Viacom Considers Selling Cineamerica Theater Chain, Estimated to be Worth Over $500 Million

Strategic Insights

Jun 22, 1994 — 1 min read

Viacom Inc., reeling from its massive debt of nearly $10 billion, is considering selling its joint venture 350-screen Cineamerica movie theater chain, reportedly valued over $500 million. Rumors emerged that Turner Broadcasting System Inc. is engaged in buyout talks for the chain, which operates primarily in California, Colorado, Arizona, and Alaska under the Mann and Festival locations. The sale of Cineamerica's high-grossing outlets in Westwood Village and Hollywood could be a significant coup for the buyer, potentially bringing in substantial revenue.

Key Takeaways:

Viacom Inc. is considering selling its 350-screen Cineamerica movie theater chain to alleviate its nearly $10 billion debt.
Turner Broadcasting System Inc. is reportedly in buyout talks for Cineamerica, with the chain valued at over $500 million.
Cineamerica operates primarily in California, Colorado, Arizona, and Alaska under the Mann and Festival locations.
High-grossing outlets in Westwood Village and Hollywood are among the chain's most lucrative properties.
Viacom acquired the Paramount Communications Inc. for $10 billion, taking on nearly $10 billion in debt.
The sale of Cineamerica's sports assets, including Madison Square Garden, could bring in up to $1.2 billion.
The potential buyers for Cineamerica's sports assets include Time Warner Inc., Tele-Communications Inc., and New York Yankees owner George Steinbrenner.
Viacom's Chairman Sumner Redstone built his estimated $5.6 billion fortune on the National Amusements theater chain, which he sold to Viacom.

Statistics:

Viacom's debt: nearly $10 billion
Estimated value of Cineamerica: over $500 million
Desired sale price for Madison Square Garden: $500-$600 million
Desired sale price for MSG regional sports network: up to $300 million
Potential sale price for New York Knicks: up to $200 million
Potential sale price for Texas Rangers: over $100 million

Sources:

" Turner's TBS in Talks to Buy Viacom's Cineamerica Theaters", PR Newswire, June 23
"Viacom Considers Selling Theater Chain", Los Angeles Business Journal, June 23

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