At long last 3-D is finally rolling out to more theaters, which means great news for movie theater chains and studios who, with the technology, can charge more for tickets and pack theaters.
Friday Regal Entertainment closed 6.6 percent higher, while Cinemark Holdings added 6.4 percent. This comes on the news that JP Morgan will finance up to 15,000 digital cinema installations over the next five years at the three biggest theater chains, Regal, Cinemark, and AMC, which is private. Next week JP Morgan is sending out the briefing books for the $525 million financing - $325 million bank syndication and $200 million in equity from private equity funds and the theater chains themselves.
The digital systems will enable movies to be sent digitally, saving studios the hefty cost of the prints and shipping them around the country. In turn the studios have agreed to "virtual print fee deals," which effectively allows the studios to put their savings on print fees towards helping the theaters cover the costs of the new systems.