Cineplex Entertainment

Last updated

Cineplex Inc.
Formerly
  • Galaxy Entertainment
    (1999–2003)
  • Cineplex Galaxy (2003–2005)
  • Cineplex Galaxy Income Fund (2003–2011)
Company type Public
Industry
Predecessors
FoundedOctober 4, 1999;25 years ago (1999-10-04) (Galaxy Entertainment)
November 26, 2003;21 years ago (2003-11-26) (Cineplex-Galaxy) [1]
Founder Gerry Schwartz, Ellis Jacob and Stephen Brown
Headquarters
Number of locations
  • Theatres: 158
  • Screens: 1,631 [2]
Area served
 Canada
Products
RevenueIncrease2.svg CA$656.66 million(2021) [3]
Decrease2.svg – CA$84.29 million(2021)
Increase2.svg – CA$248.72 million(2021)
Total assets Decrease2.svg CA$2.11 billion(2021)
Total equity Decrease2.svg – CA$219.72 million(2021)
Number of employees
Over 13,000 (2019) [3] [4]
Divisions
Subsidiaries
[5]
Footnotes /references
[6]

Cineplex Inc. (formerly Cineplex Entertainment and Cineplex Galaxy) is a Canadian operator of movie theater and family entertainment centers, headquartered in Toronto. It is the largest cinema chain in Canada; as of 2019, it operated 165 locations, and accounted for 75% of the domestic box office. [7]

Contents

The company was formed in 2003 via the acquisition of Loews Cineplex's Canadian operations (which included the assets of the former Cineplex Odeon chain) by Onex Corporation and Oaktree Capital Management, and its subsequent merger with Onex's Galaxy Entertainment—a chain of cinemas that was established in 1999 by former Cineplex Odeon executives, and operated primarily in smaller markets. The company subsequently acquired Famous Players from National Amusements in 2005, went public in 2011, and acquired Empire Theatres' operations in Atlantic Canada and parts of Ontario in 2013. In December 2019, Cineplex agreed to be acquired by British exhibitor Cineworld Group for $2.8 billion, pending regulatory and shareholder approval, but Cineworld abandoned the sale in June 2020 due to unspecified breaches of the sale terms.

The company operates cinemas across Canada, primarily under the brand Cineplex Cinemas. Some flagship locations operate as Scotiabank Theatre, while some locations use brands carried over from its corporate predecessors (such as Famous Players, SilverCity, Odeon, and Galaxy, although some of them have since been converted to the Cineplex banner). The company also owns Family entertainment centers under the brands The Rec Room and Playdium, the rewards loyalty program Scene+ (in partnership with Scotiabank and the Empire Company), the e-commerce Cineplex Store, film distributor Cineplex Pictures and the digital advertising business Cineplex Media.

History

1912–1998: predecessors

Cineplex stakes a partial claim to the history of the Famous Players Film Company (later Paramount Pictures), founded in 1912 by Adolph Zukor, as Cineplex's earliest predecessor; [8] however, that company did not have any operations in Canada until 1920, when it bought Nathan Nathanson's Paramount Theatre chain, which Nathanson had established four years earlier. [9] [nb 1] Nathanson, the 5th richest person in the world, became the first president of the resulting entity, Famous Player Canadian Corporation. [10] In 1923, Famous Players bought out rival Allen Theatres, acquiring many buildings in the process. [11]

Odeon Theatres of Canada was established in 1941, before merging with the Canadian Theatres chain in 1978, becoming Canadian Odeon Theatres. [12]

In 1979, Garth Drabinsky and Nat Taylor created the Cineplex Corporation and opened its first "Cineplex" theatre complex, in the Toronto Eaton Centre. [8] Odeon merged with Cineplex in 1984 to form Cineplex Odeon Corporation, before being acquired by Loews Theatres in 1998, thereby becoming Loews Cineplex Entertainment.

