Sometimes these international buyouts of U.S. companies don’t quite go as expected…
Different customs and practices by the foreign buyer can bring eventual frustration and downright bitterness to the company being bought out. Remember Daimler-Benz and Chrysler?
Current American management may feel that they’re still in charge, but often times they’re really not. And that can be a hard pill to swallow.
Think I’m kidding?
Back in 1987 I was part of the management team of the now defunct Commonwealth Theatres, Inc. which was headquartered on film row in Kansas City. I was Commonwealth’s Director of Advertising, Publicity and Public Relations and we operated nearly 500 screens in more than a dozen states, many of which were twins, triplexes and fourplexes with about 100 were Drive-Ins.
In the greater Kansas City area we had, among others, the Ranch Mart, Bannister Mall, Metcalf, Antioch, Valley View, Trailridge and Crest and Riverside drive-Ins. Plus surrounding area theaters in Lawrence, Manhattan, Warrensburg, Junction City, Emporia, Sedalia, Clinton and Chillicothe.
Commonwealth, after a brief stint as a publicly traded company, had turned private again. But as these things sometimes go, current ownership wanted out and in 1987 found a buyer.
A foreign buyer.
It was THE CANNON GROUP, a film production company in Israel that had established a foothold in the U.S. with generally low-budget exploitation movies.
Its leaders, Menahem Golan and Yorum Globus, were known in the trade as "The Go-Go Boys."
Their plan was to expand Commonwealth to over 1,500 screens and accomplish it in a very short time frame.
I’ll never forget it.
Instead of holding our next annual managers meeting in Kansas City, Denver or Albuquerque, our new owners opted for Tel Aviv. I was to get the ball rolling, make the convention, flight and hotel arrangements and pretty much oversee the conclave.
To say I was overwhelmed is an understatement.
It never came off.
Cannon had overextended itself and six months later we had an Israel overseer placed in our K.C. office who first slashed jobs, then dramatically cut expenses. And we felt like we had to account for practically every box of paper clips.
In short, their traditional way of doing things sure didn’t match ours.
Commonwealth’s upper management here became mere puppets. It was a sad situation—and one that didn’t last much longer—as Cannon unloaded us to the United Artists circuit which eventually sold us off on a market by market basis.
By the time it was all over our home office staff of about 250 had shrunk to just 2-1/2 persons. Two full time and one part timer. I was among those last 2-1/2 souls.
So when I hear about China’s DALIAN WANDA GROUP buying out Apollo Investment, J.P. Morgan Partners, Bain Capital Investors, the Carlyle Group and Spectrum Equity Investors’ stake in AMC ENTERTAINMENT, I flash back to our buyout days and what eventually became of it.
Foreign ownership means different customs, traditions and and perceptions of business practices. It can make for unforeseen circumstances.
Today’s USA TODAY reporting on the deal from Beijing writes that Wang Jianlin, Chairman and President of Wanda, is "a Communist Party member who sits on his nation’s top advisory council."
USA TODAY also reports that the movie business there reflects the central contradictions of modern China, where the film world’s standard glamor and deal making must accommodate a ruling Communist Party that tightly controls what its citizens can watch. And that, "Beijing is investing heavily in projecting its ‘Soft Power,’ or cultural influence by boosting the Chinese state media’s presence abroad, including the USA, where the Chinese government has also run advertisements in New York’s Times Square."
AMC has a rich heritage and is a great motion picture exhibition company.
It’s expertise, knowledge and understanding of the business combined with Wanda’s desire to rapidly expand should make it the world’s top theater circuit.
And I wish them all the best under their new ‘East meets West’ company integration.
AMC as we know it is soon to cease.
Giddyup oom boppa Mao Mao
Why the need to BOLD Bain Capital. Is this Mitt Romney’s fault? Stan Durwood is spinning in his grave. Serves him right for running the hookers and rub and tugs out of downtown. Good news is we Americans can vote with our money. AMC chapped my ass with the move to Leawood, and now this. Fuck ’em. This will not go well on a number of levels. Watch for those subliminal messages in the new on screen ads.
Now, the chi-coms could make a power play and start funding movies with the understanding that their screens get them first. Get a couple of Lee Won Phucks with abacus sets counting the rice and they could have a HUGE impact on the movie industry.
When all is said and done this is gonna make Pearl Harbor look like a bad fart during Thanksgiving dinner
zzzzz
yeah…you know…I read both of these AMC stories in The Star this morning.
But thanks for the warmed-over rehash.
Great read Jack. Very interesting.
Get ready for a Chinese Leni Riefenstahl Left Wing Classic, “Triumph Of The Bill”, the Clinton Presidency.
The Chi-Coms intent is an enigma in an enigma at this point, but if they try to influence content, it will be an enema in an enema and like I always say, the enema of my enema is my friend.
Now go shoot an elephant in your pajamas.
Speaking of Chi Coms and Karl Marx Brothers Movies
I can see you standing over a hot stove, but I can’t see the stove.
Changes
10. Leawood home office forced to use Baidu for all Internet searches
9. Marketing Dept is expected bag bulk candy on Lunch hour for all screens.
8. All R rated scenes with nipples and pubic hair will be blurred out
7. Fried Dumplings and Cho Cho Chicken being tested in Olathe market
6. Plans in place to turn Metcalf South Mall into a 30 plex coupled with largest indoor minature golf course in the world.
5. Wang Jianlin goes on local spree and outbids the 2 gay guys for Jardines
4. Wanda aquires “Funny Bone” franchise and plans for World Class comedy club in Wyandotte County
3. Leawood employees rebel aganist 7 day work week…. peaceful demonstrations planned in front of California Pizza Kitchen
2. AMC in the Power and Light testing new Karaoke concept
1. Intermission is now mandatory on all AMC screens
@bschloz
Now I am gonna spend all day imagining what I would like to see on that miniature golf course at Metcalf South. I mean, ya know they got that fountain…
🙂
Jobs shall be cut,
whenever you have a buyout (ESPECIALLY FOREIGN) that is a certainty. The question is how many?
I like the possisbilities of #7, 5 and 2 in bscholz comment. Make it happen!
Good insight
Good insight into what’s goin down with AMC. Had angles all the other stories missed.
AMC is the already highest priced theatre chain in town. Not just ticket prices but concessions as well. I know the price of concessions has been discussed from top to bottom here but when the price of a small popcorn at AMC is SIX BUCKS, you won’t have to lean in to hear me laughing. I’ll be chuckling right on by the concession stand as I head straight back to the theatre with a big box of M&M’s sticking out of my back pocket that I bought at the QT across the street for 80% less than your AMC price. And you think I’m going to feel guilty about it now that AMC is Chinese-owned? Cue the Vincent Price laughter…