SkyCity Entertainment Group chief executive Nigel Morrison said the company was focused on bringing pedestrian traffic to its casino business. Photo / Brett Phibbs
SkyCity Entertainment bosses will be celebrating their exit from cinemas but have not ruled out revisiting the movie business.
Chief executive Nigel Morrison this week announced the sale to Amalgamated Holdings - Australia's biggest cinema exhibitor with more than 1300 screens internationally.
In Australia, they include the Greater Union and
Queensland-based Birch, Carroll and Coyle chains.
Morrison said that the chain had not been right but he did not want to be shut out of the movie business altogether.
"We put a carve-out agreement that we can put - say three or four movie screens - into our central entertainment complex in the future," he said.
The casino company is offloading the chain with 113 screens to Amalgamated Holdings for $59 million.
AHL runs Rydges hotels here and in Fiji and also has cinema interests in Germany and the Middle East.
AHL is conducting due diligence on Sky CityCinemas over the next two weeks.
Morrison said the SkyCity chain was a natural fit for AHL.
He said that with the high capital expenditure, cinema exhibition was a tough business.
SkyCity halved the value of the assets to just $60 million but talks with AHL and the US-based Reading Cinemas came to nothing.
Reading became involved in protracted negotiations and wanted SkyCity to partly finance the deal.
When the company decided to put the cinemas back on the market it approached potential buyers, but excluded Reading.
Morrison said that cinemas still fitted within SkyCity plans to be an entertainment firm, with an upcoming development in restaurants and bars.
But they were focused on bringing pedestrian traffic to the casino complex, rather than a geographically spread chain.
SkyCity reported in July that in the previous nine months its share of Auckland cinema revenue grew from 55 per cent to 65 per cent and nationally from 34 per cent to 38.5 per cent.
AHL managing director David Seargeant said New Zealand would remain a distinct market in negotiations with US studios.
He said AHL would maintain a head office for New Zealand and continue to programme movies for New Zealand cinemas locally.
