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Film

Director is a white knight for AMC

By STEVE PERSALL
Published April 7, 2006

LAS VEGAS

Of the many e-mails that poured in after a recent column about a bad day at a local movie theater, one of the first came from Peter Brown.

Brown is president, CEO and chairman of the board for AMC Entertainment Inc., overseeing North America's second-largest theater chain with 5,672 screens at 414 locations. In his e-mail, Brown seemed truly pained that I'd had to endure poor projection and poorer service correcting it. He asked me to contact him directly should I ever have such a problem again.

Which meant a lot, given that the incident happened at one of his theaters, AMC Veterans 24 in Tampa.

The effort went beyond mere damage control because it appeared genuinely sincere, as later e-mail exchanges and a face-to-face interview convinced me. That's reassuring, given that AMC controls nearly half of the Tampa Bay market's theater screens.

Good guys sometimes finish first, as Brown did recently when the National Association of Theater Owners named him ShoWester of the Year at its 32nd annual convention. It's an honor reserved for exhibition innovators such as Brown's mentor, Stan Durwood, who created the multiplex business model in the late 1960s and upgraded theaters to mega status in the 1990s.

Durwood was an old-school exhibitor, climbing from the lowest rungs of theater management to an industry leadership role. Brown's background is entirely financial: a University of Kansas business administration graduate specialized in banking, mergers and equity firms before joining AMC. Durwood was looking ahead when he hired Brown, at a time when theater acquisitions and expansion were becoming priorities.

As the firm's vice president and chief financial officer, Brown amassed a war chest of funds later used to construct a new wave of megaplexes and absorb competing theaters. When the theater industry took a nosedive in the late 1990s - AMC's stock was $1 per share at one point - Brown's restructuring made the company one of only two theater chains that avoided bankruptcy.

Durwood died of esophageal cancer in 1999 after hand-picking Brown as his successor.

During Brown's tenure, AMC revenues have nearly quintupled to $2.4-billion, with nearly 250-million tickets sold annually. Those numbers are expected to rise again with AMC's recent merger with Loews Cineplex Entertainment, moving Brown's company closer to the top spot among theater chains behind Regal Entertainment Group.

Meanwhile, Brown and his wife of 25 years, Kate, raised six children, and he became involved with numerous philanthropic and professional endeavors.

"Somehow he figured out how to get a 26-hour day out of 24 hours,'' AMC executive vice president Dick Walsh said at ShoWest.

Brown took a few minutes out at ShoWest to talk with me about the state of the movie industry, Tampa Bay's place in AMC's future and other topics of local interest, beginning with the the Loews merger's possible effect on theaters in Hillsborough and Pinellas counties. Here's what he had to say:

Will the Loews merger divert attention from handling the Tampa Bay market?

Oh, no, I don't think it will get less attention. We're constantly going through all the markets, looking at our existing facilities and any areas of growth in these markets, asking ourselves: Is there something that needs to be replaced or closed, and are there any growth opportunities? In some cases you close and don't open again.

That happened to Clearwater's two AMC multiplexes, leaving moviegoers without easy access to a movie theater.

Well, that's unfortunate. We don't ever want to do anything that upsets people, or makes them feel not good about us or where our thinking is. What always happens in business is there's an economic reality that stares you in the face.

One of the things that helped us navigate through an industry downturn in 1999 and 2000 was being proactive, closing theaters that we saw starting to underperform. Or, as we looked ahead at what would happen in the market with competitive building around us, we knew which AMC locations were going to turn down.

A lot of our competitors were planting a lot of seeds but weren't paying attention to the weeds that were growing. They ended up with a garden one day that had too many weeds. So they took a tiller and plowed the thing down to start over. We kind of tended as we went. I look at closings as never a good thing but often a necessary thing.

Might AMC expand in the Tampa Bay market, perhaps in Clearwater?

I don't generally comment on markets and plans. The Tampa Bay area is an important market. We're always looking for good opportunities, good growth areas with strong demographics.

(Address) the recent case of Matt Brown, a 19-year-old mentally challenged man ejected from AMC's Woodlands Square 20 for laughing too loud during a showing of The Pink Panther.

It was a very, very unfortunate situation. We approach our business as human beings first and foremost. We never want any patron having a bad time, whether it's Matt or anybody.

The reality of the world is that for whatever reason there's more unruliness or rude behavior than there has ever been. We're constantly attacking that with things like our Silence is Golden program. That's not just something I talk about; it's in our DNA. We have this expression: If you take care of the guest you don't have to worry about the rest.

When you play to 250-million people a year you're going to expect that you won't get it perfect every time. That's just impossible. But you can always try. That's what we do; we try.

Service often is left to minimum-wage employees. Is higher-quality service a casualty of the bottom line?

We try to hire folks with wide eyes, who'll look at you and smile and be engaged, and bolster that with training. I don't know if it's a casualty of the bottom line necessarily. I think it works, but it's like someone said: The biggest room in the company is the room for improvement. We know at any point in time we can get better.

Is better service more imperative after the box office slump of 2005?

It has to be constant. It isn't so much that you let your guard down and say: We're rolling in attendance so we'll worry less about it.

I think the economy played a role in our business in 2005. I'm talking specifically about the oil price spike. If you're spending two times for gasoline what you were spending a month before, you start to think about where you can tighten the budget.

Even when I started with AMC in 1991 there was this notion that it's a recession-resistant business. I don't know if that's true as much anymore, with these things competing for the leisure time dollar.

The word at ShoWest is that 2006 is finally the year when digital cinema projection begins taking hold in the industry. How long before it reaches AMC theaters in the Tampa Bay market?

Three years. That business plan is emerging, but what I think will happen is that it'll be marketwide deployment, not one or two particular theaters. I don't expect to have to close theaters down for that deployment.

Why shouldn't people think movie theaters are in trouble?

What we do can't be duplicated. Filmmakers craft their product to be experienced in movie theaters. Everything is driven by their vision of being on the big screen. The best-designed home theater system will never come close to matching the complete sensory experience of going to the movies.

With all the problems in theatrical exhibition, why do you do what you do?

My answer is simple and sincere: It's the opportunity to bring more enjoyment to more people. I truly love this business, because what it's really about at the end of the day is making more people happy. In all the businesses out there, that's a wonderfully spectacular thing to be able to do.

Steve Persall can be reached at (727) 893-8365 or persall@sptimes.com.

[Last modified April 6, 2006, 14:18:34]