CinemaCon 2023: John Fithian Looks Back on His Tenure at the National Association of Theatre Owners

John Fithian, Courtesy of Variety - The Children's Charity

John Fithian’s first days working with the National Association of Theatre Owners began in 1992, when he was brought in to assist the group’s lobbying efforts with D.C. decision-makers. What started as a consultancy evolved into an influential tenure as NATO’s president and CEO, a post he has held since January 2000. In this exclusive interview with Boxoffice Pro, Fithian looks back on the highlights, lowlights, and everything in between during his term at the helm of the world’s most influential cinema trade group. From the wave of consolidation and bankruptcies of the 2000s to the implementation of digital cinema, creation of CinemaCon, and through the pandemic—Boxoffice Pro salutes Fithian’s accomplishments and service on behalf of a grateful industry.

John, you’ve been part of this industry for many years. How did you first get involved with NATO?

Yes, that is correct. In 1992 NATO was looking for additional lawyer [or] lobbyist help in Washington D.C. There were a variety of issues pending in Congress and regulatory branches of the government, so Bill Kartozian and others at NATO hired me as outside counsel. I served as outside counsel for NATO for eight years, and among all the clients I had in my law firm, I found theater owners to be the most passionate, committed, energetic people I’d ever worked with. As a lawyer at a big law firm, I had an opportunity to serve as counsel to boards of various organizations, attended all their board meetings, and I noticed something very different about the board meetings with NATO. Their work was also their pleasure and their life’s calling. Their passion for showing movies in cinemas was so contagious that I fell in love with the members of the association. I had a lot of First Amendment work at my law firm in Washington, and the free speech component of what cinema offers to the country is very important to me. I think the passion of the theater owners and the free speech concerns are what enamored me most about NATO and the industry.

When you first began working with exhibitors in 1992, who were the executives that helped you get a better understanding of the industry?

There were so many. I remember Paul Roth, a longtime independent theater operator in Washington, D.C., who was chairperson of the government relations committee of NATO. He was the one actually tasked with hiring me as outside counsel; he was very influential. Bill Kartozian himself, one of the smartest lawyers I’ve ever met, was very helpful and influential for me. Marianne Grasso—now Marianne Anderson—who was the executive director of NATO with Bill, and then with me, taught me a lot about the industry and its members. Later on, Mike Campbell at Regal and Barrie Lawson Loeks at her theater chain in Michigan—she was the chairwoman of NATO when I was hired full time. Mike and Barrie, of the NATO board, were the two that I took the most counsel from in the transition from being outside counsel to president. Then Jerry Forman, of the Pacific-Arclight family, and longtime chairman of NATO, is the guy that really introduced me to Hollywood the industry at large. To this day, Jerry is still very active in NATO on our investments committee, among other projects. There are so many other names, but I’ll stop there before I get in trouble for not mentioning someone.

NATO has evolved considerably as a trade group since 1992. What were the association’s main concerns back in 1992, when you first started?

NATO, as a trade body, represents its members on common issues of concern. We don’t get involved in competitive issues—we don’t set prices, we don’t talk film terms, and we don’t get involved in which theaters are building where. Those are all competitive issues to be left to the marketplace. We work on industry-wide issues that affect everyone. There are two main components to that: One is in Washington, and one is in Los Angeles. Therefore, we have offices in both cities, and I’ve maintained homes in both cities for 25 years, going back and forth all the time. The work in government relations in Washington and the work in Los Angeles, with the studios and creative community, are both of paramount importance.

In the 1990s, the biggest challenge that NATO confronted was the response to violence in American society and its possible asserted connection to entertainment. The shootings in Columbine were the most dramatic turn that focused some policy makers’ blame on violent entertainment: video games, movies, and music. During the Clinton administration, there was a tremendous examination of the issues of violence in the media. There were proposals in Congress to take our voluntary rating system, that the MPAA and NATO administered jointly, and write it into law, and fine a theater owner $10,000 every time they sold a ticket to an R-rated movie to someone who is underage without checking their ID. There was legislation pending to criminalize the exhibition of certain types of violent content that went way beyond the laws of obscenity or nonprotected First Amendment speech. There were proposals to tax violent media, and these grossly unconstitutional concepts were gaining traction and getting lots of votes in Congress. As outside counsel at a big law and lobbying firm working with lots of the members in the ’90s, we defeated all that legislation and came up with voluntary guidelines instead. Bill Kartozian, Greg Dunn from Regal, Barrie Lawson Loeks, Wayne Anderson, and I all went to the White House with President Clinton to announce the agreement on our voluntary standards of how to enforce the rating system with new protocols, with rating compliance officers at theaters to make sure that we were checking IDs so the kids would not get into movies they shouldn’t get into. We announced all that on the White House lawn in front of the media. That turned the tide and stopped the crazy legislation pending in Congress. Among all the big issues of my time as outside counsel, that was the most memorable.