1999–2004: early years

Cineplex Galaxy logo used from 2003 to 2005 Cineplex Galaxy.svg
Cineplex Galaxy logo used from 2003 to 2005

Galaxy Entertainment Inc. was established in 1999 by Ellis Jacob, a former chief operating officer of Loews Cineplex Entertainment, and Stephen Brown, a former Cineplex chief financial officer. With investments from Onex Corporation and Famous Players, the new company focused on smaller markets that were usually served by smaller theatres and old equipment, opening large, major chain-style locations under the Galaxy Cinemas banner. By 2003, Galaxy Entertainment had grown to 19 theatres and $75 million in box office revenue. [8]

In 2001, Loews Cineplex Entertainment (a 1998 merger of Universal Pictures' Cineplex Odeon and Sony's Loews Theatres) underwent bankruptcy due to the economic recession of the early 2000s. [13] In June 2001, Onex Corporation announced its intent to acquire Loews Cineplex; as part of the deal, Loews Cineplex would close 46 cinemas (including 25 in Canada), and Onex would acquire the company for $1.3 billion with Oaktree Capital Management as a partner. [14]

In November 2003, Loews Cineplex Entertainment's Canadian operations merged with Galaxy Entertainment as Cineplex Galaxy Income Fund. [15] The U.S. operations of Loews Cineplex were divested in 2004 to several investors including The Carlyle Group.

2005–2012: purchase of Famous Players, Cineplex Entertainment

SilverCity Richmond Hill Cinemas SilverCityCineplex2.JPG
SilverCity Richmond Hill Cinemas

On June 13, 2005, Cineplex Galaxy Income Fund announced its acquisition of Famous Players from Viacom for CA$500 million (about US$397 million). This deal was completed on July 22, 2005. To satisfy antitrust concerns, on August 22, 2005, the group announced the sale of 27 locations in Ontario and western Canada to Empire Theatres. [16] On June 21, Loews Cineplex announced that it would merge with AMC Theatres. [17] While AMC Theatres also operated in Canada and was ranked third behind Cineplex Galaxy and the enlarged Empire Theatres, Cineplex Odeon and AMC Theatres remained competitors. [18]

In October 2005, Cineplex Galaxy changed the name of its operating subsidiary Cineplex Galaxy LP to Cineplex Entertainment LP, to reflect their expanded operations. [19] On March 31, 2006, Cineplex sold seven more theatres in Quebec to Chelsea-based Fortune Cinemas. On June 29, 2007, Cineplex Entertainment announced its purchase of three Cinema City theatres in western Canada, consisting of two theatres in Winnipeg and one in Edmonton. [20]

As Cineplex no longer held the rights to the branding, the Paramount Theatres locations were rebranded as Scotiabank Theatre as part of a joint venture with Scotiabank to launch a new loyalty program. [21] [22]

With the bankruptcy of Fortune Cinemas, Cineplex Entertainment acquired (or in this case, re-acquired) some of Fortune Cinemas theatres. The Starcité Gatineau (Starcité Hull) and the Cavendish theaters were reopened as Cineplex Entertainment theatres.[ citation needed ]

In June 2012, as part of its exit from the Canadian market, AMC sold four of its Canadian cinemas to Cineplex, including the Yonge Dundas 24 at 10 Dundas East (Cineplex's original location and namesake), and the Forum in Montreal. [18] The company also earlier acquired the Tinseltown Movies 12 theatre from another American chain, Cinemark, in the Gastown neighbourhood of Vancouver.[ citation needed ]

Over the subsequent years, Cineplex expanded into advertising, events programming and a new concept, The Rec Room, amusement venues with live entertainment that serve food and drink. [23]

2013–2018: expansion, VIP Cinemas

Cineplex Cinemas Lansdowne & VIP in Ottawa opened in 2015. Cineplex Cinemas Lansdowne & VIP.JPG
Cineplex Cinemas Lansdowne & VIP in Ottawa opened in 2015.

In the 2010s, Cineplex began to deploy "VIP Cinemas" featuring reclining seats, in-seat meal services, and a licensed lounge. On August 15, 2014, Cineplex opened a dedicated VIP Cinemas Don Mills location, the first to be devoted solely to the format. [24] [25] By 2017, the company had also begun to retrofit selected non-VIP auditoriums to feature reclining seating. [26]

On June 27, 2013, the Empire Company announced that it would divest its Empire Theatres operations in order to focus on its real-estate assets and grocery chain Sobeys. Cineplex acquired 24 former Empire locations in the Atlantic provinces as well as 2 in Ontario, [8] for around $200 million (Landmark Cinemas acquired the remainder, predominantly in Western Canada and Ontario). [27] In February 2014, Cineplex announced that it had acquired Empire's planned Lansdowne Park location in Ottawa, and would construct a new 10-screen cinema at the site with three VIP screens. [28]

2019–present: attempted acquisition by Cineworld

Ticket kiosks at Cineplex Fairview Mall (formerly SilverCity) Cineplex Cinemas Fairview Mall - 20200115.jpg
Ticket kiosks at Cineplex Fairview Mall (formerly SilverCity)

