Coming Soon: The Box-Office Battle Between Baltimore’s Independent Movie Theaters Turns on the Imminent Arrival of a New National Player

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By Van Smith

Published in City Paper, July 5, 2006

Moviegoers wanting to catch a flick in Baltimore City currently have very few options. The theater at the Maryland Science Center screens Imax films, and there are the X-rated movie houses, the Earle and Apex theaters, that serve their particular niche. Then there are a handful of ad hoc screening spots, from movie nights at the Creative Alliance to various film series in neighborhoods, clubs, churches, and DIY spaces. While screenings of general-release first-run movies are widely available in the suburbs, there are only eight screens that feature them in the city: one at the Senator Theatre in Govans, two at the Rotunda Cinematheque near Hampden, and five at the Charles Theatre near Penn Station. In a nation with about 8,000 people for each of its 36,000 movie screens, Baltimore City has about 80,000 residents per screen—meaning movie screens are approximately 10 times more prevalent nationwide than they are here.

Next spring, though, if all goes as planned, the city’s film-presentation capacity will almost double overnight when the Los Angeles-based Landmark Theatres chain starts operating seven new screens at the Harbor East complex, near the waterfront at the end of President Street. Landmark is known for presenting a mix of foreign and independent films and major releases, and it will be tapping into the market of potential filmgoers that either live nearby or are willing to travel to the planned location at 800 Aliceanna St. The city’s two existing first-run theater owners react quite differently to this prospect.

“This is going to be a blessed change in the dynamic,” predicts Thomas Kiefaber, the 54-year-old owner of the 900-seat Senator and the Rotunda Cinematheque, whose two screens have 130 seats each. Both are in North Baltimore, several miles from Harbor East, and mostly show mainstream Hollywood movies. Over the years since he purchased the Senator from his family’s movie theater business in 1989, Kiefaber has struggled to keep it afloat as debts have increased and been restructured, forever making noises that the end is near (passers-by this May might have noticed that the marquee briefly read the senator 1939-200?). But rather than viewing the Landmark as more competition, Kiefaber sees it as the cavalry riding in to save the day—if it’s not already too late. He says he’s looking to usher in a new age for the Senator.

“I’m the indie guy, I’m the anti-chain guy. Yet I’d like to go down there with my shovel and my bucket to help get [the Landmark] built as soon as possible,” Kiefaber remarks. “How does the saying go? The enemy of my enemy is my friend?”

At the Charles Theatre—Kiefaber’s “enemy”—the reaction is decidedly less gleeful. “I don’t know exactly what we can do, but it’s going to make life more difficult,” says John Standiford, 41, a Charles co-owner. The Charles’ total 1,150 seats are two miles away from the planned Landmark. Not only is the Charles closer to Harbor East than the Senator, but the Charles serves moviegoing preferences similar to those catered to at Landmark’s 200-plus screens around the country, so the new theater presents it with a direct challenge. (City Paper has an ongoing cross-promotional relationship with the Charles.)

James “Buzz” Cusack, Standiford’s 65-year-old uncle and the main owner and operator of the Charles, contends that his theater has certain advantages over the proposed Landmark: lower overhead costs, better parking, easier access from highways and main thoroughfares, and an established local reputation that attracts faithful patrons. Nonetheless, he admits that Landmark’s arrival “likely will limit choices” for booking films at the Charles, but he says that “it’s going to be harder for [Kiefaber], too.”

The actual impact of the Landmark’s arrival on the Charles, Senator, and Rotunda won’t be known until after the new theater’s planned opening in spring 2007. But Kiefaber, Standiford, and Cusack’s speculations are based in large part on a little-discussed factor in the film-distribution business: “clearance.” That’s when a theater is prevented from showing a film that’s playing at another theater in the same market. The Charles “clears” the Senator and the Rotunda, so they can’t show films already booked at the Charles, but the Senator and Rotunda don’t clear the Charles. (The ill will between them over this issue is fierce, though otherwise each has a high regard for the other as film exhibitors.)