I’m surprised you didn’t mention the Star Wars fans …

[Laughs.] Some of these memories you try to forget! Just as the violent media legislation was an example of what we do in terms of government relations, the transition to digital cinema is an example of what NATO does with industry relations. The transition to digital cinema has been one of the biggest endeavors of NATO during my tenure, in that exhibitors needed the transition to occur carefully. We needed technical standards to promote interoperability and compatibility so the equipment would be affordable and work better. We needed quality standards so that we weren’t replacing film with something inferior. We needed an equitable business model. At the outset, the studios knew that they would save a couple of billion dollars a year in the cost of film prints by switching to digital. What was in it for exhibitors? More consistent quality of film that wouldn’t degrade over time, the ability to be more flexible in programming and switching things around and maybe doing some live events and some alternative content, but the upfront benefits were much clearer for distribution than they were for exhibition. We tried to slow things down and wait until there were technical standards and business models established, which resulted in the virtual print fee (VPF) model, before exhibition would go along with the transition to digital cinema. This was a Herculean effort, I traveled around the world to places as far-flung as Japan and Australia and across Europe to have exhibitors and trade associations join us in demanding these standards and business models before the rollout would occur. I think that was the first time that exhibition had come together globally on a topic: the need for standards and fair business models on digital cinema. We forced our way into Hollywood with those demands in order to make the transition happen correctly.

That’s the background for George Lucas not being happy with how long we were taking to make this transition. George Lucas and his production partner, Rick McCallum, told all their Star Wars fans that digital cinema needed to be out by the next episode of Star Wars—and that NATO was holding it all back. Rick McCallum, George’s producer then, stood up at a Star Wars fan convention in Indianapolis and said, “You deserve to see Star Wars in digital, not film. NATO is holding us all back. Contact John Fithian to get what you want in seeing Star Wars.” The fans bombarded our offices: They called, they faxed, they went crazy and shut down our electronic communication systems at the time. I finally created a stock response: If you want to pay $50 a ticket to see the next Star Wars, [we are] happy to convert to digital now without a good business plan. If you don’t, why don’t you let us do this more carefully? It was a sarcastic response, but it worked, and they shut up. There was a division in the creative community. George Lucas, Jim Cameron, and a host of other people wanted digital cinema yesterday, and Steven Spielberg, Chris Nolan, and a host of film devotees said, “Don’t go digital ever.” The industry was caught in between, trying to do it correctly. In the end, I think digital cinema was rolled out correctly. The VPF model was created to subsidize the expense, the technical standards really worked pretty well, and the transition happened carefully instead of haphazardly. But it was a struggle, and Lucas didn’t help.

At that time, the digital cinema transition was an existential question for a lot of exhibitors, many of whom didn’t believe they could afford or survive the transition. This set the stage for your taking the job at NATO, not only during this massive global transition to new technology, but also during a period rife with bankruptcies and consolidation. Can you take us back to those early years, when you found yourself in the middle of a revolution?