On December 16, 2019, Cineplex announced a definitive agreement to be acquired by the British cinema operator Cineworld Group, the second-largest film exhibitor worldwide, [29] pending shareholder and regulatory approval. Cineworld would be paying $34 per-share—a 42% premium over Cineplex's share price prior to the announcement, valuing the company at CDN$2.8 billion. Cineworld planned to pay US$1.65 billion, and to fund the remainder by taking on debt. [30] [29]

Combined with its ownership of the 564-location Regal Cinemas chain in the United States (which it had acquired the previous year), the sale would have made Cineworld the largest cinema chain in North America. [30] Cineworld stated that it planned to integrate Cineplex's operations with those of Regal, [30] while maintaining Cineplex's banners for its Canadian operations. [31] The company also stated that it planned to reach $120 million in cost efficiencies and revenue synergies (including the adoption of a subscription service scheme similar to Regal and Cineworld) by the end of fiscal year 2020. [30]

The sale was approved by Cineplex shareholders in February 2020. [31] Activist shareholder Bluebell Capital Partners called for the Canadian government to block the sale due to the COVID-19 pandemic, [32] which in turn led to the temporary closure of all Cineplex properties for several months starting on March 16. [33] In May, Cineplex stated that Cineworld planned to complete the sale by June 2020, provided that it received federal approval under the Investment Canada Act , and that it met the terms of the sale agreement (including its debt not exceeding $725 million). [34]

On June 12, 2020, Cineworld abandoned the purchase, alleging that Cineplex had engaged in conduct that breached unspecified terms of the sale, and that the company had experienced a "material adverse effect" of an unspecified nature. Cineplex denied the claims and made counter-allegations. The agreement with Cineworld included a condition that the latter would pay a penalty in case it decided to cancel the deal. [35] In February 2021, CEO Ellis Jacob offered to temporarily convert Cineplex facilities into COVID-19 vaccination sites. [36] In July, Cineplex started legal action against Cineworld claiming financial damages and Cineworld counter-sued. [37]

In December 2021, the Ontario Superior Court of Justice ruled in favour of Cineplex, and ordered Cineworld to pay US$1 billion in damages for breach of contract. The company planned to appeal the ruling; Cineworld's shares fell by 40% in the immediate aftermath of the ruling. [38] In September 2022, it was reported that the United States Bankruptcy Court for the Southern District of Texas had denied the appeal, amid Cineworld's Chapter 11 bankruptcy. [39] [40] It was also reported by The Wall Street Journal that Cineplex was exploring the possibility of a separate merger with Regal. [41] [40]

Operations

Theatre chains

Cineplex Entertainment operates 158 theatres as of Q4 2024. [42] [2] These locations use several brand names:

  • Cineplex Cinemas and Cineplex Odeon (94 locations combined)
  • Cineplex Junxion (2 locations)
  • Cineplex VIP Cinemas (4 standalone locations)
  • Famous Players (3 locations)
  • Galaxy Cinemas (30 locations)
  • Scotiabank Theatre (10 locations)
  • SilverCity and StarCité (14 locations combined)

Cineplex Cinemas (French : Cinémas Cineplex) is the company's main banner. Many locations use the older Cineplex Odeon branding, but otherwise operate in the same manner. Among the two brands, 21 locations also feature a VIP Cinemas section. The Scotiabank Theatre brand operates in partnership with Scotiabank, and it represents premium theatre locations. The Galaxy Theatres brand is primarily used by small and medium-market locations, although some have since been converted to the Cineplex Cinemas banner.

The Cinema City brand is used at one location in Winnipeg's Garden City area that predominately shows second-run films. In 2012, the former Cinema City McGillivray in Winnipeg was renamed to Cineplex Odeon McGillivray and VIP Cinemas, and its lineup was changed to first-run films. The Cinema City Movies 12 in Edmonton closed on January 8, 2023, due to age and unpopularity, and the Cineplex Cinemas Manning Town Centre up north outperformed it as well.

Other acquisitions from Cineplex include The Beach Cinemas from Alliance Cinemas. This location was rebranded to Cineplex Cinemas Beaches. In 2013, Cineplex acquired two Festival Cinemas locations (Fifth Avenue Cinemas and The Park Theatre) that were previously owned by Alliance. The Fifth Avenue location operates similarly to a VIP Cinemas location. These locations retain their original name.

