The big news in the entertainment industry is PVR cinemas taking over the iconic Chennai-based SPI Cinemas with 76 screens across 17 properties in 10 cities. There has been a mixed response to this development on social media, because SPI has, over the years, provided a luxury experience at reasonable rates. In fact, a lot of film industry insiders feel that SPI was the driving force in the increase of box-office collections for Tamil films.
The deal is a win-win situation for both players. With this acquisition, the Ajay Bijli-run PVR Cinemas becomes the monarch of the key southern metros of Bengaluru, Hyderabad and now Chennai (see box below). In Kerala, PVR is already the market leader in Kochi and thanks to this acquisition, they get an entry into Thiruvananthapuram through SPI’s Kripa Cinemas. With this association, PVR becomes the seventh largest player in the world on track to complete 1,000 screens by 2020.
For SPI, it is a very good valuation as most of their multiplexes are in leased out malls or properties. They would consider it as payback time as they have ploughed in a lot of money into the business in the last 18 years since Kiran Reddy took over the reins. Kiran was the first theatre owner who started his own food and beverages concession stalls in his properties instead of leasing out the canteen to third-party contractors. This ensured food quality (especially the popcorn and cold coffee) for audiences. So naturally, netizens are curious about how this new acquisition will affect the food. Kiran’s recent note states, “From your love for our popcorn and cold coffee, to your outrage when things didn't go our way, SPI cinemas could have never been what is it today without you. The core SPI team, led by Swaroop and I, will continue to nurture and shape your experiences by preserving everything you love about us — from the people to the food to our commitment to excellence, all of it will remain intact.”
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A PVR spokesperson said, “Under the terms of the proposed acquisition, both Kiran and Swaroop will continue to remain associated with the business and provide strategic guidance in integrating the business with PVR and create value for all the stakeholders.” The transaction is expected to be complete in the next one month and the merger process is expected to be completed in the next nine to 12 months.
The Tamil film industry doesn’t seem very enthusiastic about the deal. An actor-producer, speaking on the condition of anonymity, said, “PVR has now become a monopoly. No Tamil film can now release, nationwide or even in Tamil Nadu, without agreeing to their terms and conditions. So many big Bollywood production houses on the eve of their films release had to fall in line with their stiff terms.”
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Smaller players are also feeling the heat as other national multiplex chains are also trying to get a foothold into Tamil Nadu, which has one of the highest theatre occupancy in India. SPI cinemas have got out at the right time when current scenario is bleak as theatres are feeling the heat from OTT platforms. Another reason touted out for the SPI exit was the political interferences in running of cinema theatres in a State where politics and cinema coexist. A local player is usually bullied by state politicians who might think twice before taking on a national player. At the end of the day, the deal seems to have given both parties enough reasons to celebrate.
The numbers game
| City/State | Existing no. of PVR theatres | Existing no. SPI cinemas | Total post acquisition |
| Chennai | 3 cinemas and 17 screens | 6 cinemas and 31 screens | 9 cinemas and 48 screens |
| Tamil Nadu | 4 cinemas and 22 screens | 8 cinemas and 42 screens | 12 cinemas and 64 screens |
| South India (total) | 25 cinemas and 164 screens | 15 cinemas and 71 screens | 40 cinemas and 235 screens |
| Telangana | 6 cinemas and 36 screens | 3 cinemas and 13 screens | 9 cinemas and 49 screens |
| Andhra Pradesh | 1 cinema and 4 screens | 1 cinema and 5 screens | 2 cinemas and 9 screens |
| Karnataka | 12 cinemas and 89 screens | 2 cinemas and 9 screens | 14 cinemas and 98 screens |
| Kerala | 2 cinemas and 13 screens | 1 cinema and 2 screens | 3 cinemas and 15 screens |