[Laughs.] I think Bill Kartozian proved that he was pretty smart in timing his retirement! I was a young, green lawyer just fascinated with the industry. I did not realize that in January of 2000, when I succeeded Bill as president of NATO, I needed to be an expert in digital compression and encryption technologies and bankruptcy law at the same time. There was a lot happening. The year 2000 had a host of very big bankruptcy organizations by the top companies and also had the beginnings of the negotiation on the transition to digital cinema. Things got really busy, really fast. The industry bounced back pretty quickly after that rash of bankruptcies in 2000, and by 2002 we had the biggest admissions year in the history of modern business. It’s part of the cyclical nature of exhibition: We’ve been through ups and downs over and over again for 100-plus years. Every time that there’s a challenge to the business, prognosticators want to declare cinema dead and write us off. The advent of television was going to be the death of cinema, the advent of VHS was going to be the death of cinema, then DVD, then streaming, then the pandemic. There are some downturns in the economics of this business model, but the reality is, people want to leave their homes and go out and have a shared cultural experience with strangers sitting down the aisle from them, laughing and crying and responding to the same message of a movie on the dark screen with nothing to distract them. They always come back. People have said that the pandemic killed the cinema. If you look at 2022, the data suggests that the only thing missing is the number of films in the marketplace for a full return and a growth pattern like what we had prior to the pandemic. The reality is, in 2022 we had 63 percent of the wide-release movies—defined to be those released in over 2,000 screens—and we had 64 percent-plus of the box office compared to 2019. In other words, on a per-movie basis last year, we did as well or better than we were doing pre-pandemic—we just didn’t have enough movies. If you look at the start of 2023, January is substantially above January 2022 and getting pretty close to 2019 numbers. As you look through the schedule, particularly this summer, we’ve got a bunch of great movies appealing to all demographics in different genres. That only grows as we approach the end of the year and gets even bigger in 2024. It leads us to think, as it always has, that the latest prognostication of the death of cinema is completely wrong. If you look at our growth patterns now, it’s on the way back up to significant strength and health over the next year or two.

You were more than a lobbyist at NATO. You’ve been very outspoken in the press, never shy to correct assumptions from journalists and bad takes from analysts. The industry could always rely on you to stand up, and speak out, on behalf of exhibitors in the media. That’s not something we saw from your predecessors in this role. How did that come about?

In the ’80s and ’90s, NATO was a very successful trade body focused on government relations and legal issues like compliance with the Americans with Disabilities Act, and not really a public representative of the industry. That was just the choice of the board back then. They wanted a pretty discrete focus on legal and governmental issues. NATO had to evolve alongside the expansion of digital media in this communications age. Part of the reason why I was interested in the job is that the board of NATO knew it needed to evolve and knew it needed to be more public facing. I was given a pretty clear mandate coming in: to do more of the public representation of NATO than had been the traditional mandate. I came into the job with a lot of public speaking and press experience. I grew up in politics; my dad was in Congress, and I would be on the campaign trail dealing with the press with him. As a lawyer, I had many clients that needed public representation. I represented the Major League Baseball Players Association during the strike of ’93-’94, which had a lot to do with public messaging, and I brought that experience into the job. More importantly, we built a team at NATO that responded to the increased mandate. My longest-serving colleague, Patrick Corcoran, who is our chief communications officer, was right there with me as the communications and public representation of NATO expanded. Patrick probably has the best relationship with trade reporters of any industry representative in Los Angeles; he’s really helped drive the public representation and communication side of what NATO does.

Honestly, the thing that makes me the proudest of my career at NATO is not what I did individually, but the team that I amassed and grew and what that team has done. There are a bunch of really, really talented people here right now. We have our rising star Jackie Brenneman, who is our executive vice president and general counsel, and who is doing a bang-up job launching our Cinema Foundation. I got a brand-new CFO, who is really helping us get the finances and the budget all put together. Our conventions team, including Mitch Neuhauser, Matt Pollack, and Matt Shapiro, I think, is the best public event organizing team in the industry. I hired those guys 12 years ago. Todd Halstead, who is our director of government relations, has a ton of experience in public issues. His first job in life was on Capitol Hill, and then he came to NATO and has been with us off and on for a very long time with a great skill set. Kathy Conroy, who recently retired as our COO, is one of the best organizers I’ve ever worked with. Before Kathy, MaryAnn Grasso (now Anderson) had the same kind of fantastic organizational skill sets. The list goes on and on. Even though I am often the public face of NATO, I think what the members understand is that the team at NATO is extraordinarily solid, and that’s where a lot of our success comes from: We work together really well as a team.

You mentioned the inclusion of an events division at the National Association of Theater Owners. Can you walk me through that acquisition of ShoWest and the creation of what is now known as CinemaCon?

