About the CBG

A few years ago, several smaller theatre owners who served on the Independent Theatre Owners Committee of NATO came together to form the Cinema Buying Group LLC, which at the time was designed to obtain group discounts on theatre supplies. A few months ago, the governing documents of CBG were enhanced to facilitate acquiring digital cinema equipment and service. On October 26, 2006, CBG members voted to dissolve the separate for-profit entity and to reconstitute as a program within the National Association of Theatre Owners. As described in the CBG-NATO Participant Agreement:

Purpose

CBG-NATO has been formed to enhance the ability of its Participants to obtain cost-justified discounts and more favorable payment terms with respect to their purchases of goods and services used in their operation of motion picture theatres and to assist industry manufacturers and suppliers in promoting their goods and services and in obtaining accurate information regarding product performance in the industry.

Separate Program Within NATO

CBG-NATO is a buying program for independent theatre owners and operators, and subject only to such NATO oversight as trade association law and fiduciary duties dictate. CBG-NATO is financially self-supporting and has a separate dedicated bank account. The program has a separate website, and its principal place of business is determined by the location of its managing director. CBG-NATO’s managing director reports to the chair and vice-chair of NATO’s Independent Theatre Owners Committee.

Cost of membership

Currently the annual membership fee is $150 for NATO members and $250 for non-NATO members. Fees will be prorated for applicants joining part way through the year.

Potential

Because CBG lacked full-time direction, and had been managed by generous but very busy volunteers, it never grew to its full potential. Nonetheless, the new structure of the group can serve as the foundation for a digital cinema buying group. This new digital cinema buying group, however, will no longer merely confer certain benefits on its members. It may mean the difference between independent theatres existing at all in the new digital world. It is critical, therefore, that the digital cinema buying group expand its membership base as quickly as possible.

The negotiating and buying power of this group is only as strong as its membership base. The group needs to represent several thousand screens to be truly effective. We need you to join the Cinema Buying Group now. The documents governing the Cinema Buying Group-NATO program are included with this letter for your review. I want to draw your attention especially to section 6(g) of the CBG-NATO Participant Agreement, entitled “Special Provisions for the Acquisition of Digital Equipment and Service.”  These provisions spell out in detail what we need, as a committed group of independent theatre owners, in negotiating a favorable digital cinema equipment and service deal.

We cannot give you all the answers at this stage—indeed, you, as a new member, may well contribute to answers—nor can we issue any guarantees or assurances. But we know that independent exhibitors will substantially improve our opportunities in the digital world if we work together.