Soon, the Landmark may have clearance over the Charles—or, in what most observers say is a less likely scenario, clearance over all three independent theaters—so the national theater chain may be able to hoard the most promising new releases at its waterfront screens. Or it may choose not to clear anyone. Either way, the looming possibility of a national chain blocking the independents’ access to films has brought Kiefaber’s simmering gripes against the Charles to the fore, providing a glimpse into the murky world of film distribution in Baltimore City.

 

Tom Kiefaber purchased the vintage 1939 Senator Theatre from Durkee Enterprises, his family’s local theater-chain business that had once owned 10 theaters with 28 screens, in 1989. “We sold our theaters,” Kiefaber recalls on a recent June night, as he sits outside of the Grand Cru wine bar at Belvedere Square, the shopping center across York Road from the Senator. “And I carved the Senator out of the deal and took it independent, against the advice of some of the older people in my family, who said, ‘You need to have a chain around you. You’re going to get killed out there by yourself.’”

Initially, he says, “things were going along fairly well. And then General Cinema built Towson Commons.” The eight-screen multiplex opened in early 1990s and immediately cleared the Senator, about two miles away, from screening films it was showing.

A memorable example of General Cinema clearing the Senator was in 2001, when Kiefaber tried mightily to screen Pearl Harbor, the Michael Bay-directed period epic that was expected to be that summer’s blockbuster. Shut out by clearance, he had to settle for Shrek, which ended up being the better performer by far. But, to Kiefaber, that outcome was the exception that proved the rule.

“I was never able to play any of the films that ran on any of the screens at General Cinema for 12 years. No exceptions, not one,” Kiefaber says bitterly. “And they denied until the very end, when [the company] went bankrupt [in 2000], that they had any thing to do with film clearance. Whatever problems I had in not being able to play the films I wanted to play was, they said, entirely related to the whims of the distributors. That’s when I understood what clearance was. And I thought, You know what? This is a bad thing. And it became a bit of a crusade with me.”

After General Cinema was purchased out of bankruptcy by AMC Entertainment in 2001, Towson Commons’ clearance over the Senator ended, Kiefaber says, and he believes his crusade had something to do with it. By that time, his efforts to inform people about the evils of clearance had made The New York Times and CBS Sunday Morning, and had been featured on cable television’s History Channel as part of a segment on the Senator being designated one of the country’s 11 most endangered historic sites. “I was getting some resonance on the clearance issue,” he recalls of that time. “And I think AMC understood that and didn’t exert clearance from Towson. It wasn’t worth it for them.”

Thus, it was a new day—except the Charles was clearing the Senator, Kiefaber says. “It always did,” he adds. But that clearance was felt more acutely after Towson Commons stopped exerting clearance because, Kiefaber says, he sensed a change in moviegoers’ tastes. “The art/specialty film audience grew, and the indie movement came on as Hollywood started to run out of gas,” he explains. “And you get a shift. The reason you need equal access to first-run films is to develop an audience among a changing populace and a changing taste for film.”

In addition, in 1999 the Charles expanded from one screen to five. “That gave the Charles more booking power in town,” Kiefaber says. Meanwhile, Kiefaber was trying to expand the number of screens at his Govans facility. “I was not able to expand because the banks saw that Belvedere Square was going down the tubes,” he says. “And I couldn’t demonstrate that, if I had the additional screens, I had equal access to films that were going to make money because the Charles was clearing me. It was not a good time.”

Kiefaber’s frustration came to a head in 2004, when something unheard of happened in the film industry: a documentary film, Michael Moore’s Bush-bashing Fahrenheit 9/11, became a summer blockbuster hit. It was playing at the Charles, and because of clearance Kiefaber could not book it at the Senator.

“Up until this point,” Kiefaber says, “when Fahrenheit 9/11 started coming over the horizon, I was giving speeches around town whenever I could citing my comradeship with the Charles as a fellow independent, while at the same time prevailing on them behind the scenes to drop the clearance over me because it was deleterious to the survival of the Senator, and also it was ultimately going to be their undoing. We need to join together and started educating people as to what clearance is and provide some kind of bulwark against national chains coming in here—which we knew was going to happen—and upsetting the apple cart for both of us, depending on where they went. I was rebuffed.

