Two Milestones for Arts Alliance Media

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Sun, 06/27/2010 - 20:00 -- Nick Dager

Arts Alliance Media has announced two significant milestones. First the company has signed a deal with Cineworld the second largest cinema chain in Europe to convert its 790-screen circuit to digital over the next three years. Cineworld will finance the deal from its existing financial resources and cash flow. Second AAM also announced the closing of a €50m financing deal with Sankaty Advisors to fund the conversion of over 1 000 screens from AAM’s existing pipeline of exhibitor deals. The estimated cost of the rollout for Cineworld is approximately £30m in addition to the £10m already spent on digitizing a third of the chain’s screens during 2009 and the first half of 2010. The majority of the total £40m cost to Cineworld will be refunded by distributors who use the digital projection systems through AAM’s Virtual Print Fee) contracts. Cineworld is the first major UK exhibitor to commit to a timetable for complete digitization of its circuit. The full digital rollout will allow Cineworld to continue to show the latest 3D films on more 3D screens; offer customers an increased range of alternative entertainment. Under the deal AAM will maintain the equipment and administer the VPF agreements with distributors. AAM will also provide its theatre and library management systems to all 77 sites as well as satellite capability in conjunction with its partner Arqiva Satellite & Media. CEO of Cineworld Steve Wiener says “We’re pleased to be able to extend Cineworld’s digital estate through this deal with Arts Alliance Media. We chose to work with AAM because of their market leading position in Europe and know they have the technical and operational experience to deliver our digital vision. We have already seen the benefits of digital in our cinemas - better quality 3D and alternative content such as opera concerts and 3D rugby and are looking forward to bringing these benefits to all Cineworld customers with AAM’s support.”

 Arts Alliance Media’s CEO Howard Kiedaisch says “Cineworld is a true leader in exhibition and we’re thrilled to be in partnership with them. To be able to move forward with Cineworld while simultaneously closing the deal with Sankaty demonstrates very clearly that digital cinema rollout is running at full speed after the global financial issues of the past couple of years. These two deals mark the inflection point for digital cinema in Europe.” David Ross executive vice president at Sankaty Advisors says “It’s clear that the transition to digital cinema has reached a tipping point and that AAM are at the forefront of this transition.  We believe it is the best placed company to work with in order to harness this growth.”

Patrick Foley chief financial officer of AAM says “Sankaty has a great team of forward thinking investors and the flexible model they have created allows us to offer a wide variety of deals to our exhibitor partners.  They are very knowledgeable of the industry and we look forward to working with them over the coming years.”

 Arts Alliance Media