Selected banners originating from Famous Players are still used by some locations: Famous Players, SilverCity and StarCité. However, many former Famous Players and SilverCity locations have been replaced by Cineplex Cinemas. This is also true for the Coliseum (French : Colisée) and Colossus brands, although these brands' unique architectural features have been preserved.

Premium formats

Selected Cineplex locations offer including large-screen formats, motion seats, and VIP for a higher ticket price. Following the premiere of Star Wars: The Force Awakens in 2015, Cineplex reported that at least 80% of customers watched the film with one of its premium formats, and 40% of the company's overall box office revenue came from premium formats. [43]

Arcades and amusement

Arcades at Cineplex locations are primarily operated under the branding Xscape Entertainment Centre; the brand was first introduced in June 2009, and has since been deployed at 83 locations as of September 2024. [62] [63] Early Xscape locations (such as SilverCity CrossIron Mills near Calgary) were also built with licensed lounges and party rooms, but most of the later builds have been designed as redemption-oriented refurbishments or conversions of existing space. [63] In 2017, Cineplex began to expand the Xscape brand internationally, beginning with two standalone Xscape arcades at the Mall of America in Bloomington, Minnesota. [64] Cineplex arcades in Prince Edward Island and Newfoundland and Labrador, and at other locations that have not adopted the Xscape format, use the brand Cinescape Games. [65]

In January 2015, Cineplex announced The Rec Room, an entertainment restaurant chain similar to the U.S.-based chain Dave & Buster's. The Rec Room targets a young adult demographic, with its locations featuring restaurants and bars, arcade and recreational game areas, simulators, and an auditorium equipped with a cinema-style screen. [66] Cineplex CEO Ellis Jacob explained that the chain is meant to help the company diversify beyond its core cinema business in the wake of the growing streaming industry, [67] The first location opened in Edmonton, Alberta on September 19, 2016, at the South Edmonton Common. A second location in Toronto, Ontario at Roundhouse Park opened in June 2017, [68] followed by a third location at the West Edmonton Mall. [69] The chain consists of 10 locations across Canada since the end of 2021.[ citation needed ]

Cineplex owns Playdium, an arcade and family entertainment centre chain focused on children and teens. The chain first launched in 1996 in Mississauga, Ontario. In 1997, Playdium partnered with Famous Players to operate arcades at its locations under the brand TechTown. [70] [71] It expanded to four locations by June 1999, including Toronto, Edmonton and Burnaby. The Toronto location closed in 2002, and by the end of 2004, only the Mississauga location remained, which permanently closed on November 1, 2020. The chain was relaunched with two Ontario locations in 2019: Brampton on September 16, retrofitting the Cineplex Odeon Orion Gate theatre, [72] [73] and Whitby on November 4. A third Playdium location opened in Dartmouth, Nova Scotia on February 20, 2021. Cineplex aims to have 10 to 15 Playdium locations across Canada.[ citation needed ]

In 2022, Cineplex launched Cineplex Junxion, a new cinema banner incorporating elements from The Rec Room's concept. The first Cineplex Junxion opened at Kildonan Place in Winnipeg in December 2022, succeeding the existing Famous Players location at the same site. [74] Another location at Erin Mills Town Centre in Mississauga opened on May 17, 2023. [75]

Virtual reality

D-Box VR theatre at Xscape in Scotiabank Theatre Ottawa Xscape at Scotiabank Theatre Ottawa.jpg
D-Box VR theatre at Xscape in Scotiabank Theatre Ottawa

In November 2017, an IMAX VR centre opened at Scotiabank Theatre Toronto as IMAX VR's first location in Canada. The following month, a D-Box VR experience launched at the Ottawa location. [76] [77] The IMAX VR centre closed in 2019, as part of the discontinuation of the IMAX VR pilot project. [78]

In July 2018, after having opened such an attraction at The Rec Room at Roundhouse Park, Cineplex Entertainment announced that it had reached an agreement to be the exclusive Canadian franchisee of The Void — a chain of mixed reality entertainment attractions. [79]

On September 13, 2018, Cineplex announced that it would acquire a stake in VRStudios—a Seattle-based provider of virtual reality installations, and utilize its equipment for as many as 40 VR centres across the country. [80]

Scene+

Launched in 2007, Scene+ is an entertainment rewards program jointly owned by Scotiabank and Cineplex Entertainment.[ citation needed ]

Food and beverages

Food bar in Cineplex Cinema Mississauga Cineplex Cinema Mississauga Lobby 2022.jpg
Food bar in Cineplex Cinema Mississauga

