5 more Imax theaters for Regal Cinemas
The latest agreement brings to seven the joint venture partnerships between Regal and Imax, and 21 the number of super-sized screens the U.S. multiplex operator has purchased for its circuit.
Regal last March inked an initial two-theater joint venture agreement for multiplexes in Portland and San Diego that lived up to its promise, according to Mike Campbell, CEO of parent Regal Entertainment Group.
"The early results have been very strong, prompting us to expand this relationship," Campbell said in a statement.
The latest Regal deal is also a boon to Imax's pending digital rollout.
The U.S. multiplex operator will install two Imax screens in Knoxville and Las Vegas by the end of 2007 with standard projection technology.
But the next three theaters slated for Seattle and two other unspecified western U.S. locations will install Imax's digital projection technology when it comes to market in 2008 or early 2009.
That represents for Imax the first North American order for its digital projection technology, now in the advanced stages of development.
The latest agreement will also enable Regal to eventually upgrade the proposed Knoxville and Las Vegas screens to digital from standard projection.
Imax co-CEO Bradley Wechsler said allowing film-based theater systems to swap out to digital in the future should bring comfort to rival exhibitors questioning whether to wait for Imax to go digital before doing their own joint-venture theater deals.
"That's the kernel in the deal that excites us the most, that it segues us into the digital world," Wechsler said.
Imax's joint-venture model -- considered a key driver to grow its international theater network -- calls for exhibitors to contribute an auditorium for retrofitting while Imax supplies the equipment.
Both partners then share the boxoffice returns under an agreed formula after they recoup their investments.
The joint venture model, where Imax shares in the risk of launching new theaters, departs from the traditional business of leasing or selling its systems, and getting a big wad of cash up front.
As of June 30, Imax has 290 large format theaters operating in 40 countries.