|[December 30, 2013]
National CineMedia (NCM) Restructures Ownership of Fathom Events
CENTENNIAL, Colo. --(Business Wire)--
National CineMedia, Inc. (NASDAQ: NCMI), the managing member and owner
of 46.0% of National CineMedia, LLC (NCM LLC), has signed a definitive
agreement with its founding member circuit partners AMC Entertainment
Inc. (NYSE: AMC), Cinemark Holdings, Inc. (NYSE: CNK) and Regal
Entertainment Group (NYSE: RGC) to restructure the ownership of its NCM
Fathom Events business.
Under the new corporate structure, Fathom Events will be owned and
managed by a newly formed stand-alone limited liability company with 32%
ownership by each of the three circuits (AMC, Cinemark and Regal) and
four percent ownership by NCM, LLC. In addition to the four percent
interest in the new company, NCM, LLC will receive 5% six year notes of
equal amount from each of the three circuits aggregating $25 million.
Interest on the notes will be paid annually with principal paid in equal
annual installments over six years. Due to the related party nature of
the transaction, NCM formed a committee of independent directors that
hired an investment banking firm who advised the committee and rendered
an opinion as to the fairness of the transaction.
Fathom will continue to be the home of high quality, affordable
entertainment events on the big screen under its new ownership
structure. Audiences get the best seat in the house - in the comfort and
convenience of the local movie theater - for live and pre-recorded
concerts, world-class opera, sporting events, comedy acts and original
programming featuring the biggest names in radio and television, with
many events including exclusive behind-the-scenes content and unique
extras, giving audiences unique experiences they can't see at home.
In order to ensure a smooth transition, NCM will continue to provide
certain operating, corporate overhead and event sponsorship sales
services to the new Fathom entity for up to nine months after closing.
This change in corporate structure is not expected to have any impact on
Fathom Events' business activities or business relationships with its
programming partners or Digital Broadcast Network affiliate theater
"NCM was always meant to be a launching pad for the Fathom Events
business, and with its successful start-up period now complete, this new
corporate structure positions Fathom for its next phase of development
and growth," said Kurt Hall, National CineMedia's chairman and CEO.
"This new ownership structure better aligns Fathom's industry-leading
consumer programming business with the cinema business, and also
provides for a stronger alignment of financial interests with our
theater circuit partners."
"The acquisition will allow us to program and promote Fathom events in a
more efficient manner on our screens. We feel we can enhance Fathom
through the introduction of special premieres and events utilizing
content produced and distributed by TV, cable and satellite divisions
owned by the major studios," said Tim Warner, Cinemark's CEO. "The
investments we have made in digital technology, including satellite
delivery, digital projection and digital sound will also enhance our
ability to utilize Fathom as a platform to introduce content on the big
"Fathom Events appeal to a variety of interests providing access to
world-class performances and special programming. By establishing a
dedicated organization focused on developing alternative content, we
will be able to offer Regal guests an even greater menu of entertainment
choices," stated Amy Miles, chief executive officer of Regal
About National CineMedia (NCM)
National CineMedia (NCM)
operates NCM Media Networks, a leading integrated media company reaching
U.S. consumers in movie theaters, online and through mobile technology.
NCM presents cinema advertising across the nation's largest digital
in-theater network, comprised of theaters owned by AMC Entertainment
Inc. (NYSE: AMC), Cinemark Holdings, Inc. (NYSE: CNK), Regal
Entertainment Group (NYSE: RGC) and other leading regional theater
circuits. NCM's theater advertising network covers 183 Designated Market
Areas® (49 of the top 50) and includes approximately 19,700 screens
(approximately 18,900 digital). During 2012, over 710 million patrons
attended movies shown in theaters in which NCM currently has exclusive,
cinema advertising agreements in place. NCM Digital offers 360-degree
integrated marketing opportunities in combination with cinema,
encompassing 41 entertainment-related websites, online widgets and
mobile applications. National CineMedia, Inc. (NASDAQ: NCMI) owns a
46.0% interest in and is the managing member of National CineMedia LLC.
For more information, visit www.ncm.com.
About AC JV, LLC
Fathom Events will be owned by a newly formed entity called AC JV, LLC.
Fathom is the recognized leader in the alternative entertainment
industry, offering a variety of one-of-a-kind entertainment events in
movie theaters nationwide that include live, high-definition
performances of the Metropolitan Opera, the performing arts, major
sporting events, music concerts, comedy series, Broadway shows, original
programming featuring entertainment's biggest stars, socially relevant
documentaries with audience Q&A and much more. Additionally, Fathom
events take audiences behind-the-scenes and offer unique extras -
creating the ultimate entertainment experience for fans of all ages.
Co-owned by the three largest movie theater circuits in the United
States, AMC Entertainment Inc. (NYSE: AMC), Cinemark Holdings, Inc.
(NYSE: CNK) and Regal Entertainment Group (NYSE: RGC), Fathom's live
digital broadcast network ("DBN") is the largest cinema broadcast
network in North America, bringing live events to more than 750
locations in 171 Designated Market Areas® (including all of the top 50).
For more information, visit www.fathomevents.com.
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