Hoyts May Buy PK Cinemas in N.Z.

A proposal by Hoyts Corp. Holdings (N.Z.) Ltd. to acquire the New Zealand cinema assets of the troubled Pacer Kerridge Corp. is being considered by the Commerce Commission.

The commission must address the issue of dominance in the Kiwi market, given that the two chains are the only nationwide operators of cinemas.

Hoyts (with 40 screens) and PK (28) have concentrated their properties in the key population areas of Auckland, Wellington and Christchurch. Film distribution sources say the “duopoly” accounts for about 90% of cinema gross boxoffice annually – an estimated $30 million in 1990. For almost two years, PK has had financial difficulties, and its cinema chain is one of its remaining assets.

Areas of investigation will include the discretionary power of distributors in skipping cinema release and going straight to video; the market for screen entertainment in N.Z., including video rental companies and tv; and the relative costs and returns distributors might expect to obtain from cinema, video or tv screening of a movie.

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