“And then, Fahrenheit 9/11 comes along,” he continues. “And I started getting the e-mails, the calls, from Senator patrons: ‘Are you going to play Fahrenheit 9/11?’ I said, ‘Can’t.’ So, it was very frustrating to me. And I thought at the time, if there’s ever going to be a time when I was ever going to get Buzz [Cusack] in particular to change the Charles’ strategy in town and embark on a cooperative promotion of independently owned and operated theaters, this was it. I went public with the issue.”

Kiefaber garnered enough attention about clearance and Fahrenheit 9/11 that, through articles in The Sun and The Daily Record, word got out about his gripes. “The public is generally clueless about this business of clearance,” he says. “This is one of those behind-the-scenes struggles that goes on, and when people have some reason to care about it, and to think about it, and it starts to sink in on them, they are energized.” Indeed, as Cusack confirms, the Charles started to hear some complaints from moviegoers about its clearance of the Senator in the aftermath of the Fahrenheit 9/11debate—though Kiefaber contends that was never his intention.

But, as far as the Senator’s bottom line goes, Kiefaber says clearance has already done its damage, and continues to do so. “[T]he Charles’ clearance is not the only thing that has put us on the endangered list,” he writes in an e-mail, “but it is a primary factor that has taken its cumulative economic toll over the years, particularly in the last five years or more when so many of our former mainstream patrons are developing more of an interest in art/specialty film programming.”

Kiefaber acknowledges that other undeniable factors are hurting movie theaters in general—film attendance is down, for instance, likely due in part to competition from home-entertainment options. But he adamantly attributes the bulk of his problems to clearance, and the bulk of the Senator’s future promise to overcoming it.

Kiefaber appears relaxed in his sandals, shorts, and summer shirt outside Grand Cru, but he’s bound up with anxiety about the future of the Senator. “We’ve prevailed so far by fighting clearance, and fighting it and fighting it, and by increasing our debt for the day when we wouldn’t be cleared anymore,” he says. “It is like a family member who’s ill. You do what you need to do to keep them alive in the hope that there is going to be cure.”

As a business strategy, nearly 20 years of repeatedly taking on new debt and refinancing the old for a suffering business may not be entirely sound, but that is Kiefaber’s way. After all, the Senator has been in his family for 67 years—the theater is his life’s work, and it means something much more to him than its out-of-whack balance sheet. It is also, as is the Charles, a traffic-drawing anchor for a commercial district that has in recent years rebounded from the doldrums. There is more at stake in keeping the Senator alive—even by incurring perilous rounds of debt—than Kiefaber’s passion and pride.

“If the Landmark was open today, it wouldn’t undo the past,” Kiefaber acknowledges. “I’d still have the accumulated debt. But I would have a hope that I could deal with that debt because I would go from a marginal operation to one that would become profitable, perhaps to the degree that it would eliminate the debt over time, or restructure in a way based on the fact that we now have equal access to the films that we need to be profitable.”

Asked about movies Kiefaber would have liked to book in recent years but couldn’t because of the Charles’ clearance, he cites Lost in Translation, March of the Penguins, A Beautiful Mind, and Brokeback Mountain—all hits.

 

“You can’t run a 900-seat movie palace as an art house and survive,” John Standiford says. He’s sitting in the backyard garden of his Reservoir Hill home, somewhat exasperated that the clearance debate with the Senator is in the public arena again. He and Cusack reopened the Charles in the spring of 1994, after former owner David Levy had ended its 15-year run a few months earlier, and kept it going through several lean years until the 1999 expansion turned the business around. “I mean, you have to play Harry Potter and Cars. So what Tom [Kiefaber] would like to do is have the option of picking the one art film that is a breakthrough film whenever he feels like it and sucking all the life out of that film for us. And those movies are important for us. It would really hurt us if those films could play the Senator, too, because our audience would be more than cut in half, I’m sure.

