UPDATED JUNE 11 – Attorney General documents obtained through public records request reveal terms of the American Cinematheque’s deal with Netflix.
UPDATED MAY 29, 2020 – In a pandemic, as rioters fill the streets, Netflix quietly purchases the Egyptian Theatre. We continue to call for a public meeting to provide much needed transparency for the dues paying members and wider community.
UPDATED SEPTEMBER 9, 2019 – The Los Angeles Times features our campaign in a front page story. Also, government transparency blogger Adrian Riskin (MichaelKohlhaas.org) publishes emails from Councilman Mitch O’Farrell’s staff regarding Netflix, the American Cinematheque, The Egyptian Theatre, Hollywood Heritage and our campaign.
UPDATED AUGUST 13, 2019 – Public Comment is made at City Hall, and stories we’ve heard about what’s actually happening behind the scenes.
• Will LA Stall Netflix Plan? Deal for Egyptian may face hurdles (Los Angeles Business Journal, 7/19/2019)
• Netflix Planning to Purchase Historic Egyptian Theater (Spectrum News 1, 8/7/19)
• Will Netflix’s Ownership of L.A.’s Egyptian Theatre Spark Backlash? (Hollywood Reporter, 8/9/19)
• Behind the Netflix Bid for Hollywood’s Egyptian Theater (Commercial Observer, 9/3/19)
• What happens when Netflix buys Hollywood’s iconic Egyptian Theatre? It’s complicated (L.A. Times, online 9/6/2019, front page in print 9/9/2019)
• Want a Big Theatrical Release, Mr. Scorsese? How About Broadway? (New York Times quotes and links to our petition, 10/23/2019)
• Ted Sarandos, American Cinematheque board member and Netflix executive, describes “recent purchase” of the Egyptian Theatre by Netflix, plan to make it “a real hub for film culture” and haven for movie aficionados. No such sale has been reported to the non-profit’s membership (Variety, 1/30/2020)
• Our Richard Schave is quoted in this piece that doesn’t just reprint the corporate press release, but digs deeper into a troubling Hollywood land grab. “Netflix Finally Sealed the Deal on Hollywood’s Egyptian Theatre, but Not Everyone Is Happy.” (IndieWire, 5/29/20)
• Chris Lindahl, the only reporter actually asking questions about the American Cinematheque sale of the Egyptian Theatre to Netflix, got the shocking details from the Attorney General. Smells like self dealing. “Although the deal between the Cinematheque and Netflix lasts for 99 years, Netflix is allowed to sell the building after 12 years — and a new owner would be able to kick out the Cinematheque a year after that.” (IndieWire, 6/10/20)
Click here to sign the petition.
Petition reads: As members of the American Cinematheque and patrons and fans of its programming, we demand transparency about the proposed sale to Netflix of the Egyptian Theatre and of the financial status of the non-profit.
The American Cinematheque is a membership-based non-profit organization that owns and operates the landmark Egyptian Theatre on Hollywood Boulevard, a building that was gifted to the Cinematheque by the City of Los Angeles for the symbolic price of $1. We understand that the theater is held in the public trust.
Currently operating without an Executive Director and with its charitable status listed as “Delinquent” due to incomplete tax filings dating back to 2015, the Cinematheque’s board of directors has apparently offered the Egyptian Theatre for sale to Netflix, the employer of board member Ted Sarandos.
The California Attorney General is currently investigating the American Cinematheque for its failure to file required financial information, its claim to have lost this information due to staff incompetence, illness and computer problems, and two unexplained outstanding loans to board members. (PDF link.)
In light of the ongoing financial mismanagement by the American Cinematheque board resulting in potential loss of its non-profit status, the board’s failure to hire a new Executive Director, the potential conflict of interest should board member Ted Sarandos’ employer Netflix purchase the theater, and the failure to inform the members that a financial crisis might require sale of the theater and threaten the very existence of the non-profit, we the undersigned call for a halt to any sale, and a public meeting at the Egyptian Theatre where representatives of the non-profit will explain the situation, take and respond to questions, and engage in a free, open and transparent dialogue moving forward about the future of this treasured membership-based non-profit and its sole asset, the Egyptian Theatre.
The future of the American Cinematheque and the Egyptian Theatre should be determined in an open conversation that includes the members and a qualified Executive Director, and not in secret by the board of directors and Netflix.
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ORIGINAL BLOG POST – April 29, 2019: “Netflix In Talks To Acquire Hollywood’s Historic Egyptian Theatre From American Cinematheque”: What Could Possibly Go Wrong?
The press release, sent out by a firm not associated with the American Cinematheque, must have gone out first thing on April 9. Deadline broke the story at 9:06am, followed by The Hollywood Reporter (10:31am) and Variety (10:50am).
The articles painted a narrative of a win/win solution for a cash-strapped non-profit rescued by a deep-pocketed corporation. The only person named was Ted Sarandos, the American Cinematheque board member who had recused himself from voting on the sale, since he is also an executive at Netflix.
Because the only information about the proposed theatre sale has come from internal sources, with no independent reporting, the news raises many more questions than it answers.
We love the Egyptian Theatre and care deeply about its long history on Hollywood Boulevard, which since the 1990s has been entwined with the American Cinematheque. We’re are troubled that such a major change would be announced as all but a done deal, at a time when the American Cinematheque lacks an executive director (Barbara Smith retired late last year) to advocate for the non-profit’s mission.
