Benzinga  Apr 15  Comment 
Millions of movie fans are likely excited to catch "The Fate of the Furious" film over the long Easter weekend, but how should investors position their portfolios? Buy Regal Matthew Harrigan of Wunderlich reiterated a Buy rating (with an...
GenEng News  Mar 23  Comment 
Regeneron Pharmaceuticals said yesterday that its Regeneron Genetics Center (RGC) subsidiary will partner with UK Biobank and GlaxoSmithKline (GSK) to generate genetic sequence data from the health database’s 500,000 volunteer participants.The...
Benzinga  Mar 20  Comment 
“The live action re-imagining of animated classic Beauty and the Beast [Walt Disney Co (NYSE: DIS)] opened at a March record $170 million, actually the seventh largest U.S. opening all-time and the best for a PG-rated film,” Wunderlich’s...
Benzinga  Feb 6  Comment 
Loop Capital’s David Miller said he would not be surprised to see if Regal Entertainment Group (NYSE: RGC) bulk buys theaters that AMC Entertainment Holdings Inc (NYSE: AMC) is seeking to divest to gain Department of Justice approval for its...
Forbes  Nov 29  Comment 
Looking at the universe of stocks we cover at Dividend Channel, on 12/1/16, Nike (NYSE: NKE), Regal Entertainment Group (NYSE: RGC), and H & R Block, Inc. (NYSE: HRB) will all trade ex-dividend for their respective upcoming dividends. Nike will...
GenEng News  Nov 17  Comment 
Aiming to conduct the largest sequencing project for primary sclerosing cholangitis (PSC) to date, the nonprofit research accelerator Curable has partnered with the Regeneron Genetics Center (RGC) and the Mayo Clinic to launch the International...
Benzinga  Oct 24  Comment 
B. Riley expects Regal Entertainment Group's (NYSE: RGC) earnings in line with consensus amid double-digit box office gains. The company is set to report its third quarter financial results on October 27. Analyst Eric Wold expects earnings of...
Benzinga  Sep 26  Comment 
Loop Capital's David Miller is wondering why Regal Entertainment Group (NYSE: RGC) is hesitant to enter into the "underserved" foreign markets, especially given the strong demand for American-style tent-pole films and the U.S. box office being a...


Regal Entertainment Group (NYSE:RGC) manages the largest movie theater chain in the US. At the end of fiscal 2009, Regal Entertainment operated 6,768 movie screens in 548 theaters in 39 states and the District of Columbia.[1] It had over 244 million attendees, and has theaters in all of the top 30 U.S. designated market areas.

The movie theater industry is highly competitive due to the large number of players and the lack of control theater companies have on suppliers. In addition, Regal Entertainment's movie theaters must compete with in-home theater services, television movie providers and other forms of entertainment such as sporting events and music concerts.

To combat such competition, Regal Entertainment and other theater chains, such as AMC Entertainment and Cinemark USA have moved to the megaplex theater format. Today, Regal Entertainment has an average screen/theater ratio of 12.1, which is about twice the industry average. By providing a centralized location for multiple screens, Regal capitalizes on economies of scale by minimizing labor and concession costs.

Regal Entertainment’s revenues are directly tied to the success of the films that its theaters show. Regal Entertainment’s value is also contingent upon the financial wellbeing of National CineMedia, Inc., the largest digital in-theater advertising network in the US. Regal holds a 22.6% interest in the advertising firm, and NCM’s IPO in 2007 provided Regal Entertainment with $447.4 million in net cash flow.

Business Overview

Geographic Breakdown

Regal Entertainment operates in 39 states and Washington, DC. The company has locations in the top 30 US designated markets and 44 of the top 50.[1] Regal specifically targets mid-sized metropolitan areas and high-growth suburbs of large metropolitan areas as locations for acquisition or development.


Theater chains have compensated for declining movie attendance in recent years by increasing ticket and concession prices. This has been successful in keeping revenues steady, as Regal Entertainment's revenues have continued to climb in the 2-3% range over the past 4 years.

Revenues come predominantly from ticket and concession sales, and in 2009 Regal posted total revenues of $2.89 billion, compared to its 2008 revenue of $2.77 billion. As a result of this increase in revenues, Regal's net income increased as well. For 2009, Regal had total net income of $95 million, compared to the previous year's $73 million.

