Investing in Cinema | The Big Picture

How The Big Picture Can Help You Understand Your Cinema & Leisure Investment

We provide cinema & Leisure consultancy services to those who want to invest in new or existing cinema sites around the world. Operating globally, our team of consultants have a great deal of pooled knowledge and experience from long-standing careers in the cinema and leisure industries.

We have the expertise to advise and guide you on what’s right for you as an investor before you outlay significant amounts of capital.

Leisure remains one of the overall strongest performing and more specifically cinema - has been proven to be counter-cyclical to economic downturn in other sectors. When families and individuals are looking for more affordable entertainment and escapism, cinema can definitely still fill that need.

Consumers see watching films at the cinema as an affordable luxury provided by some of the most recognisable and trusted brands on the planet – Disney, Paramount, Sony, Universal and Warner Bros. But the offer must be right. The old multiplex, people processing model is dead. New models focusing on premium offers, but offering better value for money, are emerging.

If a cinema investment fails it is more often because of a lack of planning, necessary assessment and general due diligence. And that’s where we come in.

Investing in cinema contributes to a larger investment profile and can strengthen and diversify a portfolio. What's been shown repeatedly in our case studies is that a cinema is a key ingredient to repurposing a struggling town centre or shopping centre. However, it's only part of the solution and needs to be assessed in the context of the overall leisure strategy.

Shopping malls and town centres have both made bigger statements as strong businesses by investing in cinemas. Outside of typical shopping hours, town centres in particular can often be left empty and unsafe but a cinema, with the right associated leisure, is particularly powerful at creating footfall especially in off-peak and evening times.

This leads to an increase in dwell time in the shopping or town centre, with visitors now seeing the centre as both a convenience and a leisure destination. What’s more is that the adjacent sites surrounding the cinema and leisure offer - particularly food and beverage (F&B) venues - thrive because of this proximity and the traffic it brings with it.

The historically-solid performance of cinema as a business means that investors are likely to see a reliable return on investment (ROI). Investment of any kind comes with risk, but we have the know-how to guide you through the underlying business of cinema, steering you around the risks this sector can pose.

Why Invest in Cinema & Leisure?

There are different types of investors that approach us and engage our services at The Big Picture. You might be an investor that focuses specifically on investing in cinema real estate or property or you might be an investor wanting to invest in cinema operations companies.

Whichever type of investor you are, your situation and resulting queries will be specific to you, and different to any other case. But it’s exactly the variety and volume of past clients and cases that we’ve successfully consulted on that puts us in the perfect position to help you.

Different Investors with Different Needs

Some examples of the companies we've worked with in this area include shopping centre owners, private equity firms, property investment companies, local authorities, government agencies, agents, architects and town planners.

For a property or real estate investor, a cinema and leisure can make a complementary addition to a portfolio mix. Most cinema tenancies can last 25 years or more which can provide a steady income stream. If the lease is considerably shorter, at around only seven or eight years, it’s vital you explore the underlying business to fully comprehend if you’re investing in a solid future. This is particularly true of some of the new leisure offers. If you’re a local authority, investing in cinema assets can create a stream of revenue that can then be used to invest back into other services.

If your interests are in long term property investments, be assured there have been few failures when compared to investments in other sectors. If you’re a property company coming to us for advice on purchasing real estate in international territories, you’ll want to know about the strength of the actual functioning business that will provide you with your future tenant. It’s vital that you know who your ideal tenant should be - and perhaps, more importantly, who the wrong tenant would be. Contact us to discuss your property investment.

Property Investors

One significant problem with cinema and leisure investment is a question of how secure the investment itself is, a lot of which comes down to the quality of the tenant. To that end, certain questions arise, such as - how long will the tenant be in the property for? How reliable are they? What are their future plans? Who might likely future competitors be?

Our understanding of the underlying business itself is what’s important here - so the tenant may well be risky but we’re here to explain in detail how cinema itself is a solid investment. Through the due diligence measures we carry out, The Big Picture’s expertise significantly minimises many potential risks faced.

