On this edition of The Tech Table’s Shoppers Showcase, we look back at a historic merger that somewhat changed the cinema landscape: The merger of AMC Theatres and its competitor Carmike Cinemas.
Now for those of you who don’t know what AMC and Carmike are, let me give you the brief history on both companies…
A Brief History of AMC
AMC began its life in 1920 as Dubinsky Theatres, founded by the Dubinsky Brothers (Maurice, Edward, and Barney Dubinsky), after they acquired the Regent Theater on 12th Street in downtown Kansas City. They would later change their name to Durwood Theatres in the 1940s.
After Edward’s death in 1961, his son Stanley Durwood took control of the company, and under his reign opened the Parkway Twin in Kansas City, considered to be one of the first locations to pioneer the multiplex concept. Durwood Theatres would later be reincorporated as American Multi-Cinema in 1968; later renamed to AMC Theatres around the time they began trading in the stock market in the early 1980s.
The company would grow throughout the 80s and 90s, introducing North America’s first megaplex in 1995, followed by the world’s first 30-screen theater a year later. Stanley Durwood would pass away in 1999.
At the beginning of the 21st century, AMC began making multiple acquisitions of other theater chains, going from big to bigger. Here were the acquisitions AMC made prior to the Carmike merger:
- In March 2002, AMC acquired the bankrupt General Cinema Corporation.
- In December 2003, AMC acquired the small theater chain MegaStar Theatres.
- In January 2006, AMC engaged in a merger with Loews Cineplex Entertainment, which operated the Loews and Cineplex’s American theater chains, as well as Magic Johnson Theatres (named after former NBA pro player Magic Johnson), and the southeast Michigan-based Star Theatres.
- In January 2010, AMC acquired most of the assets of Kerasotes Theatres (also known as Kerasotes Showplace Theatres) for $275 million USD.
- In December 2015, AMC acquired Starplex Cinemas for $175 million USD.
- In November 2016, AMC acquired Odeon Cinemas and UCI Cinemas (except for Brazil) for $1.21 billion USD, forming a wholly owned subsidiary, Odeon Cinemas Group.
Since 2012, AMC has been majority owned by the China-based Wanda Group, who also owns the Australia-based Hoyts Group cinema chain, along with the production company Legendary Entertainment.
A Brief History of Carmike
Carmike Cinemas began its life in 1982, when Carl L. Patrick, Sr. acquired the Martin Theatres chain. The name “Carmike” is derived from Carl’s two sons: Carl Jr. and Michael.
Carmike would continue to expand throughout the 80s and 90s, acquiring other small theater chains, such as Fox Theatres and Maxi Saver Cinemas.
On August 9th, 2000, Carmike declared bankruptcy. They reemerged in January 2002, after restructuring the company, which involved closing and selling off some locations, some of which were of historical value at the time.
Since 2005, Carmike has acquired other theater chains, which includes the George Kerasotes Corporation, MNM Theatres, Muvico Theaters, and Sundance Cinemas.
On March 3rd, 2016, AMC Theatres announced it would acquire Carmike Cinemas for $1.1 billion USD. The acquisition was AMC’s second largest, and would make them overtake Regal as the largest theater chain in the United States.
The deal was closed on December 21st, 2016, with the merger being made official on their website in January of 2017:
“We’re thrilled to announce that Carmike Cinemas (which includes Wynnsong, Muvico, Ovation, and Sundance Cinemas) is now a part of the AMC Theatres family and we’re so excited to start this new chapter together.”
Now as with any big merger like this, there’s bound to be questions, with one of the biggest being this: What’s going to change?
Around the time of the acquisition’s completion, almost nothing changed immediately…on the consumer side at least. However, they did state that over the next several months, AMC plans to combine the best of what Carmike had to offer with the best of what they have to offer to “make the movie-going experience even more amazing“.
The proposed changes would come in the form of a new website, as well as renovated theaters, but for now the Carmike movie-goer could still use their loyalty reward points in their gift cards, and get all the other Carmike-exclusive offerings…for now.
In early February, two months after the Carmike merger was completed, AMC announced some big changes to the former Carmike locations: They were to be converted to AMC theaters under one of these three brands:
- AMC: These are the standard AMC theaters with recliners, MacGuffins bars, and at some locations, Dolby Cinema, IMAX and Prime.
- AMC Dine-In: An AMC theater with full kitchens, so you can get dinner while you’re watching your movie.
And finally, they introduced a new brand called AMC Classic, which utilizes pieces of what Carmike used to have.
What is AMC Classic?
