KEY POINTS:
US exhibition company Reading Cinemas is lined up to pay a cheap seats ticket for SkyCity Cinemas now that it has halved its value.
But general manager Matthew Leibmann is not waiting around for the new American owners.
He is headed for the exit for a new senior role, understood to be at Hoyts in Australia.
Just three weeks ago SkyCity wrote off $60 million from the cinemas division in part to develop interest from bidders who have included Reading, Hoyts, Greater Union and New Zealand exhibitor Barrie Everard.
It is understood that Everard is still interested but Reading has been the main suitor to develop an offer of interest. It is now in advanced talks to buy the chain and its 94 screens.
Reading Cinemas' Melbourne-based executive director Wayne Smith declined to comment on the sale.
He referred all queries to SkyCity, saying "it is their sale process, they can talk about it".
But he did comment on the general state of the New Zealand cinema market.
He acknowledged attendance figures in New Zealand had been down last year.
But Smith said this was due to the vagaries of output that had not appealed to New Zealanders.
SkyCity Cinemas also owns 50 per cent of Rialto Cinemas with 22 screens and a 67 per cent stake in Village Cinemas Fiji with 10 screens.
It is New Zealand's biggest chain and has dominated with 61 screens in Auckland and another 10 planned for Westfield Albany in April.
Hoyts complexes at Sylvia Park and Wairau Park have eaten into Auckland revenue.
Reading Cinemas, meanwhile, is under-represented in Auckland.
SkyCity issued a no comment on the sale: "We are looking to sell the cinemas business and it wouldn't be appropriate for us to comment as we progress the sale and potential negotiations.
"As advised on February 25 if a satisfactory price and structure is not able to be achieved at this time SkyCity will focus on enhancing its cinema operations and improving performance."
But if SkyCity was asking too much the SkyCity interim report paints a dark picture of the challenges ahead.
Acting chief executive Elmar Toime, who ran the company from June last year to March 2008, blamed the writedown on underperforming movies.
Hollywood film distributors like Sony's Andrew Cornwell have criticised Toime for blaming output for the writedown of goodwill.
The writedown just a year after it paid its former joint venture partner Village Cinemas $50 million for its 50 per cent stake was because management headed by former CEO Evan Davies had paid way over the odds.
Insiders say that Davies and his former partner Heather Shotter had been strong supporters for the movie business, as had other executives under the Davies regime.
Former SkyCity subsidiary directors included David Gascoigne _ a leading light in the New Zealand film industry _ and his wife Patsy Reddy.
The cinema investment was to give the company a cleaner image in the face of criticism of the casino operations.
In October 1996 Davies hired PriceWaterhouse Coopers media and entertainment division's Australian partner Leibmann to run the cinemas which was planned to have strong expansion.
But with Davies gone last June and other cinema devotees leaving the company the cinemas have largely been cut out of the group.
Meantime the company faces problems over its casino operations, a search for a cinema boss, and lingering interest from a potential private equity buyer for the group.