And we’re hearing privately from many people in the film revival and historic preservation communities who are also concerned, and confused that, weeks after the proposed theatre sale was widely reported in the industry press, American Cinematheque members have yet to receive any explanation at all.
Perhaps Netflix really is uniquely positioned to help a treasured non-profit that is in dire straits. But before a landmark theatre that was gifted to the non-profit and the city by L.A.’s redevelopment agency is sold, the board owes American Cinematheque’s members and the community an open and honest conversation about how and why it’s come to this.
1. What are the board’s reasons for considering a sale of the Egyptian Theatre?
2. When did the board begin to discuss selling the theatre, and what motions were put forward?
3. Have any alternatives to a property sale been explored?
4. Have any potential theatre buyers other than Netflix been approached?
5. Are costly improvements that were funded by donations, like the 2016 state-of-the-art enclosed nitrate-stock projection booth, being included in the proposed sale? If so, what are the potential tax ramifications to donors including The Film Foundation, the Hollywood Foreign Press Association, TCM, and the Academy Film Archive? Have donors been notified?
6. What are the conditions of the Community Redevelopment Agency’s $1 sale of the Egyptian Theatre to the American Cinematheque, and is it actually legal to sell the theatre to anything other than a non-profit organization that shares its mission?*
7. Why has the non-profit failed to file its required tax forms dating back to 2015, resulting in a “Notice of Intent to Suspend or Revoke Registration” being issued in April 2018, and why is it currently listed on the State of California Attorney General’s website as “Delinquent”? What actions are being taken to resolve these issues?
8. Is the board conducting an active search for a new Executive Director, and if so what is the status of this effort?
• A new owner of the Egyptian Theatre could seek permits to do major interior improvements. While historic elements of the structure are protected under the city’s landmark ordinance, public access and use as a movie theatre are not protected. It could become a corporate media VIP lounge, restaurant, private club, nightclub, co-working space or even a private residence.
• The news stories based on the press release suggest there would be an agreement from Netflix to allow the American Cinemetheque to continue using the theatre on weekends. Even if entered into in good will, such an agreement could break down for many reasons. Netflix might sell the theatre to another entity. Rental costs might become too high. The owner might decide that other weekend uses are too profitable to miss.
• Assuming the weekend schedule did work out, the American Cinematheque would have to focus on more commercial programming during its limited screening times. Membership would certainly decline among patrons who frequent the Egyptian Theatre and enjoy less commercial programs. Without the caché of the flagship Hollywood Boulevard theatre and high profile Cinematheque-associated festivals, fundraising for the non-profit could become more difficult.
• The American Cinematheque has business relationships with independent festival programmers like TCM, Cinecon and Noir City and industry unions like the Art Directors Guild. Could these entities continue to book the theatre, for the necessary dates and at a reasonable cost, if it was sold to a corporation?
• There are a number of historic businesses in Hollywood that benefit from a symbiotic relationship with the American Cinematheque, and would see reduced revenues if the Egyptian Theatre ceased to be a repertory house. These include The Larry Edmunds Book Shop, Miceli’s and Musso & Frank.
• The American Cinematheque through its non-profit mission provides some of the most affordable and eclectic cultural programming in Hollywood, not just on Friday and Saturday nights, but all week long. This is highly valued by residents, visitors and the local businesses that they patronize.
• How many jobs would be lost if the theatre was sold and the American Cinematheque scaled back its programming?
• And finally, there’s the matter of the Egyptian Theatre’s loading dock. Access to the historic loading dock is currently threatened by potential redevelopment of the parking lots behind the theatre. Commercial developers interested in the space have expressed a willingness to design any project so that the loading dock remains functional, as a courtesy to a non-profit providing a treasured service to the community. Just down Hollywood Boulevard at the Fonda Theatre, that commercial entity is not getting such courteous treatment from the developer next door, and there’s no reason to think that Netflix would. Without access to its loading dock, the Egyptian Theatre would no longer be a viable performance space able to accommodate the type of productions that it has hosted since Sid Grauman opened the theatre in 1922. It would be effectively neutered.
We believe that the American Cinematheque board owes the community a transparent conversation about why such a drastic change in operation is being proposed for the non-profit. We call on them to halt discussions of selling the Egyptian Theatre until such a time that the community is better informed, and the concerns of membership and preservationists are heard. We’ve asked for a meeting with board member Ted Sarandos, who recused himself due to his Netflix ties, but have not heard back.
[Update July 4: please ignore the following instructions and just sign the petition to express your concerns directly to the American Cinematheque, Mitch O’Farrell’s Office and the state Charities Registry]
If you believe that the American Cinematheque board owes Los Angeles an explanation, please share this link with your friends and let the board know with an email to firstname.lastname@example.org, and copy your message to email@example.com (that’s us) and firstname.lastname@example.org (in Councilman Mitch O’Farrell’s office).
We almost lost the Egyptian after the Northridge Earthquake; millions in public funds and countless volunteer hours saved it. Lets not lose her now.
*Mission of the American Cinematheque: The American Cinematheque is a viewer-supported cultural organization dedicated exclusively to the public presentation of the moving picture in all its forms. The Cinematheque presents the best of film and video – ranging from the classics to the outer frontiers of the art form. The American Cinematheque was created in 1981 to honor and promote America’s indigenous art form — the moving picture; to present the full range of film and video, not otherwise available, to the widest possible audience; to establish a forum for an on-going dialogue between filmmakers and filmgoers; to provide a high profile exhibition facility for other independent film and video organizations; and to encourage and support new talent by creating a showcase for their work.