Reading International switches tracks from its railroad past
The Reading Railroad company that most people know from the Monopoly board game is still going strong, but it’s not laying down tracks any more.
What is now Reading International Inc. has turned into a Los Angeles firm that runs cinema complexes and live theater venues in the U.S. and abroad, managing to fill seats during very challenging times for the cinema industry.
James J. Cotter Sr. gained control of the Reading name in the early 1980s through his holding company, Craig Corp. In 2001, a merger of Craig, the Reading Co. and the Citadel Holding Corp. created Reading International.
Besides operating cinemas, Reading is involved in real estate development and the rental of retail, commercial and live theater facilities.
Reading International has more than 2,300 employees and 56 cinema complexes with 476 movie screens in the U.S., Australia and New Zealand. The U.S. is the biggest market, with 26 complexes.
Domestically, the company’s complexes operate under brand names such as Reading, Angelika Film Center, Consolidated Amusements, City Cinemas, Beekman Theatre and Village East Cinemas. Five cinema complexes, including the Reading Cinemas Gaslamp 15, are in the San Diego area.
Reading, which works with major film distributors and smaller, independent film companies, also handles live shows. It owns and operates three off-Broadway theaters in Manhattan — the Union Square, Orpheum and Minetta Lane — and the Royal George Theatre in Chicago.
Live performances have included “Nightfall With Edgar Allan Poe” and “Lennon: Through a Glass Onion.”
The latest
Cotter, the biggest shareholder and driving force behind the company for 30 years, died in September at age 76. He had been chief executive, president and chairman of the board, resigning those posts in August as he fought prostate cancer.
His son and two daughters hold key positions at Reading.
James J. Cotter Jr., 44, is its new chief executive. He joined the company board in 2002, became vice chairman in 2007 and has been company president since 2013.
Ellen Marie Cotter, 48, is the new board chairwoman. She joined the company in 1998 and has been head of its domestic cinema operations.
Margaret Cotter, 45, who has headed the company’s live theater operations since 2000 and handles domestic real estate, takes over as vice chairman of the board.
Andrzej Matyczynski, the chief financial officer, decided to delay his retirement.
“The Cotters said they consider their family holdings to be a long-term family asset and that they intend to continue the company in the direction established by their father,” Matyczynski said.
Accomplishments
The senior Cotter, who started out in the movie house and the real estate markets in 1969 when he worked at the Pacific Theatres chain of drive-in movie theaters, helped engineer the merger of the three companies into Reading and to focus divergent business lines into one focused on theaters and real estate.
The company has remained a smaller player in the theater world with 26 cinemas and 294 movie screens in the United States. Regal Entertainment Group, by contrast, has 576 cinemas and 7,342 screens. AMC Theatres has 343 movie houses and 4,950 screens.
But in a year in which cinemas are having a difficult time filling seats — U.S. ticket sales for the summer movie season fell 15% from summer 2013 — Reading has increased sales and profits, in part, it says, because customers prefer the quality of its venues.
Revenue in the second quarter rose to $69.9 million from $69.6 million a year earlier. Net income climbed to $4.8 million from $4.1 million for the same period last year.
Challenges
Its size remains a challenge when competing for movies to show in its cinemas.
“Our ability to obtain top-grossing first-run feature films may be adversely impacted by our comparatively small size and the limited number of screens we can supply to distributors,” the company said in its 2013 annual report.
It also is facing rapid advances in high-definition, home-based entertainment options, such as Netflix, but the company does not see this as direct competition.
Analysts
Reading International shares trade on Nasdaq, but the company has not attracted regular analysis from Wall Street experts.
