema in Dunkirk, France, and two in Hong Kong.^{[18][19][20][21]} AMC previously operated theaters in Brazil, Chile, Japan, Mexico, Portugal, South Korea, Spain, Sweden, and Uruguay.^[22][23][24]

On January 19, 2010, Kerasotes Showplace Theatres, LLC announced that they have signed a definitive agreement to sell most of the assets to AMC Entertainment, Inc., combining the nation's second and sixth largest movie theater chains.^[25][26][27]

On May 25, 2010, the $275 million sale between Kerasotes Theatres and AMC Entertainment, Inc. was completed.^[28][29]

Sale to investment Partnership

In 2004, the company which at the time publicly traded on AMEX under the code AEN was acquired by Marquee Holdings Inc. Marquee is an investment vehicle controlled by affiliates of J.P. Morgan Partners, LLC, the private equity arm of JPMorgan Chase, and Apollo Management, a private investment firm.^[30] The company continues to officially be headquartered in Kansas City although it has sold its headquarters building at Ten Main Center where it now leases space.^[31]

In 2006, the company announced a new IPO expected to be worth approximately $789 million, however, adverse market conditions convinced the company's management to withdraw from such an offering on May 3, 2007. The company filed for a $450 million IPO, in its third such filing since 2006, on July 14, 2010.^[32]

Main Competitors

	Missouri portal
	Companies portal

• Regal Entertainment Group
• National Amusements Inc.
• Cinemark Theatres
• Muvico Theaters

References

1. ^ http://www.natoonline.org/statisticscircuits.htm
2. ^ Kathryn Harris, "AMC on Firm Footing as Others Stumble," Los Angeles Business Journal 23, no. 4 (Jan. 22, 2001): 14.
3. ^ M. Doman, "AMC 3rd-quarter revenue up," Hollywood Reporter 366, no. 35 (Jan. 25, 2001): 6.
4. ^ The Dubinsky Brothers - Kansas City Public Library - Retrieved March 21, 2008
5. ^ La Franco, Robert. "Coming soon: a megaplex near you." Forbes, August 12, 1996, p. 133.
6. ^ Anonymous. "Durwood legacy packs 'em in." Variety, March 16, 1998, p. 42.
7. ^ ^{a b} Klady, Leonard. "Obituaries: Stanley Durwood." Variety, July 19, 1999, p. 40.
8. ^ Nan Robertson, "Multiplexes Add 2,300 Movie Screens in 5 Years," New York Times, November 7, 1983, C13.
9. ^ Anonymous, "Stan Durwood: Multiplex Theater Pioneer," Los Angeles Times, July 16, 1999, A22.
10. ^ Wilonsky, Robert (May 27, 2010). "It's Curtains For the AMC Grand 24". Unfair Park (Dallas Observer). http://blogs.dallasobserver.com/unfairpark/2010/05/its_curtains_for_the_amc_grand.php. Retrieved May 27, 2010. 
11. ^ Taub, Eric A. (March 29, 2009). "AMC to Get Sony Digital Projectors". The New York Times. http://www.nytimes.com/2009/03/30/technology/companies/30sony.html?_r=1. Retrieved November 12, 2010. 
12. ^ http://www.kansascity.com/2011/09/14/3142554/amc-moving-downtown-headquarters.html
13. ^ ^{a b c} Kenneth Ofgang. "Ninth Circuit Overturns Ruling on Disabled Seating at Movie Theaters" Metropolitan News-Enterprise, 8 December 2008
14. ^ http://www.amcentertainment.com/network
15. ^ http://www.investor.amctheatres.com/releasedetail.cfm?ReleaseID=373314
16. ^ "AMC Entertainment to Convert Entire Circuit to Digital Cinema Projection with Sony 4K Systems". 2009-03-30. http://www.investor.amctheatres.com/releasedetail.cfm?ReleaseID=373945. Retrieved 2009-04-06. 
17. ^ http://www.amctheatres.com/ETX/
18. ^ Home Page. AMC Cinemas (United Kingdom homepage). Accessed September 22, 2008.
19. ^ Home Page. AMC 20 Dunkerque. Accessed September 21, 2008.
20. ^ English home page." AMC Cinemas (Hong Kong homepage). Accessed September 21, 2008.
21. ^ "Locations Worldwide. AMC Theatres. Accessed September 21, 2008.
22. ^ "AMC International - Locations." AMC Theatres. January 28, 2001.
23. ^ "AMC, Loews Cineplex to merge." USA Today. June 21, 2005.
24. ^ "AMC International - Locations." AMC Theatres. June 8, 2003.
25. ^ AMC Entertainment and Kerasotes Theatres Announce Entry Into Definitive Agreement, AMC Entertainment, January 19, 2010
26. ^ Kerasotes Plans Sale of Theatres to AMC, NWI.com, January 22, 2010
27. ^ News About Kerasotes and AMC
28. ^ AMC Theatres and Kerasotes Theatres Announce Completion of Sale, AMC Entertainment, May 25, 2010
29. ^ AMC Closes on $275 Million Purchase of Kerasoets Theater Chain, Kansas City Business Journal, May 25, 2010
30. ^ Acquisition of AMC Entertainment by Affiliates of J.P. Morgan Partners and Apollo Management is Completed - amctheatres.com - December 23, 2004
31. ^ HQ Building For AMC Sells - Kansas City Business Journal - December 16-22, 2005
32. ^ AMC IPO information

External links

• Official website (Mobile)
• AMC Cinemas UK Website
• AMC Cinemas France Website
• AMC Cinemas Hong Kong Website