“It’s like Goliath beating up on David,” Standiford says of Kiefaber’s attacks on the Charles over clearance. “His is a 900-seat theater. Everyone wants to play [films] there. I mean, if he wants to be an art house, he can be an art house. If he wanted to start booking that way, nothing’s stopping him. He’d just have to book the movies before we do. But because he doesn’t, he doesn’t have the luxury of cherry-picking the one high-grossing art movie that we get every two years. And if he chose to start booking that way, he’d close, because he wouldn’t make enough money.”

Still, Standiford does not deny that the Charles exerts clearance over the Senator and the Rotunda. “Clearance is an arrow in our quiver that’s really important, because for some of the films we screen, the distributors actually would probably like to have it on two screens, including at the Senator. Us dropping clearance would be a clear advantage to him.

“But there are more serious problems with that arrangement than having a local five-screen art house clearing him,” Standiford continues. “Dropping clearance isn’t going to save the Senator, if that’s what he’s trying to say. Because having a 900-seat single-screen theater is just a really hard thing to do. I’m glad that he’s doing it and I hope that he continues to do it. If he had two other screens on-site, that would probably help a lot. But being a single screen is an anomaly because it is really hard to do.”

The main challenge of running a single-screen theater is that you have to pick movies that will succeed at the box office every time, because the flexibility of moving poor performers to another screen isn’t available. Kiefaber reopened the Rotunda’s two screens with that flexibility in mind, but, as Standiford points out, the increased overhead of running two theaters instead of one has more than likely undercut the additional revenue more screens bring in.

As for Kiefaber’s overture to enter into a cooperative arrangement with the Charles, Standiford says he and Cusack saw no advantage in the proposition. “I guess he was trying to sell us on the idea that if we dropped clearance he would join in a partnership with us,” says Standiford. “But that was kind of a nebulous idea, and it didn’t seem that appealing to us since he had spent the previous years trying to convince everybody that we’re doing something bad.”

For his part, Cusack believes that Kiefaber’s harping about clearance is “just something for him to shift the focus from his problem,” which is not about clearance, but about the challenge of keeping open a vestige of a bygone era of single-screen movie palaces.

“It’s very unfortunate, because it’s a great theater,” Cusack says during a phone interview regarding the Senator’s ongoing dilemma. “I feel sorry for him. But I don’t have any sympathy for him if he can’t appreciate his own participation in his own problem. He just goes from one bad debt to another.”

As for clearance, Cusack says he’s not sure what it is. “Believe me,” he contends, “it is not up to me what plays at the Senator. It’s up to the distributor. It’s not because of some power that we have, it’s because of a relationship that we have with them. If he wants art movies now, all he has to do is play the same distributors’ movies as we do and establish a relationship with them. All he has to do is book the movies before we do.”

 

“Can you say ‘bullshit’ in your paper?” asks D. Edward Vogel, the proprietor of the Bengies Drive-In Theatre near Martin State Airport in eastern Baltimore County. “Because D. Vogel says clearance is bullshit. Everybody should run a free zone, and whoever grosses the most is going to be the clear winner” in the competition to screen movies with the most box-office promise. “There are enough product and prints for everybody,” he adds. “So it’s greed, pure and simple, when someone clears someone else. In this day and age, it’s not fair. And the thing about clearance is, it exists, but nobody wants to talk about it.”

Vogel is no shrinking violet. The guy can talk, fast and long (“D. Day,” Film, May 31), and when it comes to booking movies and running movie theaters, he knows what he’s talking about. He’s an independent movie theater operator whose family has been in the film-presentation business since long before he was born in 1957. He knows how film distribution works because he’s been wrestling with the beast as the boss of the Bengies since he took control of the drive-in in 1988. At times, he says, he’s been cleared by other cinemas, though he declined to give specifics on the record. But he understands clearance, even claims he knows how to break it—though that’s a secret he’s keeping to himself, unless, he says, “you want to pay me a lot of money.”

