Theaters Close To Receiving Money To Convert To Digital
After years of delay due mostly to the credit crisis, movie studios and theater chains are close to securing about $650 million in financing to convert theaters from film to digital, Reuters reported today (Thursday), citing a source familiar with the matter. The wire service said a deal could be announced as early as Friday between Regal Theaters, AMC, and Cinemark, who formed Digital Cinema Implementation Partners, and an investment group headed by Blackstone Group and JPMorgan Chase. The crux of the arrangement is that theaters who borrow money to install digital projectors, typically at a cost of $70,000 to $100,000, would receive a "virtual print fee" from the studios for each movie screened on the new equipment. In other words, if a studio would have had to pay $1,500 for a print for the theater, it would pay that money to the theater directly until the cost of the digital equipment is recovered.