When I started full time in January 2000, it wasn’t just about bankruptcy law and the digital-cinema transition. Bill handed me some ideas on the future of conventions and events—I’ll give him a lot of credit for this. I finished the negotiations of the sponsorship deal with the Sunshines on ShoWest at that time, a show that was founded by NATO of California long before I became president. That show grew to the point where NATO of California decided that it should be professionally managed, so they brought in the Sunshine Group—Bob and his brother Jimmy at the time, and eventually Bob’s nephew, Andrew—all fantastic organizers, to run and eventually buy and take over ShoWest. In January of 2000, I was jumping right into negotiating what that sale would look like. NATO of California sold the show to the Sunshines, and national NATO agreed to sponsor the show as our official convention, so it was a three-way deal where NATO of California sold the show to Bob and his team, but part of that was contingent on us agreeing to a 10-year sponsorship where it was national NATO’s official show. We started my tenure by sponsoring ShoWest, and that worked really well for 10 years. Bob Sunshine is a genius event organizer; he’s the one that trained Mitch Neuhauser, whom I later hired. At the end of that 10-year period, instead of renewing the sponsorship agreement, despite the talents of the Sunshines, we concluded with our board that a for-profit third-party organization is always going to have slightly different motives in running an event than we would ourselves. Instead of renewing a sponsorship agreement with Bob, we decided to go our own way and do our own show, making it a nonprofit event. Yes, NATO takes significant revenues out of CinemaCon, but the idea of launching CinemaCon was to have a show owned by the membership of NATO and designed to advance the membership of NATO, so we launched CinemaCon in 2011. I hired a fantastic team that has put on CinemaCon 11 times now. The show has grown to be the most significant gathering in the cinema industry globally. We have about 100 countries worth of people, exhibitors, and suppliers that come to the show. All the major studios support it. Some of our members doubted that we should take it on at the time, and now I think it’s one of the most successful things that we’ve ever done.

NATO’s membership has become more globally focused with the multinational expansion of major exhibition circuits. You also led the charge to open up NATO and bring in an initiative like the Global Cinema Federation. Can you go into that strategy and how it sets up NATO and its interests for the future at an international level?

Early on, at the very beginning of my career, I tried to reach out to bring exhibition leaders around the world together on a common purpose, because I saw that the challenges or potential benefits to movie theater owners were migrating from mainly local concerns to global ones. In the old days, it was, “What’s our local tax policy? What are our local distribution models with the studios?” and it was different all around the world. As the migration to digital cinema was taking place, and consolidation was occurring across exhibition, it became apparent that we needed to have a global unity of purpose as exhibitors. I spent a lot of time traveling the world and talking to exhibition leaders in other territories. Our leading companies—AMC, Regal, and Cinemark—are all part of global circuits. With the drive of then-chairman John Loeks, a local exhibitor who only operates in the state of Michigan, we set out to be better united globally. As chairman, John was very determined to have us go global. That’s how we formed the Global Cinema Federation, which our partners in Europe at UNIC, who have been stellar partners of ours on many different issues, came together with us in launching. Phil Clapp and Laura Houlgatte are two of the best association leaders in the world. They partnered with us and with Cinépolis CEO Alejandro Ramirez Magaña to form the Global Cinema Federation (GCF), with Alejandro as its chairman. We built out an executive committee of leading exhibitors around the world—including Asia, Latin America, Europe, North America, Australia, and India—and then a broader membership that’s open to any exhibitor anywhere in the world. The GCF has had some significant impacts on policy, position papers, and guidance for exhibitors during the pandemic.

Along with your successes at NATO, also came several difficult crises to overcome. We tend to focus a lot on the pandemic because it’s barely in our rearview mirror, but you also had to navigate some very complicated situations: the tragic shooting at the Cinemark in Aurora, Colorado, and the fallout of the Sony hack around the release of The Interview. Looking back at some of these challenging moments, what are the lessons you took from the most challenging moments in your role?

Those are two really good examples of what I’ll call crisis-management challenges, because they were both gigantic crises that demanded immediate action. There were some fascinating stories in that Sony hack that maybe someday I’ll write about in a book. The lessons learned from them was the need to have close and pre-established ties with government bodies and law enforcement so that when you hit a crisis point, you know who to go to immediately. We created a network of security officers where we have 24/7 access to somebody at all the companies, and we maintain that database in-house at NATO so we know that we can reach people on a local, regional, national, or international basis instantaneously if we need to. Unfortunately, we’ve had to use that network several times. There have been several movie theater shootings in my tenure, there were significant security threats around the movie Joker when it first came out. The Sony hack created a crisis of national politics and international politics. We’ve become adjunct to law enforcement on a lot of issues, and that security network is a pretty important part of what NATO does.

The Sony hack was peculiar in its geopolitical nature. How did you handle something of that magnitude?

