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Cinema’s Multiplex Fever Cooling Down

The great multiplex building boom which galvanized the cinema business in Britain over the past few years is tapering off.

Tradesters say most key cities are now well-served by cinemas, and in some towns there is a danger of overscreening. Economic factors are putting the brakes on new development.

“The retail market is so bad, developers can’t get the commitments to develop [shopping and leisure] centers, and while land costs have come down, it isn’t feasible to build by yourself,” says Charles Wesoky, CEO of the Paramount and MCA/Universal-owned United Cinemas Intl. circuit.

UCI operates 20 multiscreens in Britain and Ireland, and has another 12 scheduled to open over the next two years. Wesoky believes the recession is impacting attendance in provincial areas, where people have to drive to cinemas; ballooning gas prices caused by the Gulf crisis, plus high mortgage and interest rates, are squeezing household budgets.

“We’re seeing market saturation in many areas; you can’t keep building forever,” notes Ira Korff, CEO of National Amusements, which has seven sites in Britain and is hoping to announce one or two more. Korff argues that eight-plexes being built by Metro Goldwyn Mayer Communications’ Cannon loop in Stockport (near Manchester) and Liverpool will mean both cities are overscreened.

National Amusements and UCI both rue having multiplexes in the small Midlands town of Derby; ditto Rank Odeon and UCI in Hull. Similar head-to-head confrontations are looming between UCI and Warner Bros. Intl. Theaters in Thurrock and Preston.

“With saturation and land and building costs, there are fewer multiplex opportunities, but there is still room for development in smaller markets,” says Laurie Clarke, Rank Odeon m.d.

WB Intl. Theaters U.K. m.d. Ron Leslie dissents from his counterparts. “We had overbuilding in the U.S. I don’t think we will make the same mistake twice,” says Leslie, whose British empire consists of five theaters, plus 10 sites either being built or planned.

At the end of last year, Britain had 43 new-build multiplexes, ranging from six to 14 screens. Distribs say they account for 30% to 35% of nationwide grosses. “The advent of the multiplexes has galvanized the business,” says UIP U.K. m.d. Chris Hedges. “We’ve seen the British chains adding screens and refurbishing. The reinvestment means more films are going into the marketplace.”

Last year, admissions in Britain are estimated to have risen from 94 million to 97-98 million, and exhibs expect further modest growth in 1991.

Odeon chief booker Stan Fishman prefers to characterize that as recovery, noting that the British business has a long way to go before it recaptures the vitality of the early 1970s, when admissions were 176 million.

Cooler pics thwart century mark

The consensus view is that the overall product caliber last year failed to match 1989’s blockbuster crop; this, combined with the hot, dry summer and a flat trading period in November and December, inhibited attendance from reaching the anticipated 100 million mark.

In the 12 months ending Oct. 31, Odeon’s revenues increased by 3% over the previous annum. The circuit expanded from 233 screens to 259 by a combination of add-ons, subdividing and new builds. Clarke notes admissions were static at cinemas that did not benefit from redevelopment. Contingent upon planning approval, he intends to expand the loop to 301 screens by October.

“It’s been a good year despite the setbacks of the equatorial summer and World Cup. The product was good, though there were fewer outstanding films,” he says.

Admissions dip slightly

Cannon (soon to be renamed Metro Goldwyn Mayer Cinemas), the nation’s largest operator with 406 screens, had a slight dip in admissions last year, without an array of films to match 1989’s heavy hitters “Indiana Jones And The Last Crusade,” “Rain Man,” “The Naked Gun,” “Back To The Future Part II” and “Twins.”

Chief booker Stuart Hall is convinced the recession is dampening cinema trade, especially in the populous southeast of England, including the capital.

He’s fairly bullish about 1991, however, vouching: “I think we will have at least as good a year as 1990.” Cannon opened four multiplexes in the past six weeks (all acquired from Cineplex Odeon, which exited Britain last year) and is readying another seven to bow later this year.

National Amusements’ Korff says: “I’m pleased with the year’s results. Each of our sites has done better than the previous year, and I will be surprised if we don’t see a 10% to 20% improvement this year.”

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