Cineplex has an Outtakes (French : Restoplex) restaurant in many of its theatres, some which replace previous restaurant partners (Burger King, KFC Express, Pizza Pizza/Pizza 73, Pizza Hut Express, Taco Bell Express and New York Fries) and others which introduce restaurants at locations which did not previously feature one. VIP Cinemas and some Xscape locations feature a licensed lounge with more premium offerings compared to Outtakes.[ citation needed ]

Poptopia is a flavoured popcorn restaurant offered in a full-service format at 22 locations. Other Cineplex theatres may feature Poptopia at the concession stand, but only in the caramel corn and/or kettle corn flavours.[ citation needed ]

Ice cream at Cineplex locations debuted with Baskin-Robbins and TCBY. Beginning in December 2007, Yogen Früz became the preferred partner. [81] On January 1, 2014, Cineplex acquired a 50% stake in Yoyo's Yogurt Café. [82] As of January 2017, 77 Cineplex theatres feature Yoyo's restaurants, while Yogen Fruz is still available in 23 Cineplex theatres while TCBY is available in 16 locations. [83]

Beverages are available in both cold and hot formats. Cold beverages include the Coca-Cola lineup, which replaced the Pepsi lineup used at locations formerly owned by Famous Players. 12 locations feature Coca-Cola Freestyle. [84] Hot beverages include Starbucks as the incumbent provider with 105 locations, [85] all which offer Pike Place Roast coffee (regular or decaf) and Tazo tea. Select locations also offer premium drinks such as caffè mocha or caramel macchiato. Tim Hortons is available as a full-service restaurant in five locations, [86] with Brossard being the only location to offer both Tim Hortons and Starbucks. [87]

In most theatres, Cineplex offers sale of alcohol to 19+ patrons in Ontario (18+ in Alberta) similar to the VIP theatres albeit from a selection of beer or cider beverages.[ citation needed ]

Corporate governance

The current[ when? ] Chief Executive Officer and President of Cineplex Entertainment is Ellis Jacob. Alongside with Jacob are Jordan Banks who serves as a Facebook executive, Robert Bruce, Joan Dea, Ian Greenberg, the founder of Astral Media, Sarabjit S. Marwah, Anthony Munk, Edward Sonshine, Christopher Medlock, Robert J. Steacy and Phyllis Yaffe, who serves as its chair.

Criticism and controversy

The Motley Fool described Cineplex as having a "virtual monopoly" over the cinema market in Canada. [88]

In 2012, a class-action lawsuit was filed against Cineplex over locations refusing to honour the company's "Cheap Tuesdays" promotion. The company agreed to a $7,000 settlement, including a $25,000 charitable donation. [89] [90]

In 2019, the producers of the anti-abortion film Unplanned criticized Cineplex for initially declining to pick up the film after securing a Canadian distributor. They felt it amounted to an effective "ban" of the film from Canada due to the company's scale. The film's co-director Cory Solomon also, along with other anti-abortion activists and religious groups, called for a boycott of Cineplex. The company later announced that it would— joining competitor Landmark Cinemas and a handful of independent cinemas — screen Unplanned with a one-week limited release at 24 Cineplex locations. The decision was praised by opponents of abortion, but did lead to criticism from abortion-rights (pro-choice) groups due to disputes over the film's content (with the Alberta Pro-Choice Coalition stating that it planned to hold a peaceful protest outside Scotiabank Theatre Chinook Centre). The film itself had already attracted criticism from groups, such as the Abortion Rights Coalition of Canada, over its factual accuracy, with the Coalition describing it as "American propaganda". [91] [92] [93] [94] [95]

During the 2019 Toronto International Film Festival, festival organizers stated that Cineplex would no longer allow films distributed by an online video service (such as Prime Video or Netflix) to be screened at the Scotiabank Theatre Toronto (which has been considered the "primary" venue of the event for major screenings) due to company policy, as the services do not adhere to industry-standard theatrical windows. ScreenDaily stated that this was "believed to be the first time an exhibitor’s position on theatrical windowing has affected scheduling at a major film festival". [96] [97]

On September 23, 2024, the Competition Tribunal ordered Cineplex to pay a $38.9 million fine for deceptive marketing practices. Cineplex added a $1.50 surcharge on all online ticket orders since June 2022, but used dark patterns to hide this fee from listed ticket prices until the end of the transaction. [98] [99] In October 2024, Cineplex appealed the decision to the Federal Court of Appeal. [100]

See also

Notes

  1. ↑ The Canadian "Paramount Theatre" chain was not affiliated with the American chain with the same name.

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