VRL - Village Roadshow

[greggles]

Things just keep on getting worse for VRL. The latest blow was the $51 million entitlement offer priced at $1.65. A ~$10 million loss expected for FY18 with theme park and cinema exhibition attendance numbers down. The pressure is on to turn things around.

 

[So_Cynical]

425 Million in debt with a market cap of 290 million, not a happy place.

 

[bigdog]

How many million bas been paid to to bribe the political parties for video piracy actions implemented?

The government has now placed actions were the Australian telcos have all banned access to all these sites

$1.5 million paid was reported about three years ago!

 

[BlindSquirrel]

SP finally seems to be moving up again. How long until they are likely to reinstate dividends? I'm having a good look at this ticker. I disagree with their greedy grubby anti-piracy stance but they're pretty well established and gains are gains.

 

[Ann]

SP finally seems to be moving up again. How long until they are likely to reinstate dividends? I'm having a good look at this ticker. I disagree with their greedy grubby anti-piracy stance but they're pretty well established and gains are gains.

G'day BlindSquirrel, I have just been charting all the January Tipping picks and your pick is one of the choices I like the look of chartwise. Its Positive Volume Index (PVI) is moving up nicely and it has a couple of overhead resistance lines it needs to overcome at $2.95 and $4.00. If it can overcome these then it may well be on its way back up again, maybe even to $7.00 in the longer term view. Interesting to watch, good luck!

 

[Value Collector]

I disagree with their greedy grubby anti-piracy stance but they're pretty well established and gains are gains.

What have they done that’s greedy and grubby? Or are you just against the idea of film makers earning a return on their investments into creative content?

At the end of the day you can stream any movie you like for the whole family to watch for like $4 or $6 that’s cheap as, or you can have unlimited access to groups of movies and tv shows through Netflix etc for like $10 a month, not to mention all the free to air stuff.

I think if prefer to illegally download movies rather than pay a few bucks, it might be you who is greedy and grubby.

At the end of the day if don’t think the movie is worth $4 or $6 dollars, then simply don’t watch it, but if you really want to see it, then it must be worth that small amount.

 

[Smurf1976]

Its Positive Volume Index (PVI) is moving up nicely and it has a couple of overhead resistance lines it needs to overcome at $2.95 and $4.00. If it can overcome these then it may well be on its way back up again, maybe even to $7.00 in the longer term view.

There's also the simple aspect that the price continued to trend up when the overall market was firmly heading down. That in itself is a positive aspect.

 

[BlindSquirrel]

Or are you just against the idea of film makers earning a return on their investments into creative content?

I'm absolutely not against the film makers being paid for their exertions. I am against their attempts, during the court case v Iinet, to bully a lower tiered ISP that had less financial backing than the bigger competitors because they would be easier to outspend in lawyer fees.
I do pay for my content for the record because the streaming providers actually provide an attractive product at a price point that I acquiesce to paying.

There is also the matter of the expiration of copyright which Disney is fighting against because they want to keep making money off the characters long after Walt's death. When should the idea become public domain?

 

[Value Collector]

I'm absolutely not against the film makers being paid for their exertions. I am against their attempts, during the court case v Iinet, to bully a lower tiered ISP that had less financial backing than the bigger competitors because they would be easier to outspend in lawyer fees.
I do pay for my content for the record because the streaming providers actually provide an attractive product at a price point that I acquiesce to paying.

There is also the matter of the expiration of copyright which Disney is fighting against because they want to keep making money off the characters long after Walt's death. When should the idea become public domain?

Is VRL bullying isp’s?

What does Walt’s death have to do with whether characters should be copyrighted?

The fact is the Disney company is still creating new content with its characters, all the time, constantly investing and developing the characters keeping them relevant.

Some one that comes along and pirates Mickey T-shirt’s for example, isn’t adding value to anything, simply trading off other people’s work, they have done nothing to build mickeys presence, but just wish to profit from it.

Unless a body of work has been abandoned, and the public would benefit by a third party publisher distributing the abandoned work, or new creators using the characters in new ways, there is no reason to strip copy right away.

