Rave Cinemas LLC, which agreed at the end of November to sell 32 of its theaters — including the three it owns in the Toledo area — to Cinemark Holdings Inc., said Monday that it expects the deal to close before the end of March.
“We’re anticipating the sale to finalize and close sometime in the first quarter. But there is no finalized date and things are still being worked out, but we are moving forward with trying to finalize the deal,” Danny DiGiacomo, a spokesman for Dallas-based Rave, said of the $240 million sale to Cinemark.
The deal, announced Nov. 16 and involving the sale of 32 theaters (for a total of 483 screens) in 12 states, remains in the midst of a federal Department of Justice review for potential anti-trust issues. Rave also is selling 16 theaters to Carmike Cinemas and 10 to AMC Theaters.
Beyond the federal review is the question of what becomes of the Rave theaters once the deal closes. Mr. DiGiacomo said those issues have yet to be worked out.
“Rave Cinemas LLC, as it stands, will close. But it’s possible that Cinemark might keep the Rave brand at the current locations because it may have some customer value,” he said. “Whatever happens, we are continuing our business as usual as Rave Cinemas until then,” he said.
The two companies have agreed thus far that any Rave gift cards will be honored by Cinemark well past the sale date. Mr. DiGiacomo said the two companies want the transition to be as smooth as possible. “We believe the impact should really be minimal, if at all,” he said.
With Rave the dominant theater chain in the Toledo area, controlling three theaters and 42 screens, area movie-goers probably are most concerned about ticket prices.
Plano, Texas-based Cinemark, which owns 19 theaters in Ohio, including the Woodland Mall Cinema 5 in Bowling Green, the Tiffin Mall 8 in Tiffin, and the Cinemark Stadium in Sandusky, tends to adjust its pricing by market.
In the Columbus suburb of Gahanna, for example, a weekend adult evening ticket is $7. In Aurora, in the Akron-Cleveland area, the price is $8.75, and in Boardman, a Youngstown suburb, it is $9.50.
Cinemark charges $11.25 to $13 in Ohio for 3-D movies, according to its Web site.
In the Toledo area, Rave has been charging $9.75 for a weekend adult evening ticket and as much as $13.50 for films in 3-D.
James Goss, an analyst with Barrington Research, said it is hard to know whether Cinemark will maintain Rave’s ticket pricing in the Toledo area. “Most of their acquisitions domestically were limited to just one major acquisition of Century [Theaters] in the western United States. Cinemark does have significant Latin American operations, but domestically, they have mostly grown internally,” he said.
But Cinemark, which operates 461 theaters with 5,207 screens in 39 U.S. states and is the nation’s third-largest cinema chain, is a “very hands-on operator,” Mr. Goss said. “It’s hard to say if they would make a lot of changes [in Toledo] and it’s hard to say if the changes they would make would be for the better,” he added.
Rave in 2010 spent $4.2 million on upgrades to its three Toledo-area theaters. Rave acquired the four largest Toledo-area theaters in 2009 from National Amusements Inc. and immediately set out to upgrade them. However, it closed and sold an 18-screen theater in Maumee. That property is now a church.
Mr. Goss said the good quality of Rave’s theaters could make it unlikely that Cinemark would change ticket pricing in the Toledo area.
“I’m not sure I know what they’d do, but speaking to Cinemark, their pricing is often less aggressive than other operators but I suppose it all comes down to a market-by-market basis,” he said. “But they are not typically the higher-priced product. They would rather … generate revenues by building on goodwill and through funding from concessions.”
Contact Jon Chavez at: email@example.com or 419-724-6128.
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