21/06/2006

According to Hungarian financial daily Világgazdaság, negotiations are underway for the purchase by Palace Cinemas of the Hollywood multiplexes in Budapest currently owned by the firm's main competitor InterCom. The deal would create a monopoly for Palace Cinemas in the Hungarian capital, where the company currently owns four multiplexes of the 47 screens, a number that would be doubled should negotiations be successful. Furthermore, Palace would have an important presence all throughout Hungary, as Intercom owns multiplexes in five of the country’s biggest cities.

The rapid growth of Palace Cinemas started in November 2005 with the purchase of the Mammut I and II multiplexes sold by Budapest Film. Meanwhile, InterCom was founded in 1989 by the US-Hungarian producer Andrew Vajna (see March 28 news), who hopes to withdraw from the film industry.

As pointed out early this year by distribution expert Károly Kozma, "In Hungary, the growth of multiplexes took place over six to eight years, while it took 15 to 20 years elsewhere in the world. When the market was privatised, a staggering number of shopping centres were built and, as a back-up in case of failure, they could easily be converted into multiplexes. The period of construction of multiplexes is now over and enormous sums have been spent, which has resulted in over-capacity".

In 2005, Hungary's 32 multiplexes drew 3.9m filmgoers, while the country's total 244 cinemas drew 10.8m. Theatres in Budapest (28 cinemas for 132 screens in 2004 - multiplexes and traditional) garner approximately 58% of admissions in Hungary.

(Translated from French)