Announce plans to create Canuck chain of upscale theaters

MONTREAL — Alliance Communications Corp. and Viacom-owned Famous Players will announce today that they have reached an agreement in principle to create a Canadian chain of upscale, arthouse theaters to be called Alliance Cinemas.

The new Canuck circuit will have 15 screens in operation by this fall and will bring the total to between 60 and 75 screens at the end of three years. The loop will be 51% owned by Alliance, with Famous Players controlling the remaining 49% of equity.

It is the first national arthouse chain to set up shop in Canada, it marks the first time Famous Players has partnered with a Canadian company to create a circuit, and it is the first time a Canadian producer and distributor have made the move into the exhibition business.

Alliance Cinemas will focus its energies on Vancouver and Toronto at the start and then move into other major Canadian urban markets, including Montreal, Ottawa, Edmonton and Halifax.

The initial cost of the theater build-up will be in the range of $15 million to $20 million.

Partnerships

The new chain will not own the sites, but will usually go into partnership with developers and/or lease existing sites. Most of the 75 screens will likely be at new locations, according to executives at Alliance and Famous Players.

As part of the deal, Alliance Cinemas will take over several theaters currently leased and/or operated by Famous Players, including the Lumiere Cumberland and Bayview Village in Toronto, and it will acquire the Fifth Avenue Cinemas, Park Theater and Varsity Theater in Vancouver from independent arthouse exhibitor Festival Cinemas.

Leonard Schein, the co-founder and head of Vancouver-based Festival Cinemas, has been tapped to become the CEO of Alliance Cinemas. Schein has operated arthouse cinemas in Vancouver since 1978, is a former executive director of the Toronto Intl. Film Festival and was director of special programming at the Montreal World Film Festival from 1987-90.

Alliance Releasing, Canada’s leading indie distrib, has long-term output deals with a number of major U.S. suppliers, including Miramax, New Line and Artisan, and those companies’ more upscale fare will be funneled through the new exhibition chain in Canada.

The more commercial pics from Alliance Releasing will remain with Cineplex Odeon and Famous Players. Alliance Releasing also recently acquired 75% of Canadian distrib Cineplex Odeon Films, now renamed Odeon Films, which has an output deal with October Films for Canada. Also, the vast majority of Alliance Releasing’s Canuck product will be shown in the Alliance Cinemas chain and Alliance handles more Canadian pics than any other company.

Ongoing strategy

“It’s part of our ongoing strategy to maximize the financial benefits from our products and it will give us guaranteed shelf space for our films,” said Alliance Communications Corp. executive VP George Burger. “It also makes us much stronger as a distributor. It gives us a unique position in this market. We have brand recognition as a distributor and it makes sense to extend this to the exhibition business. It’s going to provide a tremendous launch platform for Canadian films, which is something everyone in the industry has been clamoring for.”

It also turns Alliance into an even more dominant force in the Canadian entertainment biz, with a major presence in production, distribution, broadcasting (via its two specialty channels, Showcase Television and the History Channel) and now exhibition.

Famous Players is in the midst of its most ambitious expansion plan ever in Canada, with a three-year, C$300 million ($206 million) program, and Famous Players president John Bailey said the Alliance Cinemas chain will complement Famous’ regular commercial sites.

“We really felt there was a hole in our plan and we thought there was an opportunity here,” said Bailey. “It was just a natural partnership with us being in the theaters and Alliance having a lot of product. It’s a whole different product line, and we don’t like to miss anybody.”

Most of the Alliance Cinemas theaters will have five to seven screens, with auditoriums ranging from 200 seats to 350 seats. Famous Players currently has 595 screens at 105 sites across Canada.

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