National CineMedia Inc. , managing member and owner of 46% of National CineMedia LLC , has signed a definitive agreement with its founding member circuit partners AMC Entertainment Inc. , Cinemark Holdings Inc.  and Regal Entertainment Group to restructure the ownership of its NCM Fathom Events  business.
Under the new corporate structure, Fathom Events will be owned and managed by a newly formed stand-alone limited liability company with 32% ownership by each of the three circuits and 4% ownership by NCM LLC.
In addition to the 4% interest in the new company, NCM LLC will receive 5% six year notes of equal amount from each of the three circuits aggregating $25 million. Interest on the notes will be paid annually with principal paid in equal annual installments over six years.
Due to the related party nature of the transaction, NCM formed a committee of independent directors that hired an investment banking firm who advised the committee and rendered an opinion as to the fairness of the transaction.
Fathom will continue to be the home of high quality, affordable entertainment events on the big screen under its new ownership structure. Audiences get the best seat in the house – in the comfort and convenience of the local movie theater – for live and pre-recorded concerts, world-class opera, sporting events, comedy acts and original programming featuring the biggest names in radio and television, with many events including exclusive behind-the-scenes content and unique extras, giving audiences unique experiences they can’t see at home.
In order to ensure a smooth transition, NCM will continue to provide certain operating, corporate overhead and event sponsorship sales services to the new Fathom entity for up to nine months after closing. This change in corporate structure is not expected to have any impact on Fathom Events’ business activities or business relationships with its programming partners or Digital Broadcast Network affiliate theater circuits.
“NCM was always meant to be a launching pad for the Fathom Events business, and with its successful start-up period now complete, this new corporate structure positions Fathom for its next phase of development and growth,” says Kurt Hall, National CineMedia’s chairman and CEO. “This new ownership structure better aligns Fathom’s industry-leading consumer programming business with the cinema business, and also provides for a stronger alignment of financial interests with our theater circuit partners.”
“The acquisition will allow us to program and promote Fathom events in a more efficient manner on our screens,” says Tim Warner, Cinemark’s CEO. “We feel we can enhance Fathom through the introduction of special premieres and events utilizing content produced and distributed by TV, cable and satellite divisions owned by the major studios. The investments we have made in digital technology, including satellite delivery, digital projection and digital sound will also enhance our ability to utilize Fathom as a platform to introduce content on the big screen.”
Amy Miles, CEO of Regal Entertainment Group, says, “Fathom Events appeal to a variety of interests providing access to world-class performances and special programming. By establishing a dedicated organization focused on developing alternative content, we will be able to offer Regal guests an even greater menu of entertainment choices.”