Recessions lead to opportunities
9 October 2013
Entrepreneurship Guest Lecture Series: Tim Richards
Tim Richards came to the first entrepreneurship guest lecture of a fresh academic year on a high: he had just concluded a deal to expand Vue Entertainment, the chain he’s been at the helm of as CEO for over a decade, into Poland, Latvia and Lithuania, and was still toasting successfully selling the company to a Canadian pension fund to the tune of a cool £1 billion.
Despite his bullish optimism, both on the future of cinemas as a centre of out-of-home entertainment and in the success of Vue as a company, Richards – a Canadian who started out studying economics and politics – was at pains to emphasise that such success takes hard graft, courage and above all confidence in the face of what others might see as overwhelming risk.
It was during a business meeting with two lawyers arguing over the finer points of obscure legislation which made Richards radically change direction, after nearly a decade working in the cut and thrust of corporate law in New York City and then London.
It was the recession of the early 1990s and following success at Freshfields, one of the largest corporate law firms in the City, Richards was ready for something new. That new direction was a chance application for an opening at Paramount-Universal, working on their joint worldwide cinema venture, which led him to spend five years jetting across the world expanding cinemas into new markets.
It was a dream job for a man who is a self-confessed movie-junkie, and from there a position with Warner in Los Angeles provided the kind of gilded lifestyle Richards acknowledges many would dream of: valet parking, mingling with A-listers at Hollywood parties and every amenity onsite at the studio. Yet he tired of the lifestyle and hankered after a new challenge. The idea for Vue Entertainment was born.
Vue emerged during the Dot Com recession of the early 2000s: Richards quit his job, sunk in his life savings and moved into his garage with a few close colleagues for a make-or-break shot at bringing a new cinema chain to market. The chain began when he successfully bought 36 theatres from Warner Village in 2003, which the Times greeted with the headline ‘unknown bit-player buys Warner Village’.
It didn’t stay that way for long – Richards has built the chain into the second largest in the world outside North America, with 147 theatres, 1400 screens and over 6000 employees. The company owns cinemas as far flung as Taiwan, Portugal and Latvia.
As for the future, Richards said that for over three quarters of the time, cinemas are empty, and he sees his role now to change that. “Our competition is out of home entertainment – nightclubs, bars and things like that,” he says. He is now looking to expand the chain into new areas away from movies, citing a live broadcast, organised along with Queen guitarist Brian May, of a concert as a nod to where things might be headed.
And his advice for would-be entrepreneurs? Know what your strong points are and what your weaknesses are, Richards advises. “Then you can use your strengths to lead the business and employ people to cover your weaknesses,” he added. Despite the ups and downs, Richards wouldn’t change a thing. The journey, he said, had been ‘phenomenal’.