Few executives have commanded a position of power on par with Cineplex Entertainment president and CEO Ellis Jacob, Playback’s 2005 Person of the Year. His company’s surprising $500-million midsummer acquisition of its larger rival, the Viacom-owned Famous Players, has vaulted the Onex-owned exhibition house into rarefied territory.

Consider this: When legendary movie mogul Adolph Zukor faced the American Federal Trade Commission for the first time in 1923 on charges of monopoly, his Famous Players-Lasky owned 2.2% of the theaters in the U.S. (but took in 67 cents of every dollar at the box office due to its ownership of Paramount content). With the addition of the Famous circuit, Cineplex now has 1,270 of the approximately 3,000 screens in Canada and controls an estimated 75% of the Canadian box office, which amounted to $910 million in 2004.

Jacob ingeniously pre-empted a potential public storm and leveraged his position with Viacom by making advance trips to the Competition Bureau for an advance ruling request.

‘It’s a testament to a whole other side of Ellis that I wasn’t familiar with – political savvy and diplomatic skills,’ marvels longtime friend and associate, producer Robert Lantos. ‘It could have gone the other way.’

Ellis’ argument in Ottawa was the same that Sony-owned Loews made to the Federal Trade Commission when it bought Cineplex in 1998.

‘We took the avenue that movies were competing with other forms of entertainment,’ Jacob recalls in an interview with Playback in the screening room at the Cineplex head office in Toronto. ‘They didn’t accept that as our pitch. They went through market-by-market, and we had to divest close to $100 million of box-office revenue, which is a big number, because it took me a good five years to build [exhibitor] Galaxy to that stage.’

Oddly, the Competition Bureau was not concerned, as it notes in its technical backgrounder that ‘the vast majority of Cineplex Galaxy and Famous Players theaters are located in free zones where they do not compete for film.’

Famous and Cineplex had similar buying patterns before the acquisition, but the dust has yet to settle on the deal, so it’s hard to say what kind of impact the monopoly will have on the Canadian motion picture industry. One thing is for certain – Ellis Jacob may be the most reluctant and unassuming film mogul in history.

When he immigrated to Canada from India in 1969, his passion wasn’t film, but numbers. He completed his bachelor of commerce degree at McGill, and then an MBA at York University, which included a film course, and worked his way up to VP finance at communications firm Motorola. After Motorola COO Harold Kramer left for the CFO job at Cineplex, he suggested Jacob join him as VP finance.

Jacob interviewed with Cineplex principals Garth Drabinsky and Myron Gottlieb, but turned them down, saying he didn’t really think the movie biz was for him. But they twisted his arm and he landed at Cineplex in October 1987, in the midst of the company’s buying spree of theaters all over the U.S., the Film House post shop (now Deluxe Toronto) and a theme park in Florida. At its peak, Cineplex was the largest exhibitor in North America, with 1,800 screens and 500 theaters.

His first day on the job was a bit of culture shock, having come from a multinational tech giant to a company where things were, according to Jacob, in total chaos.

‘I remember walking in here and I didn’t have an office. And I didn’t have a telephone,’ he recalls. ‘I said to my friend who had hired me, ‘Man, you got me into a great job.”

But it was an exciting time to be in the industry in Canada, and a great learning experience for Jacob, who rose to CFO by 1989. But the bottom was about to fall out.

Both Drabinsky and Gottlieb were ousted later that year when American media megalith MCA (a 49% owner at the time) claimed to the board of directors that Cineplex Odeon was half a billion dollars in debt. Jacob was left to pick up the pieces.

‘Those were some of the hardest years I’ve ever lived through,’ he says. ‘We were in so many different businesses that we had to get out of, which took a lot of work. It wasn’t until 1993 that we got out of the woods as a company.’

And you believe the soft-spoken Jacob when he says that he gained one very important piece of wisdom from that volatile era at Cineplex. ‘I learned you have to stick with what you know,’ he shares.

By the time he moved into the COO position at Cineplex in the mid-’90s, he had learned so much, in fact, that when Lantos and Victor Loewy were about to merge their Alliance Communications media company with Atlantis Communications in 1998, they sought his help.

‘He’s somebody that I’ve thought is an absolutely superb, astute businessman with a tremendous knowledge of the film, exhibition, and distribution business,’ says Lantos. ‘That is why I invited him to join the Alliance board when I was the CEO. He’s got a first-class brain for seeing through deals and digesting numbers, and making situations profitable. He has a rare gift.’

Jacob spent four months on the deal, and Atlantis CEO Michael MacMillan, who would end up leading the merged entity, asked Jacob to stay on as head of integration. Again, he was reluctant to make a commitment – unless they met one condition. ‘My dream is to build theaters in small towns,’ he recalls telling them. He became a consultant with a one-year non-compete clause. When that expired, the idea of Galaxy Entertainment was born.

