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Cineplex hikes ticket prices in pursuit of record profits, blames its low-waged workers

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Image: Sally Field in Norma Rae (1979)

CBC reported that Cineplex raised its ticket prices on Oct. 1. The hike on admission is between $0.22 and $0.51.

The public broadcaster mindlessly repeated the corporation's talking points: nearly 90 per cent of their employees make minimum wage. They quoted one worker in the short story, Sarah Van Lange, who is Cineplex's director of communications and who near certainly is among the company's wealthiest 10 per cent of workers.

They also inserted a paragraph about minimum wage increases in Ontario and Alberta, leading readers believe that the fee increase was caused by the minimum wage.

Global News ran a similar story, but included an internal memo that had been posted to Reddit. The memo shows that the minimum wage talking points were the corporation's. Staff were instructed to reference higher minimum wages if customers complained about the increased fees.

Investigative journalist Leslie Young included other information that shows that Van Lange's talking points are dubious at best and at worst, are lies.

Last year, Cineplex's revenues were record-breaking. They reached $1.4 billion.

Cineplex management's discussion and analysis document for 2016 Q2 show that their revenues decreased by 22 per cent, compared to the previous year's revenues in Q2 alone. But, they don't blame this decrease on wages: "This decrease was due to weaker film product resulting in lower theatre attendance, as the current period faced a difficult comparator, with three of the top five films in the prior period ranking in the top seven all-time in worldwide box office revenues."

If you change the range of the profits considered, from January 1 to June 30, 2016, profits increased by 12.8 per cent, compared to the year previous. The documents do reference higher operating costs, but not low-waged employees. Instead, the costs are related to "emerging businesses as Cineplex continues to execute its diversification strategy."

Salaries and wages comprise a chunk of Cineplex's operating costs, but leases, property and licensing fees paid to film distributors are also significant costs. For example, salaries and wages are considered "other operating costs," a figure that includes many other expenses and reached $232 million in 2016 alone. To put that into perspective, theatre-occupancy expenses were $104 million, film costs were $198 million, of a total operations cost of about $670 million. And, box office and food service revenues combined were $562 million.

Theatre payroll increased by 5.7 per cent in 2016 when compared to the first half of 2015, to be $71 million. During Q2 though, payroll costs decreased by 4.6 per cent.

It's worth noting too, that Cineplex's best quarter tends to be Q4.

Among the standard risks identified in their statements are the talking points in the CBC article:

"Cineplex employs approximately 13,000 people, of whom approximately 89 per cent are hourly workers whose compensation is based on the prevailing provincial minimum wages with incremental adjustments as required to match market conditions. Any increase in these minimum wages will increase employee related costs. Approximately seven per cent of Cineplex’' employees are represented by unions, located primarily in the province of Quebec. Because of the small percentage of employees represented by unions, the impact of labour disruption nationally is low."

This is a great forecast because it demonstrates that Cineplex's profits (or, in the case of 2015 record profits) depend on the corporations paying their employees so little. It also demonstrates why corporations like Cineplex are averse to unions: it's harder to oppress workers with a collective agreement in hand.

Ontario's October increase of $0.15 was set into motion two years ago. It's political that Cineplex has decided to coincide their ticket increase with the provincial minimum wage hike.

Alberta's minimum wage was increased to $12.20 per hour, an increase of one dollar. Just 17 of 162 theatres owned by Cineplex are in Alberta.

There are 20 Cineplex theatres in Quebec, many are unionized with IATSE.

The corporation employs 11,570 people at minimum wage and has so-far in 2016 made a revenue of $717 million. If they're on track to beat 2015's record profits, will Ontario's 15 cent raise, or Alberta's one dollar wage break the bank?

If each of those workers worked full time (highly unlikely) and they all worked 52 weeks a year, and every worker received Ontario’s minimum wage increase of $0.15, it would total $3.1 million. Even if they all received Alberta's one-dollar minimum wage increase, they'd only have to pay $21 million more -- a tiny amount compared to their overall profits.

According to Cineplex's documents, the average customer pays $9.23 per visit. Of Cineplex's $1.4 billion in revenues, $711 million came at the box office. With their "modest" increase in ticket prices, and the sales trend of 2016, they'll probably have no problem posting another year of record profits.

The Fight for $15 campaign's most visible action yet happened to coincide with Alberta and Ontario's minimum wage increases. Thanks to a promise made by the Alberta NDP, the campaign is winnable.

If paying your workers a little better means your record billions drop by a few million, you're probably going to throw a tantrum and blame minimum wage increases on your increased ticket prices.

Because that's how greed works.

No one should make the current minimum wage. Minimum wage is a poverty wage. Ellis Jacob knows this. He makes $1,000,000 as Cineplex's CEO, plus additional compensation that brings his most recent total to about $5.3 million. Annually.

The Fight for $15 is winning and Cineplex is showing what kinds of tactics corporations will employ to try and discredit, obscure and defeat the campaign. But, in the fight for fair compensation and a way out of poverty, I think the only reasonable response to Cineplex is: Bring it.

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Image: Sally Field in Norma Rae (1979)

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