Before I go over AMC Classic, you gotta love the modern take on the Carmike logo…
This is what AMC has to say regarding the introduction of AMC Classic on their website:
“AMC Classic brings you the best of times at affordable prices, offering you the same great atmosphere with a few new and fantastic editions. Get excited for new features on our food and beverage menu like our famous movie nachos, new soft pretzel bites, and fun Coke Freestyle
machines—filled with all your favorite fountain drinks. Catch the next hit movie while you make memories you’ll treasure, whether you’re spending your night at the movies with friends, family, or that special someone.”
Here are some of the features AMC Classic locations are offering:
- $5 tickets every Tuesday: If you’d like to save money, you can get movie tickets for $5 (plus tax) every Tuesday. It is exclusive to AMC Stubs members, and initially was only available at the former Carmike locations. As of April 2018 however, it now extends to ALL participating AMC locations, not just Carmike—this is good news to those who are fed up with the high cost of tickets.
- Annual Popcorn Buckets: Carmike is pretty famous for their annual popcorn buckets—you buy them, fill them up with popcorn, take it home after the movie was over, then when you’re ready to watch a movie again, bring it back to a Carmike theater, and have them refill the bucket for a single fee of less than $5 USD. That tradition is still continuing at any participating AMC Classic theater (and at select few normal AMC locations). Unfortunately, as of now, you still can’t bring your refillable bucket to a non-AMC Classic theater.
- And then of course, they’re gonna have the Coca-Cola Freestyle machines, where you can choose from over “100” different flavors. (Although it’s more like about 20 flavors, with the rest being syrup variations, if you look inside one of those machines.)
- All Carmike theaters would start accepting AMC Stubs members: The Carmike (as well as Sundance) loyalty programs were replaced by AMC Stubs following the introduction of the AMC Classic brand. AMC Stubs includes its own benefits, such as a free large popcorn refill, a free large popcorn on your birthday, and so on. All participating AMC locations also accepted Carmike gift cards during the transition.
So that’s really all I have to say about AMC Classic. As stated earlier, AMC planned to convert all the Carmike locations to either one of the three brands: AMC, AMC Dine-In, or AMC Classic, starting in February until April. (Although some locations took longer than others due to remodeling.) All Carmike signage (if any) were replaced with AMC signage, and some locations even got a complete overhaul inside and outside.
Why This Merger Was Important
So, what do I think of this merger, and what does this mean for the theater industry? From a consumer standpoint, it may not mean that much to me (although the $5 Ticket Tuesdays is pretty beneficial), although it may matter for some, like with any other merger. With this acquisition, AMC surpassed Regal as the largest theater chain in the United States.
But this merger also proves another point: Company mergers are becoming a hotter and debatable topic now:
- In June 2017, Yahoo, once the largest search engine before being overtaken by Google, was acquired by Verizon, with the remainders not acquired becoming Altaba, and the rest becoming part of a new division called Oath, later Verizon Media.
- In June 2018, AT&T acquired Time Warner for a staggering $85 billion USD (and then some), putting the Warner Bros. studio, HBO, and cable channels such as Cartoon Network under a telecommunications umbrella, similar to how Comcast purchased NBCUniversal back in 2012.
- The AMC-Carmike merger also proves that even competitors can get bought out; just look at the Disney-Fox merger: Disney and Fox were big competitors back in the 1990s and 2000s, up until Disney’s acquisition (not including the Fox television network for antitrust reasons) in March 2019.
- Most recently, on April 1st, 2020, T-Mobile US merged with Sprint, with T-Mobile becoming the surviving brand as of August 2nd, 2020.
And there are some more examples that I won’t bring up for time constraints, but it’s becoming quite a concern for some, and with good reason—within the next decade or so, I’d see everything being run by only a handful of large corporations; one such example is the American conglomerate Berkshire Hathaway, who not only owns Dairy Queen, but also Duracell, GEICO, and the BNSF Railway just to name a few. (And let’s not forget the MANY minority stakes in other big companies they hold.)
Since the AMC-Carmike merger, other than the $5 Ticket Tuesdays being implemented in all AMC locations, along with some unprofitable locations closing, not much has changed. However, with the COVID-19 pandemic and it decimating the movie theater industry, AMC is not in a good place right now, especially when streaming is starting to become the norm.
In response to the pandemic, the company temporarily closed all of its locations, with plans to reopen most of them later in August. Some smaller and unprofitable locations however, have possibly kicked the bucket, most likely to avoid a bankruptcy. And while AMC does have its own On Demand service, it’s nowhere near as big as what the Hollywood studios have with their services.
It’s unfortunately a sign of the times…