NEW YORK — More than 1,000 private screenings of “The Passion of the Christ” padded revenue last quarter at Regal Entertainment Group, the nation’s largest movie theater chain.
The screenings — 876 before “The Passion” opened, and nearly 500 after — plus a concert by Prince, and escalating fees from in-theater advertising are Regal’s response to a mature exhibition business, which is financially sound once more but growing slowly.
Regal also announced it bought 37 theaters (384 screens) for $226 million. Package includes 30 Signature Theatres in California and Hawaii, a new market for Regal. The other locations are in the Northeast.
Chairman Mike Campbell said “the company, under the right circumstances, could look at a larger transaction” as well. He declined to comment on Loews Cineplex, which is currently on the block.
Regal’s revenue for the quarter rose 2.3% to $541 million. Net profit fell to $23 million from $35 million as Regal cited a shorter quarter from the year earlier. The latest quarter ended on Dec. 27 — not Jan. 2 like the previous year — so it didn’t include a key week between Christmas and New Year. Admissions revenue rose 2.1% on 4% higher ticket prices — offset by a 1.8% dip in attendance.
Concessions see drop
Concession revenue eased 1%. Chief financial officer Amy Miles noted that R-rated pics like “The Passion” are less “concession-friendly.” The current quarter slate is much more “concession-friendly,” she said.
Other revenue, mostly from advertising through Regal Cinemedia, surged 19% to $35 million.
Regal co-chairman Kurt Hall, who runs Cinemedia, said the theaters have sold 70% of their ad inventory for the year. He said the ads are getting sharper and some advertisers “are beginning to use cinema as a launching pad for their campaigns.”
With the pre-pic commercial time limited, more ads are migrating to the lobby where Regal is starting to install plasma screens. Ads will be showing up in restrooms and on the inside of drink lids as the company looks to “deliver new sources of revenue and incremental value for shareholders,” Hall said.
Hall noted that the exhib sold 20,000 tickets to a Prince concert for $15-$17.50 a pop. Regal and other chains are seeking alternate uses for theaters to monetize downtime.
Rich dividend payments, however, are a more immediate incentive to shareholders.
Regal said Tuesday it will pay an 18 cent quarterly dividend on top of the extraordinary $5 payout it announced last week. It paid out a special dividend of $5.05 last summer as well.
Regal closed five theaters during the quarter with 25 screens. It now has 545 theaters with 6,020 screens.