AMC plans two brands for theaters after Carmike deal

AMC Entertainment plans to run two brands for its expanded chain of movie theaters following the purchase of U.S. rival Carmike Cinemas, AMC’s chief executive said Monday.

Adam Aron said a second brand would house theaters that have less customer traffic and lower prices than typical AMC Theatres.

He did not offer a second brand name but said many Carmike and Starplex Cinemas theaters, which AMC acquired last year, would become second-brand sites. Some Carmike theaters would become AMC sites, Aron said.

The idea of a two-brand strategy is to marry moviegoers’ expectations with the theater name on the ticket stub.

“By having the second brand, they don’t bring down the mothership AMC brand,” Aron said of smaller, lower-cost theaters.

AMC expects to complete its $1.2 billion purchase of rival Carmike after a Carmike shareholder vote on Nov. 15 and a review by the U.S. Department of Justice. A final date on the deal could come as early as December but could stretch into next year, Aron said.

Although there were objections to AMC’s original deal to buy Carmike, a higher price tag has resolved those and Carmike shareholders are expected to accept the $33.06 a share deal. AMC also expects to sell a few theaters to meet concerns the Department of Justice may have about the merger that will make AMC the largest chain in the nation.

The Leawood-based chain also is buying Europe’s largest theater chain, Odeon & UCI Cinemas, in a separate $1.2 billion transaction.

AMC has been upgrading seating, concessions and other amenities, including installing kitchens and bars, in some U.S. theaters to boost attendance and revenues. It plans to extend the same strategies to the chains it is buying in theaters where the additional investment will make sense financially.

Those efforts in the U.S. chain helped lift profits in the third quarter to more than double what they were a year earlier and boosted revenues by 13.2 percent, the company said Monday.

AMC Entertainment Holdings Inc. said it earned $30.4 million, or 31 cents a share, compared with $12.2 million, or 12 cents a share, a year earlier. Revenues of $779.8 million marked a record for July, August and September, the Leawood-based company’s announcement said.

Monday’s report follows a preliminary report on the quarter two weeks ago. AMC released ranges for its revenues and profits in connections with a $1.4 billion private sale of debt. The money will be used for AMC Entertainment’s purchase of Carmike and Odeon & UCI.

The third quarter brought a 12.6 percent increase in admissions revenues, AMC said, as well as a 14.8 percent increase in food and beverage revenues.

AMC Theatres is holding election night events with CNN coverage on big screens at theaters in 25 cities, including Kansas City. Members of its Stubs loyalty program and guests can take part in a “Blue” election night watch for Democrats at the AMC BarryWoods 24 complex in Kansas City north of the river. The “Red” election night event for Republicans is at AMC Studio 28 in Olathe.

This story was originally published November 7, 2016 at 3:59 PM with the headline "AMC plans two brands for theaters after Carmike deal."