We'll discuss any potential threats to your investment with you. Some to consider include cinema piracy, online streaming and home entertainment services. But it's important to remember that certain threats can also be embraced as opportunities.

Avoiding Problems with Cinema & Leisure Investment

You might have an existing cinema estate and want to invest in increasing your cinema portfolio, or you might be a start-up wishing to create your first one or two screen cinema, or it might be that you're an investor looking at a merger or acquisition between cinema companies.

Today, the latest challenge is “my cinemas are too big” with too many screens and seats – so how to downsize and what to do with the spare space, are current questions for many.

Whatever your investment situation, we will investigate the strength of the business you’re looking to set up or acquire.

In order to give you a full analysis of the extent of the business as an operating entity, we’ll assess certain questions on your behalf, such as: how strong is the cinema industry? And its future? What are the threats to and within the industry? How can leisure fill the gaps? What is competitive socialising? Will that leisure offer work in my location/country?

If you're a private equity firm wanting to invest in a cinema operating company then we perform all necessary due diligence for you to know how to invest wisely.

TBP can also reposition a specific cinema in a certain location, if that cinema has been presented with a nearby competitor. This is a good example of when a neighbouring threat can be transformed into an exciting opportunity and we'll look at how the current cinema can be represented successfully and suitably.

Investing in Cinema & Leisure Operating Companies

There are lots of considerations to be aware of in order to ensure your investment is as sound as possible from the beginning, whichever type of investor you are. And it’s vital that these considerations are discussed early on at the start of the process.

We compile and address all the necessary questions that need to be asked on your behalf. These questions are often the same, whether from an operational or investment perspective. Through our analyses and investigation, we then communicate our findings to you, pre-empting any problems that may arise and preparing you before making your investment decision.

Is the site suitable for cinema and/or leisure?
Is the market suitable for a cinema and/or leisure?
Is the business case viable?
Is the design appropriate?
Is the operator appropriate to the market that we want to address/observe?
Have we fully quantified the costs?
Is there nearby and plentiful car parking?
How long is the journey to the screens?
Does the planned cinema achieve what we want it to achieve?
What are the strengths of the tenant - (propcos)?
What are the strengths of the business - (opcos)?
What are the other opportunities if we’re going to buy the property?
How do I use the destination to create synergistic events, such as Market Fairs, Festivals etc.?

Asking & Answering the Right Questions

TBP are the only company to offer you a comprehensive service of detailed due diligence combined with global best practice in our industry. Our hands-on operating experience within the cinema and leisure sectors means we can give you highly knowledgeable and reliable advice, as well as prepare you for the risks and rewards that you’ll face. We usually perform a full SWOT analysis in any situation, whether for property investments or operations, to give you a full picture of the Strengths, Weaknesses, Opportunities and Threats.

We achieve our conclusions by gleaning intelligence through market research, our specific methodology and our industry experience. Identifying any and all risks at an early stage is crucial to determining the future success of the business and avoid later pitfalls. It goes without saying that we continually look at the strengths and the future direction of the industry.

One USP we’re particularly proud of is our knowledge of, and expertise in, current cinema operators. We focus specifically on this key detail because of how important it is to any cinema based project and we have the right connections to hone in on who would be ideal for a particular site.

To find the right operational management for your property or business, one size most certainly does not fit all and so it’s vital to the success of the project that the appropriate operator is identified and brought on board.

Why Work with The Big Picture?

Mike Thomson, Partner at The Big Picture, says:

“We’re the only company to provide the range of services that we do on an international level. Our depth of analysis and the extent of our experience is unrivalled and our USP at The Big Picture is our global knowledge of constantly-shifting markets, which means we can meet ever-changing demands.”

“We provide a head to tail service in order to make a success of your investment. My main interests lie within getting a project started, and analysing where to strategically place the business.”

"We’ve worked with numerous local authorities, and many international property firms to advise on cinema investments, as well as being experienced in working with private equity firms. Our methodology begins with our ‘gut feeling’ based on our intuition and we work to a specific, detailed criteria."

John Sullivan, Executive Director of The Big Picture, adds: