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Cineplex takeover makes sense as pressure from streamers mounts – Financial Post

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Cineplex Inc. has agreed to be bought by British theatre chain Cineworld in a $2.8-billion deal that, if approved, would create the largest cinema empire in North America, the company announced on Monday.

Cineplex is the dominant theatre banner in Canada, with a 75 per cent share of the box office. But at 1,700 screens, it’s a relatively minor player compared to a giant like Cineworld. In an industry in which streaming services are weaning studios off their dependence on cinemas, joining a giant could be the right move for Cineplex, analysts suggested Monday.

The Cineworld Group plc offer, which values Cineplex at $34 a share, would boost Cineworld’s screen count to more than 8,900 screens in North America, surpassing AMC and making it the largest cinema circuit on the continent, Cineworld chief executive Moshe Greidinger told investors on a conference call.

Cinemas have been struggling to hold on to their right to screen films exclusively for several months before they’re shown on other platforms. With studios such as Disney running their own streaming services, the pressure to shrink the theatrical window will grow, said Sam La Bell, head of research at Veritas Investment Research.

“You want to have enough bargaining power with the studios so you can have sway,” he said. “The bigger you are, the more bargaining power you have.”

The deal needs to clear several hurdles before it is approved, including a seven-week period during which Cineplex can solicit competing offers. But analysts didn’t have high expectations for the go-shop phase.

“We believe that this transaction is most likely the end game,” CIBC analyst Robert Bek wrote in a research note. “There is low probability that a white knight will step in with a competing bid, however this scenario is not off the table.”

The deal also needs regulatory approval in Canada, two-thirds approval from Cineplex shareholders, and approval from a simple majority of Cineworld shareholders. Cineworld says it already has assurances from its largest shareholder, which owns a 28 per cent stake.

We don’t see any deal threats to the deal, just some baggage to drag across the line

Robert Bek, analyst, CIBC

“While current market share of Canadian box office at 75-per-cent-plus may lead to anti-trust scrutiny from the regulatory body, we don’t see any deal threats to the deal, just some baggage to drag across the line,” Bek wrote.

If the deal goes through, Greidinger said he will roll out Cineworld’s Unlimited subscription plan in Canada, allowing moviegoers to watch as many films as they want for a monthly fee.

“The success of Unlimited is really indisputable,” Greidinger said.

After closing at about $24 on Friday, Cineplex shares soared following the acquisition announcement Monday, closing at $33.96 — just below Cineworld’s offer. The $2.8 billion transaction value includes the assumption of net debt, Cineplex said.

“Given Cineplex’s recent share price underperformance, valuation and high-quality asset mix … we are not entirely surprised,” RBC analyst Drew McReynolds wrote about the deal.

Amid turbulence in the business, Cineplex has taken strides to diversify itself, entering the restaurant sector with its Rec Room chain of pub-arcade hybrids. It also runs the Playdium arcade chain and an arcade-equipment rental business. On the movie side, Cineplex has added a slate of premium screening options — VIP theatres, enhanced viewing experiences such as UltraAVX and 4D — to distinguish itself from the experience of watching at home, allowing the company to extract more revenue from a shrinking audience base, La Bell said.

While Greidinger spoke positively about Cineplex’s non-theatre businesses on Monday, analysts questioned how long they’d last after the entirely debt-financed deal.

“Asset sales are probably in the mix,” Le Bell said, suggesting that Cineworld will be motivated to pay down debt and might not be interested in staying in the restaurant business. Greidinger, however, noted that Cineplex’s arcade supplier sends equipment to other theatres in the Cineworld network.

He said Cineworld is expecting to realize US$130 million in cost savings after the purchase.

“Consolidation is a part of the life today,” Greidinger said, adding that the number of screens in his empire “is not what counts.” What counts, he said, is “cash flow and the profit.”

Theatres are ultimately competing for attention, said Kaan Yigit, president and research director at Solutions Research Group Consultants Inc. That means they’re not just up against streaming services.

