Financially Strapped Finnkino Shakes Up Top Management

Elma Pehkonen-Rajamaki has been tapped as the new president and CEO of Finnkino, the largest film distributor and exhibitor in Finland and the local distrib for Buena Vista, 20th Century Fox and Columbia TriStar. She replaces Finnkino prexy and co-founder, Jukka Makela, who left the company Jan. 2.

Though neither Pehkonen-Rajamaki nor Makela was willing to comment on the reasons behind the shake up, it is believed that the company’s new owner, newsstand chain Rautakirja Oy, was dissatisfied with Finnkino’s financial standing. Despite having profitable 1992 and 1993 fiscal years, and reportedly breaking even in the first eight months of 1994, Finnkino was in receivership, with outstanding debts estimated at 50 million FIM (approximately $10 million).

It was controlled by the Union Bank of Finland through last October.

Rautakirja bought the bank’s 70% stake on Oct. 10 and had picked up the remaining shares owned by Egmont, Nordisk and others by the year’s end.

Rautakirja, which rents and sells videos in its kiosks, also owns Finland’s largest video distributor, Europa Vision.

It is in turn owned by a conglomerate that controls major Finnish newspaper and book publishers.

Observers expect new topper Pehkonen-Rajamaki, who headed Europa Vision and related companies since 1983, to replace Makela’s typically colorful, showbiz style of management with more orthodox business methods. One of the first decisions taken has been to merge Finnkino with Europa Vision by the end of February.

Pehkonen-Rajamaki’s long term aim is to boost ticket sales. Finnish screens are recovering from a long drop in admissions. Attendance registered a rise to 5.7 million in 1993, a level it is expected to have maintained when the 1994 count is in.

More immediately, her sights are set on the exhibition sector. “We’re severely behind in the development of theaters in Finland,” she told Variety. “This is an area where we believe management and marketing can reap rewards.”

In Helsinki, Makela’s plan to open a new 14-screen multiplex downtown, aimed at snaring 10% of the country’s film business, has been put on hold due to unavailability of the site chosen.

However, Pehkonen-Rajamaki affirmed the company’s continued commitment to the project and said they were in the process of searching for a new building location now. “We urgently need a superior entertainment center to serve the Helsinki market,” she said.

Finnkino became the first Western distrib to jump into the opening Baltic market when it expanded operations to nearby Estonia and Latvia in March 1993. It currently releases Fox, UIP and Columbia/TriStar product in these two states. In Latvia, Finnkino is the majority shareholder of the Baltic Cinema SIA threeplex, and plans to add two or three theaters this year. “We are proceeding by careful steps,” Pehkonen-Rajamaki told Variety, “but the Baltic states are definitely an interesting area for us.”

Finnkino was created in 1986 by Makela and his cousin Juha Makela, who come from a well-known family of film exhibitors, and by Markku Koistinen.

Juha Makela has been confirmed as Finnkino’s head of distribution and Koistinen as exhibition chief, though Koistinen has announced he will move on this summer. Reijo James, head of Finnkino video distribution, switches to legit programming.