BusinessTN

Mike Campbell, CEO of Knoxville-based Regal Entertainment Group, says it's lucky that, when he leased his first movie theater in New Tazewell, Tenn., it was August 1982 and the film was E.T. Blockbuster crowds gave the former supermarket manager a taste of the magic that has kept moviegoers coming throughout--perhaps even because of--recent economic doldrums. If he'd opened at a different time with a different film, he says, his "might have been a very short venture in the movie business." Because when the crowds receded, reality hit: His small-town, single-screen theater was "a dying breed." Spurred on by this insight, Campbell spent the next 26 years reinventing the movie theater to keep the magic alive.

In an industry with slim margins and a slow-growth customer base, Campbell saw the possibility of profit in economies of scale. Founding Premiere Cinemas, he opened 50 screens in 10 locations. Then, he says, "I was faced with either continuing to grow the business, which would require some new equity capital that I didn't have, or just continuing to operate the business at that level." He chose the former, using venture capital to triple, in two years, Premiere's screen presence in small markets across the Southeast.

The 1989 sale of Premiere to Texas-based Cinemark was timely, Campbell says; where Cinemark saw profitable regional theaters, Campbell saw a business limited by scope and geography. So he started over, launching Regal Cinemas and an ambitious new vision: the multiplex that makes a bigger return on its capital investment by locating in populous areas and serving more customers under one roof. Building some theaters and acquiring others, Regal was already the industry leader in 2002, when it merged with United Artists Theatres and Edwards Theatres to form Regal Entertainment Group. Regal now has a presence in 44 of the top 50 U.S. markets, operating nearly 6,800 screens in 551 locations. Campbell says some single locations generate $20 million annually--Premiere's total 1989 revenues.

Campbell's investment in aesthetics and technology has been particularly anticipatory of competing entertainment options and moviegoers' increasingly high standards. Regal's standard cinema features 16 to 18 screens, an expansive lobby, diverse concessions, stadium seating, state-of-the-art sound--and, coming soon, digital projection, a joint venture of Regal, Cinemark and AMC Entertainment. The multiyear, $1 billion digital upgrade will be financed by major movie studios eager to release blockbuster-type films in a digital-friendly 3D format--a proven moneymaker, Campbell says.

But Campbell's not just a big-picture guy. Since 2007, Regal has given movie fans something new to chew on, turning three outdated theaters into dinner-and-a-movie Cinebarres with full-service restaurants. While he plans to open more, he considers the venture a limited but innovative way to "recycle" theaters that otherwise might have closed. Mike Campbell may chair a $2.7 billion-a-year company, but he still has the spirit and the vision of the entrepreneur who resurrected a small-town theater as "part hobby, part community service."