Trends and Forces

Regal's Revenues Rely on the Popularity of Films

A movie theater company's success is tied closely to the quality of the films that it shows. For example, in 2009 the movie film industry produced multiple hits including Avatar, Transformers: Revenge of the Fallen, Harry Potter and the Half-Blood Prince, Up, Twilight Saga: New Moon, The Hangover among others. As a result, for the first time ever U.S. box office revenues were more than $10 billion. As a result, 2009 attendance volume increased by over 10%, resulting in gains in revenue as well as net income.

Success of National CineMedia, Inc. Impacts Regal Entertainment

Regal Entertainment has a 22.6% interest in National CineMedia, Inc., the largest digital in-theater advertising network in the US. NCM IPO'ed in 2007, selling 38 million shares of common stock for $21 per share.[2] Despite the selling of shares to the public, Regal Entertainment retained its position as the largest corporate investor in NCM (more than AMC Entertainment and Cinemark USA).

Regal Entertainment has contractual agreements with NCM that will impact Regal Entertainment's revenues in the future. For instance, NCM pays Regal Entertainment an $800 per digital theater and $0.07 per patron access fee.

Rising Movie Prices Will Add Revenues per Ticket but may Drive Away Customers

The prices of movie tickets and concession items have been rising dramatically. This may be to compensate for declining ticket sales and other revenue-generating factors. The price increases are also due to higher transportation costs (due to rising oil prices), pressure to remain competitive in the industry, and rising inflationary pressures.[3] Ticket price increases have offset revenue-losses due to declining attendance. However, too much of a price increase will cause attendance to decline to the point of revenue losses.

Digitization of Theaters will Improve the Movie-Going Experience

One of the primary ways that Regal Entertainment and other industry leaders are attempting to corner larger market share is through investment in digital projection theaters. Regal Entertainment will begin digitizing its theaters in the second quarter of 2008. Two new theaters have already successfully been built with digital projection capabilities and Regal Entertainment hopes to be finished upgrading to digital technology within three to four years. To finance this investment, Regal Entertainment, AMC Entertainment, and Cinemark USA have set up a joint venture called Digital Cinema Implementation Partners, LLC. DCIP is still in the process of finalizing finance plans. Regal Entertainment sees the upgrade to digital projection theaters as a growth opportunity through both increased quality and the compatibility of digital projection with 3D and IMAX format movies. Since both AMC Entertainment and Cinemark are also upgrading theaters, installing digital theaters is a capital expense that will not differentiate Regal Entertainment's brand from others. Though the investment will not provide additional value from an enhanced product, it will keep Regal Entertainment competitive, thus protecting against a deterioration of market value.


Regal Entertainment, along with other theater chains, faces substantial competition from other theater chains, in-home movie services, television movie providers and from other forms of entertainment. Because the theater industry is so competitive, individual theater companies have little influence over suppliers. The movie theater industry is top-heavy: the largest 5 companies (Regal Entertainment, AMC Entertainment, Cinemark USA, Carmike Cinemas, and National Amusements) control 45% of the market share while the next 5 only control 8%. National Amusements is a private company.

How is Regal Entertainment Different?

As the largest theater chain, Regal Entertainment operates with the greatest economies of scale and thus the highest operating margins of any theater company.

How is Regal Entertainment Similar?

Below the largest companies, the movie theater industry is fragmented and highly competitive. Few barriers to entry exist and studies have shown that consumers are not loyal to a particular company; instead, moviegoers base their decisions off of proximity, the films showing, and amenities.[4] For this reason, the movie theater industry lacks expansion opportunities, especially in the growth of internal operations. Regal Entertainment's growth potential lies primarily through acquisition, which will allow it to tap new markets.


  1. 1.0 1.1 RGC 10-K 2009 Item 1 Pg. 4
  2. RGC 2007 10k, Item 7: Management's Discussion and Analysis of Financial Condition and Results of Operation, pg. 39
  3. Seeking Alpha, "Inflation is Hitting the Entertainment Dollar as Well," 3/5/08
  4. RGC 2007 10k, Item 1: Business, pg. 1
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