“So if you want to compete for attention with that scale/size, you either have to be a narrow specialist or of a certain size yourself,” Yigit said in an email.

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What Difference Will You Make to an Employer?

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6 hours ago

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October 21, 2024

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Ex-Employer (Job)

It’s common knowledge that companies don’t hire the most qualified candidates. Employers hire the person they believe will deliver the best value in exchange for their payroll cost.

Since most job seekers know the above, I’m surprised that so few mention their Employee Value Proposition (EVP). Most job seekers list their education, skills, and experience without substantiating them and expect employers to determine whether they can benefit their company; hence, most resumes and LinkedIn profiles are just a list of opinions—borderline platitudes—that are meaningless and, therefore, have no value. Job seekers need to better explain, along with providing evidence, how they’ll contribute to an employer’s success.

Employers don’t hire opinions (read: talk is cheap); they hire results.

You’re not offering anything tangible when you claim:

 

  • I’m a great communicator.
  • I’m detail oriented.
  • I’m a team player.

 

Tangible:

 

  • “At Global Dynamics, I held quarterly town hall meetings with my 22 sales reps, highlighting our accomplishments, identifying opportunity areas, and recognizing outstanding performers.”
  • “For eight years, I managed Vandelay Industries IT department, overseeing a staff of 18 and a 12-million-dollar budget while coordinating cross-specialty projects. My strong attention to detail is why I never exceeded budget.”
  • “While working at Cyberdyne Systems, I was part of the customer service team, consisting of nine of us, striving to improve our response time. Through collaboration and sharing of best practices, we reduced our average response time from 48 to 12 business hours, resulting in a 35% improvement in customer feedback ratings.”

 

These examples of tangible answers provide employers with what they most want to hear from candidates but rarely do; what value the candidate will bring to the company. Typically, job seekers present their skills, experience, and unsubstantiated opinions and expect recruiters and employers to figure out their value, which is a lazy practice.

Getting hired isn’t based on “I have an MBA in Marketing and Sales,” “I’ve been a web designer for over 15 years,” “I’m young, beautiful and energetic,” blah, blah, blah. Likewise, being rejected isn’t based on “I’m overqualified,” “I’m too old,” “I don’t have enough education,” blah, blah, blah. Getting hired depends entirely on showing employers that you can add value and substance to their company; that you’ll serve a purpose.

When you articulate a solid value offer, the “blah, blah, blah” doesn’t matter. Job seekers focus too much on the “blah, blah, blah,” and when not hired, they say, “It’s not me, it’s…” The biggest mistake I see job seekers make is focusing on the “blah, blah, blah”—their experience and education—believing this is what interests employers. Hiring managers are more interested in whether you can solve the problems the position exists to solve than in your education and experience.

 

Not impressive: Education

Impressive: A track record of achieving tangible results.

 

You aren’t who you say you are; you are what you do.

 

If you want to be somebody who works hard, you have to actually work hard. If you want to be somebody who goes to the gym, you actually have to go to the gym. If you want to be a good friend, spouse, or colleague, you have to actually be a good friend, spouse, or colleague. Actions build reputations, not words.

The biggest challenge job seekers face today is differentiating themselves. To stand out and be memorable, don’t be like most job seekers, someone who’s all talk and no action. Any recruiter or hiring manager will tell you that the job market is heavily populated with job seekers who talk themselves up, talk a “good game” about everything they can “supposedly” do, drop names, etc., but have nothing to show for it.

More than ever, employers want to hear candidates offer a value proposition summarizing what value they bring. If you’re looking for a low-hanging fruit method to differentiate yourself, do what job seekers hardly ever do and make a hard-to-ignore value proposition.