I think works should only lose their copy right if they have been abandoned for say 50 Years, but if the company that owns them is still creating and developing the works across multiple formats, there is no reason to lose copy right.

Mickey is not really under threat as much as people think though, because he is a trade mark, and trade marks don’t expire.

 

[BlindSquirrel]

Is VRL bullying isp’s?

Why would VRL lodge a court case against iinet rather than an ISP like Bigpond with a higher number of customers that would arguably be stealing on a larger scale? The main reason would be because iinet would be seen as easier to push over and therefore establish a precedent when taking on larger ISPs.

You raise some good points on Disney; would they claim copyright infringement on some of those early 1950s cartoons if they were publicly shown (unaltered, without paying) now that it's been 50 years after Walt's death? I'd bet that they would. Should they be entitled to profit off his work into perpetuity as a company?

 

[Value Collector]

You raise some good points on Disney; would they claim copyright infringement on some of those early 1950s cartoons if they were publicly shown (unaltered, without paying) now that it's been 50 years after Walt's death? I'd bet that they would. Should they be entitled to profit off his work into perpetuity as a company?

I don’t know he details of the VRL case to comment, but if I felt I was in the right and I good achieve a similar legal outcome cheaper by attacking a small target, I would do that.

Films made in 1950’s wont come out of copy right until after 2045.

But in my opinion, if a work was truly abandoned by Disney, I personally wouldn’t have a problem with others distributing them in there original form, as long as they were able to keep non abandoned characters and stories perpetually.

With the current system where everything with eventually go out of copy right, then why let things go earlier?

But yes I do feel copyright should be perpetual if there is still ongoing stewardship of the content.

 

[ducati916]

Films made in 1950’s wont come out of copy right until after 2045.



With the current system where everything with eventually go out of copy right, then why let things go earlier?

But yes I do feel copyright should be perpetual if there is still ongoing stewardship of the content.

Intellectual Property Law is a bit of a minefield for laypersons.

When talking about 'film' copyright, you are actually talking about a number of copyrights: you will have the copyright in: the soundtrack, the script, etc. The copyright of the 'film' will depend [very much] on the duration of the underlying copyrights.

As an [further] example of the complexity, a 'film' is not a dramatic work: it may however be the 'means' by which a dramatic work is fixed.

Prior to 1962, [in some jurisdictions] the soundtrack was part of the 'film'. After 1994, this [is] no longer the case. Prior to 1962, 'films' had no copyright. Rather, they were copyrighted as 'dramatic works' pursuant to 1913 legislation. This was for 'fictional' dramas. However due to the broad scope of the language, non-fiction [newsreels etc] would probably be included.

Therefore when calculating duration of protection for films, it may be necessary to consider transitional provisions in the relevant jurisdictions. The US is quite different to England/Aus/NZ.

jog on
duc

 

[ducati916]

Mickey is not really under threat as much as people think though, because he is a trade mark, and trade marks don’t expire.

This is too simplistic a position.

First and foremost, you would probably need to consider whether any breach of ownership created a cause of action in: common law, viz. passing off or a breach of a registered trade mark[Trade Mark legislation], or a breach of the Fair Trading Act.

So if it were a 'registered' trade mark, registration and thus the trade mark, could very well 'expire'.

jog on
duc

 

[Parse]

While the copyright argument is a big one, there is also another elephant in the room. Australian suppliers of film - on dvd/blu-ray etc are notorious for poor quality. VRL is one in the forefront of this. If anyone has ever bought a movie blu-ray from the USA and then compared it to the edition supplied by suppliers such as Roadshow in Australia, then you will know what I am talking about. The picture is of a lesser quality and the soundtrack is generally over compressed and often of a lower quality codec.
Apologies though, all this really has little to do with the VRL stock as purchases of hard copy movies etc isn't a big market these days. Btw, VRL is the only company I know of that have been forced into recalling certain blu-ray movies - because what was advertised on the box was not what was on the disc inside (lower quality).

 

[bigdog]

https://www.theage.com.au/business/...sing-on-village-roadshow-20190118-p50sa8.html

A cinematic feud: Are the curtains closing on Village Roadshow?

