The Sunshine Economy: CMX Cinemas -- Building A Movie Theater Business From Miami

Jan 8, 2019

When the CEO of movie theater chain CMX Cinemas moved to Miami in October, he says the immigration officer at Miami International Airport did a double take when he looked at his passport. After all, the CEO’s name is Jose Martí.

 

No, the CMX Cinema boss says he is not related to the Cuban hero and writer.

 

But like his Cuban namesake, Jose Leonardo Martí is coming to America with big dreams. He plans to build a major American movie theater company in a few short years.

 

CMX Cinemas is importing a luxury movie-going experience to the United States. Its parent company is one of the largest theater operators in Mexico. It's U.S. business features ticket prices that can run twice as much as a conventional movie ticket. For that, movie fans get better seats -- including some that are synchronized to move and shake with the movie. There’s also cutting edge video and audio, and more than the usual popcorn and soda. Some locations have full-service bars and restaurants.

Its first complex opened in Brickell City Centre in 2017. Since then, it has grown thanks to the purchase of the Cobb Theatre chain the same year. That deal got CMX Cinemex the movie theaters at Dolphin Mall, and theaters in Doral, Hialeah, Miami Lakes, Palm Beach Gardens and Wellington.  In South Florida it has almost 100 movie screens -- about a quarter of its American footprint.

"From the beginning we thought that the U.S. should be our second country to grow," says CEO Jose Leonardo Martí. 

Box Office Business

Business at the box office has been volatile. Last year was a good year, with industry revenues up more than 7 percent according to BoxOfficeMojo.com. It battled back the theater business after two difficult years facing growing competition from online streaming and a lack of a slate of mega-blockbuster films.  

CMX entered the U.S. market less than two years ago with its $25 VIP ticket theater in Miami's Brickell neighborhood. It has grown by building and buying more theaters. It purchased Cobb Theatres, including the theaters at Dolphin Mall, and complexes in Hialeah, Palm Beach Gardens and Doral. The deal expanded CMX into existing theaters across eight states. Today, the company has over 350 screens, but they are concentrated in South Florida.

"The idea is to reach 1000 screens in the next three to four years," says Martí. That would put CMX among the biggest movie theater operators in the country, but still well behind market leaders AMC and Regal.

Martí isn't worried about competition from other theater companies, though. It's the competition to get movie fans out of their homes and away from streaming movies online that worries him. "We are focusing on our growth in this in-dining theater. That's really the differentiation that will allow us to continue bringing people out of their houses," says Martí.

Price and People

A $25 movie ticket, like what CMX charges for its marquee theater in Brickell,  is about twice what a traditional movie ticket costs. The average household income in the neighborhood is over $80,000 according to the U.S. Census Bureau. That's important for CMX's business model. Just to the west, the average income in Little Havana drops below $30,000.

"The first thing we look at is demographics -- The median household income in the area and population density," says Martí.

Even though as a region average incomes in South Florida trail the state and the nation, he says CMX has been successful so far. "The fact is that with the lower median household income, we have the revenue that we were expecting." 

With almost 100 screens in South Florida, Martí says they need each seat in each theater to be filled just once per day. Considering each movie screen shows maybe four movies per day -- that would be an occupancy of 25 percent in order for CMX to pay its bills.

Construction of the Capitol Theater on May 3, 1926. It was the first of what would grow into more a chain of more than 40 movie theaters owned by Wometco Enterprises, based in Miami.
Credit State Archives of Florida/Fishbaugh

Not the First

CMX Cinemas is not the first company planning to build a movie theater business from a base in Miami. The Wolfson-Meyer company, started by Mitchell Wolfson and Sidney Meyer, built the Capitol Theater in Miami in 1925. From there it grew into a chain of more than 40 movie theaters and became Wometco Enterprises, owning WTVJ Television, a Coca-Cola bottling franchise, the Miami Seaquarium among other businesses. It sold its movie theaters in 1994 to Cobb Theatres, the same name of the company CMX Cinemas purchased in 2017 beginning its ambitious U.S. expansion.