Cineplex Galaxy’s second-quarter report delivered bad news upon worse: amidst a nosedive in profits, the exhibitor’s acqisition of Famous Players left 35% of its administrative staff out of a job.

The layoffs were a result of combining the head and regional offices of both Cineplex Galaxy and Famous Players, creating duplicate jobs.

But Pat Marshall, VP of communications, would not put a number on how many people were let go nor reveal whether more layoffs are planned. The integration of operations will be completed by year’s end.

Profits dropped to $242,000, down from 2004’s Q2 intake of $8.8 million. Cineplex Galaxy CEO Ellis Jacob told analysts in a conference call that the losses were ‘more indicative of poor scripts than anything else.’ He primarily blamed bad timing and ‘unappealing films’ for the near 97% plunge.

The theater giant is the latest company to blame Hollywood’s poor product for their own profit troubles. Rogers blamed ‘a combination of aggressive competition and lack of hit movie titles’ for its plunge in revenue, down 55% to $2.7 million this second quarter, while Blockbuster’s CEO John Antioco held weak DVD sales and a shortage of highly anticipated new releases responsible for his company’s $57.2-million loss.

At press time, it was reported that Cineplex had sold 27 of its theaters in Ontario and Western Canada to Stellarton, NS-based Empire Theatres for $83 million.

Cineplex was obliged to sell 35 of its theaters in compliance with the Canadian Commissioner of Competition. Earlier this month, RioCan Real Estate Investment Trust bought up the first four in that batch – the Colossus Vaughan, Coliseum Ottawa, Cineplex Odeon North Edmonton Cinemas and Cineplex Odeon Beauport Cinemas. RioCan also agreed to a 20-year lease that will let Cineplex Galaxy continue to operate the theaters.

Despite shakeups in administrative, Marshall says there are no plans to dump the Famous Players magazine Famous, and it will operate as usual, as will Tribute magazine, which will remain in Cineplex theaters. Jacob also says Cineplex will continue basing ticket prices on theater location as opposed to adopting Famous Players’ flat-rate ticket costs.

www.cineplex.com