The angry emails began on June 20 when John Kirby fired off a lengthy missive to the Village Roadshow board. The subject line was: “The Diagnosis”.

Kirby had resigned as an executive at Village - the film, entertainment and theme parks business run by his family for decades - five years earlier.

He remained on the board, however, and watched with growing frustration as the company’s share price tumbled from $7.15 five years ago to as little as $1.77 in July.

The 71-year-old had stood back as his younger brother and executive chairman Robert Kirby and chief executive Graham Burke, a family friend, called the shots over that time. But now he’d had enough.

In the email John outlined his frustrations. He accused Village’s management, led by his brother, of issuing overly optimistic financial forecasts, weak corporate governance and poor capital management.

He concluded the business behind Hollywood blockbusters such as Happy Feet, The Matrix and Zoolander was sick, and needed urgent attention.

The email received a cursory reply and was then followed by several others. Sources familiar with the contents estimate they would run to more than 150 pages if printed out.

John’s arguments are contested by other members of the Village board who dismiss him as disgruntled and jealous.

Earlier this week, Burke called him “disgruntled and bitter”. But there is no question about the trajectory of the company that is still worth $554 million, boasts a 70 year heritage and was one of corporate Australia’s great success stories.

Since 2014, Village Roadshow’s market value has tanked from $1.2 billion to as little as $370 million. The market decline was keenly felt by Burke and the Kirby family who own 42 per cent of the company between them.

The rise in video streaming services such as Netflix and Stan slowly hobbled Village’s DVD distribution business.

A string of box office bombs, including the 2015 flop Jupiter Ascending starring Mila Kunis, eroded an investment in Village Roadshow Pictures, the Hollywood film studio the Melbourne company once controlled.

And suddenly too its theme parks were in trouble. In 2017, Village reported a $67 million loss.

The other undeniable fact about John’s emails is that they exposed tensions with his brother that some people believe have existed behind the scenes for years.

The family feud remained a private matter last year but earlier this week John went public with his grievances by confirming he had hired an investment bank in an attempt to break up Village. It is a proposal Robert vehemently opposes.

With both brothers seemingly intractable, the question is who will prevail?

The greatest showman
One of the earliest memories Robert, now 67, has of Roscoe “Roc” Kirby is of him standing over the kitchen table, sketching up dreams for what the company’s next cinema would look like on huge sheets of white paper. Robert says he remembers “clear as crystal” his pioneering father drawing lines representing the parking ramps and planning out the way it would look.

The idea for the new drive-in theatres was based on a photograph Roc had seen in a newspaper while serving in WW2.

Hearing his family were cinema operators, an American soldier showed him an article of the US’ most recent drive-in innovation and the idea returned with him from Papua New Guinea.

At the peak of the drive-in era, Roc’s businesses Kirby Theatres Pty Ltd and Village Drive-In Pty Ltd would have 14 drive-ins, mostly in Victoria, and many other traditional theatres.

The business rapidly became a household name and today Village has 74 cinemas with 704 screens, owns some of the country’s biggest theme parks in Movie World, the Gold Coast’s Wet’N’Wild and SeaWorld and is associated with classic films Gallipoli, Mad Max, Red Dog, Muriel’s Wedding and Breaker Morant.

Roc is described by those who knew him as the “ultimate showman” and an instinctive businessman who knew that fresh ideas, glamorous openings and promotion were the secret sauce for getting Australians out of their home and into his venues. And he would put everything on the line to get the job done.

Known for sayings like “your word is your bond”, “always do what you say you’ll do” and “an ounce of loyalty is worth a ton of know-how”, Roc ignored naysayers who laughed at him because he wanted to put “pictures in a paddock” at a time when indoor cinemas were closing due to the growing popularity of television.

He launched his Croydon drive-in in the 1950s. It was a sensation with innovations such as BBQs, a fish and chip unit and a glass-fronted cafeteria (which now-defunct newspaper The Argus reviewed as “expected to be a huge success with Melbourne people who have taken to espresso coffee in a big way”).

