Rolando Rodriguez had
already left the exhibition business when he was offered the top job at Rave
Cinemas. Rodriguez had established himself as a veteran figure in the
exhibition industry throughout a storied career at AMC before taking an
executive role at Walmart. He returned to exhibition and was a key factor in
turning around Rave Cinemas, culminating in the circuit's sale to Cinemark in
May 2013. Rodriguez wasn't out of the exhibition business for long thereafter,
as he was appointed president and CEO of Marcus Theaters that same summer. Now
a year into his tenure at Marcus, BoxOffice catches up with the veteran
exhibition executive to talk more about the business.
You're a veteran in the exhibition business. What made Marcus such an enticing option for you at this point in your career?
My career track really started within the industry. I spent 30 years with AMC and took a side trip with Walmart, where I spent nearly five years. I was recruited to become the president and CEO of Rave Cinemas, which was owned by a private equity group. Their intention was to spin off that circuit within a three- to five-year period of time based on turning the company around and achieving the kind of returns we were looking for. We were fortunate enough to have a great team that was able to do that in a two-and-half-year period of time. I also sit in the NATO Executive Board of Directors, where Steve Marcus also sat for those years I was in charge of Rave, and we got to know each other. The timing for me was perfect, since Bruce Olson, my predecessor in this position, decided to retire after a long and distinguished career right around the time we sold Rave. I was one of the several candidates that Marcus was considering and, through the course of many interviews, I was able to join a well-respected brand in Marcus. It was also intriguing to me that it is a company that isn't just made up of theaters but has a broad view of the food-and-beverage and hospitality industries. That, combined with what I felt was a great company and great people, that's what brought me here.
Now that you've been at the company for a bit, what are some of the main goals you want to achieve moving forward with Marcus?
I joined the company on July 30, 2013, and we set out to build short- and long-term goals. We are making them happen, beginning with amenities like Take 5 and our lounge concept. We've introduced Zaffiro's Express, our branded pizza program, and have expanded it to many of our locations. And this has combined with a very strong remodel program that introduces our large-screen format expansion of Ultra Screen DLX, along with Dream Loungers, which is our branded recliner-seats program. That, coupled with the marketing initiatives we've put in place, including our discounted ticket day on Tuesdays, has really propelled the company into a nice position. Our ultimate goal is to see continued growth, and that will come from new amenities in our circuit, from organic growth, and from potential acquisitions.
You mentioned large-format screens and reclining seats, along with a renewed focus on concessions. Is it safe to say you are currently focused on raising the value-added propositions for your consumers at existing locations?
We've committed to more than $50 million of investment to our existing theaters in those areas. Within any industry, being relevant and forward thinking for the consumer is essential for any growth company. Retail, food and beverage, or entertainment-we need to provide a true price-value relationship with that consumer. For many years as an industry, we concentrated on sound, especially in the 1980s and '90s. Then we combined that great sound with the large-screen format. And after adopting stadium seating, we are now truly matching what people have at home with our reclining seats. That's within the context of providing the best experience at our theaters. And while audiences are at the theater, we want to provide a true total social experience with our lounges where you can enjoy your time before or after the movie. The idea should be how you provide that hardworking family a great three-hour experience instead of a great two-hour experience.
Can you tell us about your experience in adopting a value-pricing program?
We are living through a difficult economic time, and we never want to affect the weekend experience, but we had forgotten about a consumer out there who has been hit very hard by the economy. This consumer has stopped going to the movies, and, frankly, you have entire families that can no longer afford a night at the movies. We picked Tuesdays for a five-dollar admission for that reason, and we also provide free popcorn to members of our loyalty reward program. For a family of four that is a member of our free loyalty program, you now have the ability to afford taking your family to the movies, and you get the popcorn on us. We have a social responsibility to the consumers we had lost in our community, and we wanted to provide them an opportunity to enjoy a great moviegoing experience at our theaters on Tuesdays.
How is the Midwest region different from operating anywhere else in the country?
As you know this is the heart of America-these are hardworking folks who are committed to their families. They obviously don't have all of the other entertainment components that many of the other large cities have. Actually, we do have the Green Bay Packers, where it's like going to church every Sunday. So when folks spend their entertainment dollars, particularly for us in the Midwest, we provide the level of amenities and entertainment components that many of the other large cities have.
Marcus owns about 85 percent of the real estate of its cinemas. What sort of advantage does that provide?
That speaks to the commitment of the Marcus family in its investments. This is a company that has been in existence for 79 years and is truly committed to the theater business. It adds an extra dimension for us; it's close to our heart. We have a commitment to that community and to the company to make sure the theaters are as good as they can be. We are not dictated by equity investors; our commitment as a company is to show we are here for the long term.
What do you enjoy about the Geneva Convention?
I've gotten to know many of the members of NATO of Wisconsin and from other sister states. This is the CinemaCon for exhibitors in the Upper Midwest. All operators and business owners have the opportunity to have NATO provide education and a trade show for us. It's a truly small-town feel for a lot of key exhibitors to participate in a show of this scope. NATO also makes a big commitment to raising money for charities like Variety and Will Rogers through the course of that week.
What are the obstacles facing exhibition in the coming years?
I think there are opportunities for us in the long term; it's making sure film grosses grow and that attendance grows alongside it. Flat or declining attendance is a big cause of concern, and in any healthy business you need to have the growth in revenue and attendance. I think a big part of that is making sure that our price-value relationship is closely aligned with the consumer. It's important that we place a priority on amenities inside our theaters, so consumers can have a great experience inside our cinemas.