Stuart Blair, CEO of United Artists Theatres, has resigned his post effectively immediately.
While the move was anticipated, its timing was somewhat surprising. The circuit’s fortunes have been rocky for the past two years, but recent expansion and diversification have suggested an upswing in 1997. An insider said, however, that Blair had been frustrated recently by turndowns of several proposed sites for new theaters from the UATC board.
Blair tendered his resignation Friday afternoon and left for a family vacation in his native Scotland.
His duties will initially be administered by a steering committee. A source said that the committee will be composed of UA exec VPs Kurt Hall and Bob Capps and three board reps from principal stockholder Merrill Lynch Capital Partners Inc. The company’s board is set to meet Tuesday or Wednesday to announce plans.
Sources said the exits of several execs at the company caused by the company’s disappointing results meant that there was likely no successor to Blair to be found within the company.
With approximately 2,300 screens domestically, the Englewood, Colo.-based UA ranks second among North American theater chains.
In 1992, Blair led a $680 million buyout of the circuit from Tele-Communications Inc. with financial support from Merrill Lynch. A former associate of TCI’s John Malone, Blair proceeded to divest the company of many of its losing sites while simultaneously maintaining an aggressive building program for several years. While others in the industry were divesting theater interests, Blair maintained that the business could sustain steady growth of between 5% and 10%.
However, in the company’s most recent results, for second-quarter 1996, cash flow showed a 7% erosion based on only 2% higher revenues. Last year, after having pulled back on building new sites, the company renewed efforts in that area but shifted much of its focus to expansion in Asia and Latin America.
Industry analysts have long noted that the circuit’s erratic performance has meant that it’s been forced to play catch-up with competitors. UA’s average complex has slightly less than six screens compared with the approximately 7.5 average enjoyed by other national exhibs. The chain has been operating in the red for two years and is currently carrying about $450 million in debt.
Following the announcement of second-quarter revenue in August, credit rating agency Standard and Poor’s reduced the circuit rating to BB-minus from BB. S&P applauded many aspects of the UA restructuring plans but questioned the speed and progress of implementing new programs.