As the 20-acre plots he owned for the drive-ins surged in value after land was rezoned to cater for a growing and sprawling urban population in Melbourne, Roc was able to sell out for a big profit in subsequent decades

He [Roc Kirby] turned a paddock and a creek into MovieWorld ... he mortgaged his house [to do it].

Graham Burke
He used the money to buy a prime Melbourne CBD location on Bourke Street from Alan Bond who had been using it as a Walton’s department store until 1983. The business spent $30 million redeveloping the site into a five-level cinema, retail and office complex (the head office would later move to South Yarra).

The drive-ins are just one of the achievements the Kirby sons and Burke idolised him for.

“He turned a paddock and a creek into MovieWorld ... he mortgaged his house [to do it],” Burke says.

Village continues to be controlled by the Kirby brothers and Burke who started working for Roc part-time aged 14 at the Ararat cinema in south-west Victoria

By the time he was a young adult, Burke was managing a large part of the business (at 21 he wrote the operations manual) and says he had come to see Roc and his wife Beatrice Kirby as “my Melbourne mum and dad”.

Those who know the family well refer to Burke and Robert as “like twins” who grew up together, visiting St Kilda’s Luna Park, and the empty drive-ins during the day-time, for fun. Burke, 77, has spent his entire career at Village and remains very close to Robert to the point where they call each other “at least four times a day”.

The close friendship between them may explain why John’s resentments are bubbling to the surface. Some observers believe jealousy over his brother’s closeness with his father’s business protege plays a role, as does that pair’s dominance over Village. Sources close to John dispute this.

Roc died in 2008 (Beatrice in 2011) but his strategy of turning a deaf ear to negativity has been a defining part of the Village story. His business style has left an indelible impression on Robert and Burke.

Even today, on the wall of Robert’s office, is a sign that reminds him to have “contagious optimism” - a motto that has been vigorously tested over the last few years.

Echoes of a tragedy
No one saw it coming. On 25 October 2016, a balmy Tuesday on the Gold Coast, Ardent Leisure-owned holiday venue Dreamworld was on the verge of a tragedy that would send shockwaves through the theme park industry.

A malfunction on the wildly popular Thunder River Rapids Ride left four people dead, in a disaster that was traumatic for witnesses, dominated the news cycle for days after and led to a government inquest.

It didn’t just close down Dreamworld for more than a month – and the ride forever – it saw the public lose confidence, at least temporarily, in all theme park operators.

Burke says mums were “spooked about taking their kids to theme parks” afterwards and the tragedy turned a steady stream of local and international tourists to Village’s entertainment venues into a trickle.

“It was the single biggest turnaround in our fortune,” he says.

Unlike the Village of Roc’s era, a large swathe of the company’s income comes from its theme parks rather than cinemas. By 2016, losses from Village’s movie production business had hit $487 million. In the same year, $88 million of earnings came from theme parks, $82 million from cinemas and $24.5 million from film distribution.

After the Dreamworld incident, Village’s earnings (before interest, tax, depreciation and amortisation) from the theme parks division fell from an $86 million average in the five-years prior to $56 million in 2017 and $39 million last year.

“There's no doubt the biggest low the company here has had over its whole period of existence was the Dreamworld tragedy,” former board member David Evans says.

Evans, a prominent Melbourne businessman, was chair of corporate governance until November 2018 and is a friend of Burke’s.

“It didn't have anything to do with Village, however its roll on effect was substantial. That is only just starting to right itself,” he says.

While no one disputes there was an impact from Dreamworld, sources close to John claim Burke and Robert “overstate” the fallout and failed to use the issues facing a competitor to get ahead.

For John, Wet’n’Wild Sydney was the final straw.

The park was sold last year for a loss of $25 million after draining cash despite great hopes when it opened in 2013.

It wasn’t Village’s only problem.

The company blamed broader financial woes on a smorgasbord of uncontrollable factors, including the Dreamworld disaster, “low attendance” to the Commonwealth Games on the Gold Coast and wet weather.

But it was the aqua park’s problems, and a call for the Kirby brothers to inject $7 million each into the company to pay down debt, that was the focused of John’s ire.

Burke, a film lover, is described by supporters as highly knowledgeable about the entertainment business and devoted to Village.