In the context of the debate over clearance, perhaps the best gauge of Vogel’s reputation in Baltimore’s tight-knit film community, as someone both knowledgeable and forthright, is this: Standiford recommended him. “You know who might be a good person to talk to about this is D.,” Standiford said during his backyard interview.

“The Senator would be stupid not to split around the Charles and play monkey-in-the-middle [over film bookings] with the Landmark,” Vogel says. “Kiefaber would have every right to do that, the way he’s been treated by the Charles. What they should be doing is the Senator and the Charles should be pooling their screen power with the film companies, or say they’re running a free zone here, and make it harder for the Landmark to establish clearance. But I think it’s too late for that, after all this time with the Charles clearing the Senator. Uncle Buzz [Cusack] cleared the Senator, and that was shitty. Now the Landmark is going to do the same to him. Now he’s running scared. They’re all nuts. Nobody should be clearing anybody.”

As for Kiefaber’s strategy of taking on mounting debt in order to keep open the Senator and acquire the Rotunda, which reopened under his ownership in 2003, Vogel cautions against entering the “gray area” of owing creditors. “I don’t spend what I don’t have,” Vogel says. “I just won’t take the risk.” (The Charles did, when the Abell Foundation guaranteed a $720,000 bank loan and the state kicked in a $485,000 low-interest loan to finance its expansion, but the theater has since managed to become profitable.)

When the new national chain arrives on the waterfront, Vogel predicts the Charles will be cleared by the Landmark, but the Senator and Rotunda won’t be. If he’s right, Kiefaber will be able to screen first-run art-house films that typically had been shown at the Charles, and perhaps, Vogel says, that will salvage Kiefaber’s finances. Meanwhile, he adds, the Charles will have to adjust its mix of movies, probably by going after more major releases, for which—unlike foreign and indie films—plenty of prints are available from distributors. (The Charles already screens a smattering of more mainstream films: It recently played The Da Vinci Code.)

Kiefaber says he believes his audience in North Baltimore will fill his seats to see more typical art-house fare, just as they have at the Charles. “We’ve established statistically to the film companies that there is a viable untapped market of art/specialty moviegoers and movie lovers in North Baltimore, in a high concentration,” he contends. “The film companies still can’t run their films at the Senator because of the clearance from the Charles. So Landmark comes in and changes that dynamic, and the shackles come off. The film companies then are free to run movies in North Baltimore, at theaters in the locus of the demographic. And you’re going to see a blossoming of what this market could have been for the last 10 years but has not been because of this artificial repression.”

Kiefaber’s suggestion for how the Charles can adjust to Landmark’s arrival is not, as Vogel foresees, to screen more mainstream movies. It’s just the opposite: to bring to Baltimore films that otherwise would never make it here because neither Kiefaber in North Baltimore nor the Landmark on the harbor will screen them. In other words, as Kiefaber says, the Charles could “fulfill the mission that people have given them credit for, but which is not the real case.” More gay and lesbian films, harder-edged art movies, obscure films by underappreciated filmmakers, overlooked documentaries, and the like. The Charles books many films that fall into those categories now, Kiefaber observes, but nowhere near the amount it could in order to stay viable in Baltimore’s coming film-presentation environment.

“As far as the Charles goes, that’s probably true,” says Standiford, when presented with Kiefaber’s scenario for the theater’s potential to adapt to the Landmark’s arrival. “When there’s more competition, the bookings get more interesting. You’re forced to look wider because you don’t have access to the movies that are easier to book, the ones that make more money.” But Standiford reiterates that he doesn’t believe the Senator could make money off the standard Charles fare. “There aren’t that many movies that he’s wanted that we’ve played,” he says. “Week after week after week, we play movies that wouldn’t pay the bills at the Senator. And every now and then—the last one was Fahrenheit 9/11, two years ago—one comes along that would.”

 

“The Senator is one of the greatest places to see a movie in the world, certainly in North America,” says Jed Dietz, the head of the Maryland Film Festival. “And Tom [Kiefaber] has a great gut for picking movies that will do well.” But Dietz, whose annual festival hosts screenings at both the Charles and Senator, isn’t convinced that Kiefaber’s idea that art films will fill the Senator’s seats is sound. “That doesn’t sound like a solution to me,” Dietz says. “You’ve got to get another revenue stream.”

