Two European exhibitors have moved to acquire assets of now defunct cinema circuits in Spain, eyeing new opportunities in the struggling Spanish theatrical market amid signs the market has bottomed out and conditions are finally beginning to improve.
Pan-European group Kinepolis has acquired two complexes in Madrid and Alicante from Abaco Cinebox, the two largest cinemas of the liquidated group comprising 28 screens in total. Kinepolis is already active in the Spanish market, to a relatively limited extent, and the new assets are therefore part of a wider expansion strategy. The new additions will bolster its screen count and market share in the territory. It plans to introduce some of its newer concepts to the new screens and look to improve operational costs.
French cinema circuit MK2, based in Paris, has also acquired nine cinemas of the former Cinesur group accounting for around 120 screens. There are two further cinemas in Malaga not part of the acquisition, which will be closed. For MK2 this represents the group’s first international foray joining a list of key exhibitors operating in more than one European territory such as Utopolis and Kinepolis. MK2 will therefore takeover the running of the majority of assets of the third largest circuit in Spain. UK’s Cineworld had previously been linked to Cinesur, which would also at the time have marked its first international acquisition. MK2 operates 11 venues with 65 screens in Paris. It will explore and create synergies between its Paris circuit and the new acquisition in Spain through programming options and cultural events.
The developments come as the Spanish market appears to have bottomed out from the crisis, which has seen total box office slump by over one third since 2008, a direct result of the difficult economic climate, a recent VAT hike on ticket prices and long standing youth unemployment. According to Rentrak, cinema admissions increased by 31 per cent from January to early June 2014, although the same uplift in revenue terms was only 13 per cent, attributed to cut price tickets. The deals show how exhibitors are now more optimistic of a recovery in the Spanish market and in doing so are looking to tap into new opportunities through various new strategies and concepts including programming and operational efficiencies.