Saturday, April 16, 2011

Weekend Trim Bin

Notice... Due to technical issues with Blogger this new post is not appearing on the opening page, although it is here... somewhere...


A number of questions linger in the wake of the corporate demise of the Light House cinema in the High Court yesterday:
1. What becomes of the State's €1.95m investment?
2. What happens IFCO's viewing facilities?
3. What of the developer/landlord's 'cultural use' planning obligation?
4. Who are the two competing cinema operators interested in the site?
5. Can any programming restrictions be placed on a new leaseholder of the cinema?
6. Can any small cinema pay €200,000 rent each year and be commercially viable?
7. Are circumstances so changed for 'art house' exhibition and distribution that the numbers no longer add up, especially in leased premises?
8 Does it make sense to divide the audience for 'niche' films between four or five different cinemas in Dublin City Centre?
9. Is the Smithfield location currently too forbidding for a predominantly night-time activity?

An anonymous commenter on my last post has contributed the following (lightly edited with my own comments [interposed]):
The "rent increase" line being spun on this now appears to have been a complete red herring, put out to cover up for the unviability of the undertaking from the outset. What is not being reported is that the Balance Sheet for the Light House Cinema at the end of June 2009 showed an accumulated deficit of €241,189, or almost a quarter of a million euro.
[Presumably a good portion of this relates to start-up costs in the first year of operation - IFP]
This loss was made on a *discounted* rent level for 2009 of €100,000 as part of the lease agreement, which it now appears was signed on a discounted rent basis (Zero rent payable in 2008, € 100,000 in 2009; € 200,000 in 2010; € 400,000 in 2011; € 500,000 in 2012 - information from So it appears the landlord was actually subsidising the rent.
[If this is true I have to say it does not seem commercially realistic at all - IFP]
The income from IFCO has been quoted at €120,000 per annum (same source). But even coupled with increased box office receipts, this would not appear to offset either the agreed rent increases or the accumulated deficit to a sufficient degree.
It has also been mentioned that there was no mention of the trading performance of the wider Smithfield Market area in the lease agreement - is this yet another red herring? (Source:

[This might just be hearsay - IFP]
The mystery remains as to why ongoing revenue support from the state - clearly essential from the outset in order to ensure viability - was not part of the deal.
There is now a pressing need for a full and thorough investigation into the "Cultural Cinema Consortium" - who are people behind it, and how have they been able to mobilise millions of euro of taxpayers' money apparently without any accountability? And further questions need answering - why did Cork's Kino Cinema have to close apparently simply by applying for a grant from this body? What about the Galway project? Is this another folly, another Light House debacle in the making?

[As I understand it the closure of the Kino in Cork arose from a number of issues, including the substantial cost entailed in trying to redevelop a site which offered no economies of scale. The Solas cinema project in Galway is different to the extent that there are no landlord or tenancy costs - IFP]


From the beginning of May the O'Gorman family will be taking a back seat at the Ormonde Stillorgan, a cinema with which they have had an association going back more than fifty years. They will now be concentrating on the Movies@ sites they established with the Spurling family.

It is remarkable the extent to which the Irish cinema trade is still a collection of family-run businesses, aside from occasional interlopers from across the water! The brothers Colm and Ciaran Butler will be taking over the running of the Stillorgan cinema.

The Butlers made their money from Leisureplex (and from the Quasar craze with Ossie Kilkenny and Paul McGuinness) and bought out UCI for some €90m several years back. The Tallaght UCI site was sold for redevelopment and there was talk of their developing new cinema sites in Belgard and Finglas.

Planning for a new cinema complex in Dundrum on former Airfield Estate lands that the Butlers jointly own with Bernard McNamara was knocked on the head last September.


The latest twist in the Magma Saga, following the cancellation on Tuesday, is that the much delayed / protracted Creditors Meeting will now take place 'later this month'.

There are rumours that the ODCE is taking an interest, and some suggestions too that the Revenue might be about to act. One can only assume that any and all professional advisors connected to this affair are anxious that matters now proceed without delay and according to the rulebooks for such things.

It seems extraordinary that the Light House can have been put out of business so quickly and easily over outstanding rent of €157,000 while part of the Magma group of companies owes considerably more, for a longer period, and yet creditors are no wiser now, officially, than they were months ago.


Anonymous said...

1. €1.75m, no? That's what all the other reports said.

2. Obviously Harcourt Terrace is out. IFI or Cineworld?

4. UCIs are allegedly one of them. Which would make sense in that any city centre operator wouldn't touch it with a ten foot pole, surely. If the incredibly experienced managers/programmers couldn't make it succeed, then it's done, no?

Regarding the comments about the Cultural Cinema Consortium, I believe that the authors of that manifesto were Neil Connolly and Maretta Dillon.

There was a lot of money earmarked and guaranteed for cultural cinema outside of Dublin, but did it only go as far as Smithfield?

The Lighthouse was supposed to operate on a commercial basis, that was the fatal flaw, as the rent debacle proved, especially given that this was possibly the first increase of many.

I'll miss the Lighthouse, it was so beautiful, but there are so many questions around its viability that it's not as much of a shock as it should be. Which is tragic.

irish film portal said...

1. The other reports do not include the more recent grant of €200,000 towards the digital exhibition fit-out, presuming that the total was drawn down.
2. There are other options - The Screen and Denzille Lane, for instance, or even the former IFT (Sugar Club). I presume a short-term arrangement will be entered into while tenders are sought in line with usual public procurement practice.
4. I can not see any cinema business being viable in that location with those rent levels, let alone one with a specialist screening programme. One possible addition to the mix (with premium pricing) - if the digital fit out is complete - might be high-end 'live' screenings of opera, ballet or theatre from the UK, Italy or the US.

I believe you are incorrect in ascribing such a 'manifesto' to the Light House directors. They, among several others (see the Ron Inglis link), had conducted valuable research in the years prior to the initial launch of the 'Cultural Cinema Consortium' by the Arts Council and the Film Board who jointly put together the scheme.

Money (€750,000 capital per site) was initially earmarked for Cork, Galway, Limerick, and then Dublin. In subsequent schemes funding has been provided for digitisation and digital projection facilities in Dublin and elsewhere.

I suspect, these days, that no non-mainstream film exhibition business offering economies of scale would be commercially viable in commercially rented premises.

A look at programming in the few 'art house' cinemas here over the last decade will, I think, show something of a drift initially into 'indie' anglophone programming and, more recently, towards more mainstream releases. It demonstrates that commercial choices are made everywhere, even when the overhead is less burdensome.