D-cinema group secures $660 million
Will finance rollout of systems for 14,000 movie screensExhibition's Big Three have their money.
Digital Cinema Implementation Partners said Wednesday that its $660 million loan syndication had closed. Led by JPMorgan Chase, the funding will be used to finance the rollout of d-cinema systems for 14,000 movie screens operated by the nation's three largest theater circuits: Regal, AMC and Cinemark.
Long stalled by a global credit crunch, the syndication process finally launched in the fall. D-cinema integrator Cinedigm and others are pursuing similar arrangements to fund the rollout of digital systems in smaller chains and independent theaters.
"We are excited that with the continued support of our owners, studio partners and financial advisers, we have completed this critical step in our process," DCIP chief Travis Reid said. "Over the next few years, we'll be aggressively implementing the transition to digital technology in theaters across North America. Guests will enjoy enhanced presentation and additional entertainment options at their favorite theaters as exhibitors and content providers capitalize on the flexibility enabled by digital technology, including many upcoming releases using digital 3D."
The bank financing was necessary to cover upfront capital costs of the digital rollout, but studios will cover exhibitors' system costs over the longer haul by making so-called virtual-print-fee payments to circuits after digital installations do away with actual print costs. Exhibs will carry the cost of adding 3D capability in many of the digital venues.
"The rollout of digital cinema is a historic milestone for our industry," Regal CEO Amy Miles said.
"AMC is a strong advocate of the industry's move to a digital platform," AMC topper Gerry Lopez stressed.
"The success of 3D reflects the potential of digital cinema," Cinemark chief Alan Stock said.