But he is criticised by detractors as being too interested in “Hollywood” despite film production now being on the sidelines.

Under the spotlight
In July 2018, John hired former Rothschild boss David Kingston, an erstwhile investment banker turned property tycoon.

Kingston knew Village and the Kirby brothers well, having previously sat on the board of radio network Austereo when it was controlled by the company.

He had worked on property trusts for management in the past.


Kingston is well-known for his aggressive approach. In 2015 he attempted to evict Justin Hemmes from the Coogee Beach Palace Hotel in 2015 when the Sydney pub baron was two days late paying the rent. Kingston was out of pocket by $85.74.

Kingston and John detailed a litany of issues ranging from the acquisition of businesses with no connection to the core theme park and cinema operations to accusations Burke and Robert were using the company to enrich themselves and their children. Robert’s son Clark works as the theme park division’s chief executive on a salary exceeding $1 million a year.

Since 2015, Village has paid $1.4 million to purchase wine from Robert Kirby’s vineyard Yabby Lake, another $90,000 renting the family artwork, and about $70,000 to buy bikinis from Burke’s daughter Lisa.

All these related-party transactions are legal and disclosed in Village’s annual reports but most listed companies try to avoid them.

Tensions between the board grew and sources close to John Kirby say his constant questioning was the reason the company started tightening spending.

Kingston is among those who does not accept the Dreamworld tragedy as a valid reason for the overall decline in shareholder value and who considers John a “white knight”.

In the interests of all shareholders to fix the future performance of Village, John is seeking a new independent chairman.

David Kingston
“In the interests of all shareholders to fix the future performance of Village, John is seeking a new independent chairman in line with corporate governance standards [the] injection of new senior management, more non core assets sales and further reduction in excessive expenditure,” he says.

“With cancelled dividend, a $50 million rights issue, very poor share price and fire sale of Sydney Wet’n’Wild, since June 2018 John has done the heavy lifting and has probed extensively and constructively on multiple issues and concerns.”

The extent to which John can marshall a rebellion remains to be seen. The rest of the share register features few institutional investors with the exceptions of American outfits Dimensional Fund Advisors and Mittleman Brothers.

The few market analysts who continue to watch Village are lukewarm about the company’s turnaround. Citi analyst Sam Teeger said in August that Village could struggle to grow earnings.

“This could be challenging given the structural challenges in cinema and plans to reduce capital expenditure … divestment of underperforming divisions such as Roadshow may assist,” Teeger wrote.

Deutsche Bank’s Wassim Kisirwani was similarly unimpressed, and told clients that Village had “a poor record of delivering on expectations”.

The company had “attractive assets and an undemanding valuation”, but investors would “prefer to see some evidence of cost out traction before taking a more positive view”, Kisirwani wrote.

But a note from Baillieu a week ago said the company's share price has "rebounded strongly from the deeply discounted capital raising" in July.

The broker attributed the rally to capital raising to reduce debt, cost initiatives, successful refinancing and an improved trading outlook with a strong domestic box office and recovering theme park ticket sales.

The show must go on
Roc and Beatrice Kirby famously gave very few interviews, though the couple spoke in-depth to former Victorian premier John Cain for his 1998 book On with the Show.

One of Roc’s great thrills was seeing Village blossom, and in 1994 he said that when he first started the business it was a “struggling little outfit [and] my vision had to survive through the ruthless competition in those early days”.

“When this became apparent, I had a clear dedication for Village to achieve a commanding cinema circuit throughout Australia... My vision now is for Village Roadshow to become an overall world entertainment identity,” he said.

My vision now is for Village Roadshow to become an overall world entertainment identity.

Roc Kirby in 1994
Robert shows similar optimism in 2019 after the company’s toughest year on record, saying “there are strong and encouraging indications of a turnaround, especially in our biggest business, our theme parks”.

“And of course the Queensland summer has been blessed with superb weather.”

He refuses to speak publicly about John and the family feud (John also declined to comment) but regardless, February 22 will be a landmark for the company when it publishes half yearly results and faces shareholders.