During the Sony hack, the first attack was obviously on Sony. The second threat was to movie theater operators. We spoke to all the security experts, talked at length with the Department of Homeland Security (DHS), and had multiple calls over a very short time frame with the security experts at all of our theaters and their CEOs. In the end, most major circuits decided not to play the movie at the outset. The irony is that our contacts at DHS told us this threat is real and coming from North Korea; you should take it seriously. When you have governmental advice like that, you really have no choice but to pull back on the release of the movie.

We get through all that and then I’m flying to London in mid-December for both meetings and the celebration of my birthday, which is in mid-December, and the phone rings. “You have to listen to what the president is saying right now!” And on TV, there is President Obama saying he wished the movie theater industry would have talked to him because he would have told them it’s OK to play this movie. I love President Obama—but we had actually requested a meeting with the president and his chief of staff before I left D.C. in order to discuss this, precisely because we were very worried about what DHS was telling us. And yet, that was the public response, and that’s what we had to work with from the White House and Sony’s top leadership. In the end, we protected our cinemas the best that we knew how.

Now that we’ve talked about the challenges during your tenure, what are some of the successes that you’re proudest of during your time at NATO?

It’s difficult to know where to start, because we’ve gotten involved in so many things over the last 30 years. I think that working with the creative community to promote and support the primacy of theatrical releases is the most important thing that NATO has done—and the most important thing NATO will continue to do after I retire. There are many people in Hollywood who make movies for the big screen. We’ve worked with a lot of those folks over time to make sure that our supply of movies and the existence of a theatrical window continues. There are a lot of really significant names involved in that effort, but Christopher Nolan and Emma Thomas—as husband and wife, filmmaker and production partners—stand above anybody else in this industry in what they have done to support the theatrical experience. I am very honored that as my last official act as NATO president, on Thursday night at CinemaCon, I get to present our Spirit of the Industry Award to Chris Nolan and Emma Thomas for all that they have done for cinemas and the theatrical experience. They are genius filmmakers and deeply caring people about the art form. NATO has worked very hard over the decades to develop those types of relationships with the creative community in Hollywood. What Chris, Emma, and Warner Bros. did in bringing Tenet to the market when nobody else was bringing movies to us was a big deal for exhibition.

The second is successfully managing, more often than not, the government relations impact on our members—both positive and negative. Working to get cinemas reopened safely by lobbying all the state offices during the pandemic is an example of that. We hired epidemiologists, developed safety protocols, and explained our findings to government officials all across the country and around the world, that you can operate cinemas safely coming out of this pandemic and that’s what got them open again. That’s what got films back. That is why a positive approach to government relations is right up there with a positive relationship with the creative community as the two most important things we’ve done during my tenure. The grant program that Congress approved for midsize and smaller exhibitors was gigantic. The lesser-known tax provisions of the net operating loss carryback issue, which sounds like a snore but was extremely important to our biggest members, that is another example of positive government relations.

If you could have another crack at something—anything—during your tenure, what would it be?

That’s easy. I never would have said, on stage at CinemaCon, that I watched 12 Years a Slave at home while giving my State of the Industry remarks. That was the dumbest thing I’ve ever done in my career.

I was trying to describe the power of cinema and what it’s like to have an immersive experience that is so powerful, in fact. I’d watched all the Best Picture nominees in theaters except for one—because it was so intense. It was meant to be a compliment about the movie and about cinema technologies, and instead, the folks at Fox went nuts and made a huge deal out of it. Chris Aronson and Jim Gianopulos are two dear friends that I respect tremendously—but man, they really generated a ton of press about how stupid that was—and they were right. If I could take one thing back about my career, that would be it.

All in all, not that bad when we take everything into account. To close out the conversation, your successor will begin his term right after the conclusion of CinemaCon 2023. What advice would you give him?

Say yes only if you’re really passionate about what movie theater operators do, why it’s important to the cultural fabric of the country and the world, and why these free speech principles of open dialogue and community setting are essential to who we are as a country and a democracy. If you believe that, say yes, because there’s a whole lot more money to be made doing something other than running a nonprofit trade association. You got to do it for the right reasons. You have to be able to spend time traveling like you would not believe. I have made 240 trips between Washington and Los Angeles over my career—and we have members in 100 countries. So, if you really believe in what this industry is about, and you’re ready to go for it, then say yes. That’s the best advice I would give.

John Fithian, Courtesy of Variety - The Children's Charity

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