Exhibitors finalize funding

Theater consortium lines up $660 mil for digital projectors

An infusion of $660 million toward converting theaters to digital projection should go a long way toward easing the 3D screen crunch.

Digital Cinema Implementation Partners (DCIP), a consortium of North America’s three largest exhibs, announced today it has finalized funding to equip 14,000 screens with digital projection systems over the next three years, a prerequisite for showing 3D titles. Exhibs will then decide how many of those screens will be converted to 3D.

DCIP, repping AMC Entertainment, Cinemark Holdings and Regal Entertainment, raised the money through JP Morgan and Blackstone Advisory Partners, including $445 million in senior bank debt, an additional $135 million in junior capital and $80 million equity from the member circuits.

“We are excited that with the continued support of our owners, studio partners and financial advisors we have completed this critical step in our process,” DCIP CEO Travis Reid said in a statement. “Having this substantial financial package and our studio partnerships in place, we’re pleased to launch this new era of technology to guests looking for an exceptional out-of-home experience.”

The cash is a major step forward for studios and theater owners, who are concerned there won’t be enough 3D-equipped screens to accommodate all the upcoming titles.

Last weekend, Disney rolled out its boffo 3D title “Alice in Wonderland,” taking in a worldwide haul of $216.6 million, with 3D revenue repping nearly 65% of the total take on roughly 40% of total screens. Domestically, “Alice” screened at 2,063 3D-equipped locations, with an additional 188 Imax locations.

Paramount will launch 3D toon “How to Train Your Dragon” on March 26, followed by Warner Bros.’ “Clash of the Titans” on April 2.

Digital conversion costs upwards of $70,000 per screen, with 3D add-ons totalling another $10,000 to $15,000.

DCIP is a joint venture formed in early 2007 that has executed long-term deployment agreements with studio majors. The consortium and JP Morgan had expected to close the line of credit more than 18 months ago, but the economic crisis stalled those plans.

The bank group providing financing included JPM, GE Capital, Sumitomo Mitsui Banking Corp., Barclays Bank, Credit Suisse, Morgan Stanley, Bank of America Merrill Lynch, Deutsche Bank and Citi.