And that’s exactly what Kiefaber’s intentions have been since he took over the Senator almost 20 years ago. At that time, according to the press coverage of Kiefaber’s new acquisition, plans were announced to add two new theaters, one with 275 seats and another with 260 seats. By 1993, when a foreclosure auction was avoided by refinancing the theater’s debt, the Senator hadn’t added the additional screens. In 1997, the Senator received a $20,000 grant and a $20,000 loan from the city, to be used in part to develop the expansion plans. In 2000, when the Senator was facing possible foreclosure over a 1999 loan of $375,000 made to it by the Abell Foundation in order to stave off the theater’s previous financial troubles, the expansion plans still hadn’t been realized. And in 2003, when a $1.2 million loan package (half guaranteed by the city) restructured his existing debt and funded the reopening of a refurbished Rotunda, again the Senator’s expansion remained a distant dream. (Kiefaber maintains his payments are up to date on the $1.2 million loan. City Paper’s attempts to confirm this with the Baltimore Development Corp., the quasi-public economic-development agency that oversees the loan, were rebuffed.)

Today, Kiefaber has other plans. “My ongoing struggles to maintain my ownership of the Senator as a key element in achieving its potential are now placing the future of the beloved theater and the livelihoods of its extraordinary management staff in great jeopardy,” he writes in a June 27 e-mail. “It is my sincere belief that a restructuring of debt and ownership . . . must occur.” He’s hazy about the details, since they are still being worked out, but he plans to “enter into a strategic alliance with an equity partner or partners” that will “modify the current ownership structure, alleviate the existing debt load, and provide funding for the development of the Senator Theatre’s potential.”

The plans may end up including “an eventual expansion of the facility when the availability of art/specialty film programming has improved due to the arrival of the Landmark Theatres,” he continues. In the meantime, what Kiefaber has in mind is to turn the Senator and Rotunda into “multipurpose entertainment facilities specializing in, but not limited to, a full gamut of film presentations”—live concerts, closed-circuit digital entertainment, video concerts, and other “innovative special events.”

Dietz has another idea that has been bandied about in recent years as a way to salvage the Senator from its revenue problems. “Tom should turn it into a nonprofit and go out and raise money,” he says. But Kiefaber says he has explored that possibility and, last fall, concluded that that route would be a “counterproductive error . . . primarily because of its current debt load.” Instead, a for-profit Senator may embark on “synergistic associations and alliances with nonprofit entities,” he writes.

Kiefaber would also like to realize another long-sought goal: to open the Senator Diner on a nearby property, an idea that he believes holds “terrific profit-generating potential.” On this score, too, Dietz is dubious: “The idea that a restaurant, the only type of business more risky than a single-screen theater, could save him has always been beyond me.”

 

Landmark Theatres and its partners in opening the proposed seven-screen theater on the harbor-front—Struever Bros. Eccles and Rouse and H&S Properties Development Corp.—were given ample opportunity to add their voices to this discussion of the future of film presentation in the city. By press time, however, they hadn’t made themselves available for an interview or photo shoot. Film distributors, too, were not available. Sharon Weiss of Allied Advertising, which promotes films in the Baltimore area, says she “can’t really go on the record” about clearance issues.

Still, it is clear that seismic changes are in the offing in Baltimore’s tiny film-exhibition scene. “If the Charles is a competitor” in the way it has exerted clearance over Kiefaber’s screens, Dietz says, “then the Landmark is a tough competitor. It’s their business to be tough, and they are tough. But that’s good for the consumer, because the city is underscreened.” The Landmark’s entry will force the Charles to “do better programming,” he predicts. And it will “make the Charles better all around—because Buzz needs to spend some money for upgrading the theater.” If the Landmark liberates the Senator and Rotunda from clearance by the Charles, then Kiefaber’s fortunes will improve. “My guess is,” Dietz opines, “the Landmark will be good for everybody.”

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