Either Burke and Robert deliver a strong return to growth - and importantly, start distributing money to shareholders again - or their leadership of Village will look increasingly untenable.

Investment banks are already sceptical, interest from major fund managers is scarce, and the board is riven by a bitter feud.

And what’s at stake? Only the future of the Village name and the legacy of Roc, Burke and the Kirbys.

702

 

[bigdog]

ASX Ann today
21/12/2018 2:23:18 PM Refinance Completed

Further update by the Age to report today

https://www.theage.com.au/business/...ys-former-hollywood-exec-20190120-p50shj.html

Village Roadshow 'stopped at the drive-in', says former Hollywood exec

A former executive at major Hollywood entertainment company Warner Brothers has hit out at embattled local operator Village Roadshow, describing the company's management as being "stopped at the drive-in" and failing to understand the future of the film business.

Edward Frumkes, the American film giant's president of international distribution and marketing until 2001, said he had worked closely with Village Roadshow chief executive Graham Burke and chairman Robert Kirby during his 13-years at Warner Brothers, but now thought the company was "not in any kind of position to compete with today's world in the media industry".

Mr Frumkes, now a senior executive at Shanghai Hippo Animation – a Chinese production studio backed by private equity billionaire Michael Kuan – oversaw the launch of several international hits for Warner Brothers including The Matrix, which was co-produced by Village Roadshow.

Village Roadshow also operates Warner Brothers Movie World on the Gold Coast under an agreement with the Hollywood studio, and a production partner through its Village Roadshow Pictures business for a string of movies including Ocean's 8, Ready Player One and Into the Storm.

"Take a look at Netflix, at Amazon, and you'll see they are disrupting the (film) industry on a worldwide basis through technological innovation, entrepreneurial endeavour, their lifestyle leadership," Mr Frumkes said.

"In order to guide a media entertainment and leisure company, you have to be savvy. In my opinion, Village Roadshow has stopped at the drive-in.

"I definitely agree they are well-positioned, but this is purely an issue of poor performance, and that is a black and white issue."

Mr Frumkes comments follow revelations in the Sydney Morning Herald and the Age that John Kirby, a former Village Roadshow executive and a current board member, is pushing for Mr Burke, the company's chief executive for three decades, to be sacked and replaced.

The future of the struggling company, which has dropped in value from over $1.2 billion in 2014 to $575 million today, has caused a major rift between John Kirby and his brother Robert, who several Village Roadshow insiders suggest is positioning his son Clarke Kirby to take over.

Since John Kirby's departure as executive, the company has written down the value of its stake in Village Roadshow Pictures, which is now controlled by American hedge funds, to zero.

It was also forced to sell Wet 'n' Wild Sydney at a loss in a fire sale after the theme park continued to lose millions of dollars, forcing the company into a $67 million loss in 2017.

Mr Burke, in earlier comments to this newspaper, said the board had full confidence in management, and a turn-around in the theme park business was expected to deliver stronger profits for the company, pushing the share price to a six month highs of $2.98 last week.

John Kirby has appointed former Rothschild merchant banker David Kingston and Melbourne law firm Arnold Bloch Leibler to act on his behalf, and is pushing for the company to divest underperforming businesses like its Roadshow film distribution arm.

Citi analyst Sam Teeger told clients in August Village Roadshow "needs to demonstrate the ability to generate sustainable earnings growth" which "could be a challenge given the structural challenges in cinemas and plans to reduce capital expenditure".

"Divestment of underperforming divisions such as Roadshow may assist," he wrote.

 

[$20shoes]

Chart wise VRL is at an interesting bullish juncture on the weekly, and on Friday popped out of its daily channel to say hello to the longs. I like the cut of its jib at the moment.

 

[BoNeZ]

Nice jump today up 19% on an offer from private equity. I took the opportunity and sold.

 

[System]

On December 30th, 2020, Village Roadshow Limited (VRL) was removed from the ASX's Official List in accordance with Listing Rule 17.11, following implementation of the scheme of arrangement between VRL and its shareholders in connection with the acquisition of all the issued capital in VRL by an entity owned by funds managed by BGH Capital Pty Ltd.