Swedish exhib sells screens
Country's Competition Authority must approve deal
Deal will give SF Bio 65% of the market share in the territory and 299 screens. SF Bio also owns a 48% stake in Svensk Bio, a 66-screen Swedish chain.
The Swedish Competition Authority must approve the deal first, but Jan Bernhardsson, chief exec of SF Bio, told Daily Variety that he expects no problem.
"Ticket prices are the same in this territory so it is not an antitrust issue as far as the consumer is concerned," Bernhardsson said.
Revenues for Sandrew Metronome's Swedish theatrical properties last year were Swedish kroner 200 million ($27 million); SF Bio posted $120 million in revs in 2003.
Sandrew Metronome Group prexy-CEO Morten Kongrod said the group, whose revs are $187 million a year, will continue to run its 18 screens in Finland and 16 in Denmark.
"They are smaller operations, and the profits are not as good as we would wish for, but they are better than in Sweden," he said.
Profit margins in the Swedish exhib biz have been extremely low, at 1%-2% over the past decade. Bernhardsson said synergies in the existing operations of both companies could help maximize income. He added that despite the additional acquired screens, SF will continue its strategy of building one multiplex a year in Sweden.
Bernhardsson noted SF was not interested in the Danish and Finnish screens but rather in maximizing its efforts in Sweden. It has screens in Norway but has had a hard time making a go of it there due to the high cost of land and permit delays.
Sandrew Metronome will focus on the distribution of feature films for theaters and video, a market showing considerable growth potential, adds Kongrod.
Pricetag for the transaction was not disclosed, but Kongrod said the sale marked "the end of an era." Nevertheless, he said, "For us this is the best move commercially and strategically."
A decade ago Sandrew and SF Bio were on a buoyant building spree and in fierce competition with each other for slices, particularly, of the Stockholm market. Shrinking margins particularly hit Sandrew hard but also SF.
"Ticket prices are affected by home movie theater systems, DVD and TV," Bernhardsson said. "That's our true competition, not other theater chains."
SF Bio works closely with sister group Svensk Filmindustri (SF), which has a powerful distribution network, and both companies are owned by Bonnier, the largest entertainment media group in the Nordic territories.
