Metro-Goldwyn-Mayer spent $ 93 million yesterday to buy the 65 British cinemas it’s been effectively renting from French-owned bank Credit Lyonnais.
The studio has been operating the profitable cinemas since 1990 under a management contract with the bank’s Dutch subsidiary Credit Lyonnais Bank Nederland (which also owns 98.5% of MGM).
“This acquisition is a key element in our plan to restructure our theater operations in order to develop synergy and increase the underlying values of our operations through the growth of our international theater business,” London-based William Doeren, chairman of MGM’s International Cinema Group said in a statement.
Those 65 cinemas are part of the profitable European theater operations included in MGM’s recently released annual report.
The cinemas — in the U.K., the Netherlands and Denmark — generated 22% of the studio’s total revenues for 1992 with $ 207 million of revenues against expenses of $ 196 million (Daily Variety, April 1).
The only significant change this acquisition represents, according to an MGM spokesman, is that: “Now instead of just operating (the cinemas), they own the real estate.”