The concept, backed by Jacob, former Cineplex Odeon exec Steven Brown, majority shareholder Onex, Lantos, Loewy and Ontario Theatre Group president Norman Stern, involved building cutting-edge theaters in mid-size Canadian markets. But while North American box office was on the uptick, there was no shortage of naysayers pointing out that people in the sticks hadn’t gone to movies in 10 or 15 years.

‘I believed it would work because these people are no different than us in the bigger cities,’ says Jacob. ‘They have less alternatives of things to do. They had very poor theaters, or no theaters at all. And I wanted to bring entertainment back to them.’

The first Galaxy theater opened in Sault Ste. Marie on June 6, 2000, followed by one in Peterborough in July, and, after that, nearly 20 launched before Jacob came back to Cineplex. Onex and Oaktree Capital Management had acquired Loews Cineplex Entertainment and later merged the Canadian assets of Cineplex with Galaxy, installing Jacob as its chief executive. The newly formed Cineplex Galaxy went public in November 2003.

‘Some of the best moments of my life were standing watching people lined up around the corner in Cornwall to see the first show of Spider-Man,’ Jacob remembers with pride. ‘I asked some of the kids what it meant to them. They said, ‘Hey, dude. This is bigger than Wal-Mart.”

Like exhibitors the world over, Jacob depends on Hollywood product. And this year was soft until Harry Potter swept in on his Nimbus 2000 broom for his fourth go-round. When asked what a Cineplex monopoly will mean for Canada, Jacob responds matter-of-factly that, from a consumer perspective, nothing will change.

‘There’s an issue of price elasticity. If I was alone in Cornwall, I couldn’t charge people $20. I had to be reasonable to what the population could afford. The same thing in Toronto. From a distributor perspective, we have screens and we’ve gotta fill them. So it’s a partnership with the distributors.’

Canadian Association of Film Distributors and Exporters president Ted East, a former Alliance Atlantis exec, is relatively unconcerned about the consolidation of so many screens in one hand.

‘Ideally we would rather have competition in most of the country than not,’ East says. ‘But we’ve had assurances from Ellis that it’s going to be business as usual and we’re hoping that it’s going to be.’

And then there is the matter of getting Canadian product on the screens and audiences out to see it.

‘I’m the biggest supporter of Canadian film,’ says Jacob. ‘But one has to understand that the consumer comes first. If the consumer is not interested in seeing the movie, there’s nothing we as a company can do.’

CFPTA head Guy Mayson notes Jacob’s soft spot for Canuck product, and anticipates exploring ways to work together.

‘The overriding goal is to recognize the partnership between producers and exhibitors,’ Mayson says. ‘And the exhibitors are the point of contact with the audience. They can play a huge role in helping to achieve larger audiences for Canadian features.’

Mayson is quick to add that in addition to producers’ growing understanding of the importance of marketing and promotion, there’s a sense that everybody wants to see English-Canadian films break through like French-Canadian films have.

Jacob stresses that Cineplex will make screens available, but the onus falls to the distributors to make sure that they are there marketing the films properly. As a negative example, he ironically cites Quebec hit C.R.A.Z.Y. from TVA Films.

‘A great movie,’ he says. ‘Did fantastic in the province of Quebec, was doing well in Ontario, so what do our friends do? They put it on DVD while it’s still in the theater. Here’s a situation where there was a good opportunity and they just blew it.’

He adds, ‘There’s enough screens in the country for everybody to get a fair shake. But we can’t lose money. We’re in a profit-making business.’

Loewy, today CEO of AA’s Motion Picture Distribution LP, agrees.

‘It’s making movies that fit the taste of the public,’ says Loewy, ‘which is something that Canadian filmmakers [other than David Cronenberg] are not doing. We don’t want to see stories of pain and bullshit that affect nobody. This is a complete waste of time. And this is what most Canadian films are.’

Looking forward, challenging hurdles are looming: piracy, a shrinking DVD release window and competing alternatives such as iPod, TiVo and VOD. But his colleagues express their belief in Jacob.

‘I’m very confident in Ellis’ ability to face the future,’ says Loewy. ‘He’s invented and created a completely new circuit [Galaxy] in towns that never had cinemas and they’re doing extremely well. So I’m sure whatever challenges will come, he’ll know what to do.’

Lantos adds, however, that ‘the day when movies are available in all media simultaneously ­- which takes away the edge that theaters enjoy – is not far off. At that point, in order for exhibition to even survive, they’ll have to be really well run.’

Jacob acknowledges these concerns, but says he’s going to continue to do what’s got him to the dance – entertain the people. And he’ll hope that tentpole pictures such as Spider-Man and Harry Potter keep bringing them in. ‘I always tell people ‘we set the table, but we don’t serve the steak,” he says.

Given the year he’s had, and Cineplex’s confirmed plans to build at least eight new theaters over the next year, leads one to wonder if Jacob harbors any plans for Cineplex to expand into the distribution and production arenas, as did Alliance Atlantis or the Cineplex of the ’80s.

Jacob laughs, and then says mischievously, ‘Haven’t I done enough?’