AMC quits NATO

Fourth-largest exhib cites need for 'flexibility'

AMC Entertainment has quit the National Assn. of Theatre Owners in an implicit knock on NATO’s ability to lead on issues including the looming digital conversion.

The Kansas City, Mo.-based exhib wouldn’t detail its reasons for quitting the org, but confirmed that it sent a letter last week informing NATO it was bolting the trade group immediately.

“Basically, we just want the flexibility to pursue our own agenda at our own pace,” spokesman Rick King said. “There’s no one specific reason.”

NATO prexy John Fithian said the trade group was “disappointed” by the AMC move, but declined to say what might have prompted the decision.

“We’ve enjoyed our working relationship with them, and our door remains open when they’re ready to come back,” Fithian said.

NATO’s 700 worldwide members include 16 of the top-20 North American exhibs, with No. 5 Carmike the biggest non-member prior to the exit of No. 4 AMC. Smaller Edwards Theaters and General Cinemas joined the organization earlier this year.

The largest exhibs pay between $50,000 and $100,000 a year in NATO dues, with AMC’s contribution representing about 4% of the group’s operating revenue, according to industry sources.

Observers note AMC has always fancied itself something of a maverick among exhibs. It was the first circuit to rush headlong into megaplexes and more recently has been much more bullish on the conversion to digital projection than any of its competitors.

Indeed, there’s been some speculation on Internet chat boards that the publicly held company will embrace an offer from Technicolor Digital to underwrite costs of converting some initial screens in exchange for a cut of a few pennies on each box office dollar. To date, AMC operates only a handful of prototype digital screens.

However, AMC’s King said the company has made no decision yet regarding the Technicolor offer, which was detailed at the recent ShoWest trade show (Daily Variety, 3/8). King acknowledged that AMC has been bullish on electronic projection technology, but added, “I don’t think there is a perception that we as a company are going to be able to unilaterally trigger a digital conversion.”

The company has also been an early proponent in the fledgling movement to abandon co-op advertising, a long-used system in which exhibs participate in distribs’ costs for placing movie ads in local newspapers. It’s also believed the circuit has been a contrarian on NATO efforts to foster more specific and uniform guidelines on how exhibs deal with young patrons’ access to violent content movies.

One source close to the company suggested AMC execs hope their quitting NATO will signal to Wall Street that it’s approach to the business is somehow different than that of other, more fiscally battered circuits. Indeed, AMC looks like it will avoid filing for Chapter 11 bankrutpcy, though 10 other exhibs to date already have filed for court-supervised reorgs.

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