  1. Increase sales: “Based on my experience managing Regina and Saskatoon for PharmaKorp, I’m confident that I can increase BioGen’s sales by no less than 25% in Winnipeg and the surrounding area by the end of 2025.”
  2. Reduce cost: “During my 12 years as Taco Town’s head of purchasing, I renegotiated contracts with key suppliers, resulting in 15% cost savings, saving the company over $450,000 annually. I know I can do the same for The Pasta House.”
  3. Increase customer satisfaction:“During my time at Globex Corporation, I established a systematic feedback mechanism that enabled customers to share their experiences. This led to targeted improvements, increasing our Net Promoter Score by 15 points. I can increase Dunder Mifflin’s net promoter score.”
  4. Save time: “As Zap Delivery’s dispatcher, I implemented advanced routing software that analyzed traffic patterns, reducing average delivery times by 20%. My implementation of this software at Froggy’s Delivery can reduce your delivery times by at least 20%, if not more.”

 

If you want to achieve job search success as soon as possible, structure your job search with a single thread that’s evident and consistent throughout your résumé, LinkedIn profile, cover letters and especially during interviews; clearly convey what difference you’ll make to the employer.

_____________________________________________________________________

 

Nick Kossovan, a well-seasoned veteran of the corporate landscape, offers “unsweetened” job search advice. You can send Nick your questions to artoffindingwork@gmail.com.

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Netflix’s subscriber growth slows as gains from password-sharing crackdown subside

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4 days ago

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October 17, 2024

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Netflix on Thursday reported that its subscriber growth slowed dramatically during the summer, a sign the huge gains from the video-streaming service’s crackdown on freeloading viewers is tapering off.

The 5.1 million subscribers that Netflix added during the July-September period represented a 42% decline from the total gained during the same time last year. Even so, the company’s revenue and profit rose at a faster pace than analysts had projected, according to FactSet Research.

Netflix ended September with 282.7 million worldwide subscribers — far more than any other streaming service.

The Los Gatos, California, company earned $2.36 billion, or $5.40 per share, a 41% increase from the same time last year. Revenue climbed 15% from a year ago to $9.82 billion. Netflix management predicted the company’s revenue will rise at the same 15% year-over-year pace during the October-December period, slightly than better than analysts have been expecting.

The strong financial performance in the past quarter coupled with the upbeat forecast eclipsed any worries about slowing subscriber growth. Netflix’s stock price surged nearly 4% in extended trading after the numbers came out, building upon a more than 40% increase in the company’s shares so far this year.

The past quarter’s subscriber gains were the lowest posted in any three-month period since the beginning of last year. That drop-off indicates Netflix is shifting to a new phase after reaping the benefits from a ban on the once-rampant practice of sharing account passwords that enabled an estimated 100 million people watch its popular service without paying for it.

The crackdown, triggered by a rare loss of subscribers coming out of the pandemic in 2022, helped Netflix add 57 million subscribers from June 2022 through this June — an average of more than 7 million per quarter, while many of its industry rivals have been struggling as households curbed their discretionary spending.

Netflix’s gains also were propelled by a low-priced version of its service that included commercials for the first time in its history. The company still is only getting a small fraction of its revenue from the 2-year-old advertising push, but Netflix is intensifying its focus on that segment of its business to help boost its profits.

In a letter to shareholder, Netflix reiterated previous cautionary notes about its expansion into advertising, though the low-priced option including commercials has become its fastest growing segment.

“We have much more work to do improving our offering for advertisers, which will be a priority over the next few years,” Netflix management wrote in the letter.

As part of its evolution, Netflix has been increasingly supplementing its lineup of scripted TV series and movies with live programming, such as a Labor Day spectacle featuring renowned glutton Joey Chestnut setting a world record for gorging on hot dogs in a showdown with his longtime nemesis Takeru Kobayashi.

Netflix will be trying to attract more viewer during the current quarter with a Nov. 15 fight pitting former heavyweight champion Mike Tyson against Jake Paul, a YouTube sensation turned boxer, and two National Football League games on Christmas Day.

The Canadian Press. All rights reserved.

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All Magic Spells (TM) : Top Converting Magic Spell eCommerce Store

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October 17, 2024

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