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. Last Updated: 07/27/2016

Viacom to Build Russia's Largest Movie Theater

CANNES, France -- Viacom is planning to open a network of large movie theaters in Russia, beginning with what the international telecommunications giant says will be the biggest multiplex in the country.

Viacom president Sumner Redstone said Wednesday that National Amusements, a Viacom subsidiary managed by his daughter Sherl Redstone, would provide the investment for the project. National Amusements is among the top 10 largest cinema operators in the United States and Great Britain.

Construction of the first movie theater will start this year, Redstone said. Work will begin in 2003 on the second, which will be completed within 12 to 14 months.

Redstone was unable to specify where the cinemas would be built, saying he does not know Moscow very well. But according to information obtained by Vedomosti, the first movie theater is to be built in the Mega retail center, which is being constructed by Swedish furniture giant IKEA in southern Moscow.

Mega is due to open fully in December, although parts of the center are already operating.

IKEA is to sign a deal with Kinostar, which is to build the 11-screen theater, said Peter Odlund, who is in charge of IKEA's Mega project. National Amusements is a major shareholder in Kinostar.

"The contract will be signed soon, we are currently ironing out the details," said Odlund, adding that the movie theater should be up and running before winter.

Redstone declined to name the size of National Amusements' investment in the movie theater.

Andrei Kim, deputy general director of state-owned movie theater company Roskinoprokat, said that a five- or six-screen multiplex requires $4 million to $8 million in investment. Formula Kino's nine-screen movie theater in the Atrium business center near the Kursky train station cost $6 million.

Foreign investors have shown considerable interest in the Moscow movie theater market, industry insiders say.

Roskinoprokat is negotiating for investment in a project to build a multiplex in Moscow in cooperation with Narodnoye Kino-Stolitsa and some Asian and European companies, Kim said. Narodnoye's shareholders include the Moscow city administration.

"Offers for investment come through virtually every week," Kim said.

Large foreign-owned multiplexes could threaten Russia companies like Imperiya Kino that manage single-screen movie theaters, said Alexander Budyak, general director of DVD-Groupe, which is transforming the local Baikal and Polyarny single-screen movie theaters into multiplexes.

"International experience has proven that multiplexes have the upper hand over single-screen cinemas," he said.