Regal on way to "great" quarter: CEO

By Sue Zeidler

NEW YORK (Reuters) - True to form and in keeping with past recessions, people are flocking to the movies, the chief executive of the largest U.S. theater chain said on Wednesday.

Regal Entertainment Group (RGC.N) CEO Mike Campbell said movie theaters are seeing double-digit growth in box office revenue and high single-digit growth in attendance so far this quarter, on the appeal of films like "Twilight," "Madagascar: Escape 2 Africa," and "Bolt."

Regal typically reflects the performance of the industry and is on its way to a "great quarter," he told the Reuters Media Summit, sending shares of his company up 7.7 percent.

"We're approximately two-thirds of the way through the quarter, and we are having a very good fourth quarter this year compared to last year as an industry," Campbell said.

He said the movie industry has done well during all the recessions in the past 50 years. "It is still the most affordable out-of-home entertainment option," he said. "It's been business as usual for us."

Even though U.S. consumers have cut back on spending, Campbell said increases in ticket prices are achievable and necessary next year to match higher costs. Average prices across the country are now north of $7 per ticket, he said.

"We're cognizant of the recession that's going on around us," said Campbell, but added, "We've always believed 2 percent to 3 percent price inflation is a level we need in order to reach our cost of operations each year."

"We see no reason to believe that we won't see those inflationary type increases," he said.

EYEING NATIONAL AMUSEMENTS

Regal, which owns 549 theaters operating 6,754 screens, competes with Sumner Redstone's privately held National Amusements Inc, which has large stakes in Viacom Inc (VIAb.N) and CBS Corp (CBS.N) in addition to its chain.

National Amusements is facing a debt squeeze, and analysts have said it would make sense for Redstone to sell the chain to raise money. They value the 1,500-screen chain at about $500 million to $700 million.

When asked if Regal would want to buy National Amusements, Campbell said their domestic theater assets would be a good fit with its business, and his company would look at the assets if they went up for sale. But the credit crunch could hinder financing for a deal that analysts have pegged at at least $500 million.

"The same lending markets that may be creating the opportunities creates a barrier for potential acquirers, whether it's National Amusements or anybody else out there today," Campbell added, noting that no formal overtures had been made.

He said National Amusements may face hurdles in finding suitors. "I can't imagine there would be a bidding war. The bigger challenge would be finding buyers, period," he said.

Standard & Poor's last week placed Regal, which had outstanding bank debt totaling about $2 billion as of the end of the fiscal third quarter, on a negative credit watch because of debt accumulated in past acquisitions.