The last two years have been a big nightmare for filmmakers – unless you’re Mitch Roberts. While most cinemas remained closed, the 27-year-old businessman leaned in. Its vision is to make ordinary movie watching an unforgettable experience with bowling, arcades, laser weapons, great food and alcohol..
When the Governor of Texas allowed movie theaters to reopen on May 1, 2020, many of them didn’t take advantage of it at all. And it wasn’t that she was afraid of spreading the disease. The allowed capacity of only 25% of viewers, combined with the lack of new theatrical hits, simply didn’t make economic sense. Only Mitch Roberts disagreed.
By the time he was only twenty-five, he had already built Evo Entertainment in Austin, Texas, which included 57 screens, 38 bowling alleys, full restaurant services, two hundred different arcade games – as well than a heavy debt of $42 million. . He had to close six weeks earlier, remembering: “My first reaction was fear. But the second thing that came to mind was that I had to prepare for the reopening. »
To seduce people, he starts by showing classics like Pomade or Roštáci. It again offered gambling venues a fortune to bettors willing to play on screens with a diagonal of more than 160 centimeters. And he improvised. He turned the outdoors into a drive-in theater, turned nine acres of land into a paintball field, and packed gallons of margaritas and “nighttime snacks” for those who wanted to keep an eye on the house, which they could either pick up or have delivered.
While the competition remained closed, he was excited as he hosted a drive-in summer movie fest and whipped up pumpkin decorations and special Halloween cocktails, with or without alcohol. “Most of the others took the ‘we’re preparing for hard times’ approach. “I reminded people there was somewhere they could go,” he explains.
Despite all this, Evo saw a 60% drop in sales to just $20 million in 2020. Roberts only stayed in the game thanks to the leniency of the bank and then thanks to $21 million from a special federal government fund designed specifically for entrepreneurs in its sector. “An absolute miracle,” he says today.
But since Texas eased its anti-pandemic measures, its business has grown much faster than its competitors. In 2021, it was only fifteen percent lower than the ancestor year 2019 data, and in the second quarter it returned to positive numbers. Roberts owns 60% of Evo, with the rest owned by his two sisters.
As the pandemic began to wane, several companies in the industry announced they were permanently shutting down operations, others – like Alamo Drafthouse, which pioneered the sale of booze to moviegoers a quarter ago century – again declared bankruptcy. Instead, Roberts started the expansion and turned four neglected, deserted locations in Texas into a total of seven movie theaters where you can eat well and play mini golf or lasergame.
He needed $30 million for renovations and expansion plans, but he didn’t want his bank debts to increase (they were over $40 million), so he approached Bryan Sheffield, a 44-year-old man with hundreds of millions of dollars. in assets. “At first I thought he was crazy,” said Sheffield, a third-generation Texas oil company.
But after months of talking, he realized that such a “crowd business” concept could not only beat covid, but also play games on cheap and small screens. “We live in an experiential economy. People want experiences and want to have as many as possible at once,” says Roberts, a member of this year’s Forbes 30 under 30 selection. The result was an agreement in which the family Sheffield has pledged $125 million – not just to renovate additional investment.
And it’s probably no coincidence that they sat down together. Both Sheffield and Roberts started a family business in their own way. Sheffield founded Parsley Energy in 2008, which was based on his grandfather’s oil wells – and last year was bought for $4.5billion by rival Pioneer Natural Resources (owned by the father of Sheffield).
Roberts, in turn, is the fourth generation of entertainment entrepreneurs. Incidentally, his maternal grandfather, Lee Roy Mitchman, is still the head of the Cinemark company he founded when he was 85 – his 9% stake in a network of 524 theaters with nearly of 6,000 screens is now estimated at $150 million. .
As a child, Roberts would sweep up popcorn at his parents’ movie theater and fill jars with pickled vegetables. This had two consequences: he hated pickled vegetables and decided to eat differently. At the age of thirteen, he received a Big Buck Hunter Pro arcade shooter from Lee Roy’s grandfather and, with his consent, transferred it to his parents’ cinema. They agreed to split their earnings in half so little Mitch could buy more arcade games with the money he earned.
It wasn’t even enough for him at seventeen, and when he and his grandfather went fishing, he asked for financial help. Lee Roy refused, but agreed to accompany his grandson in the development of his business plan. These councils and these family relations opened the door to him. He failed at the Big Eight when Capital One agreed to loan a teenager $15 million to buy four acres in Kyle, Texas. Here, south of his hometown of Austin, he began building his first entertainment complex.
With such capital, he decided to abandon his college studies and created a site covering an area of more than 6,500 square meters. Eleven stars, fourteen bowling alleys, numerous arcade games – and also restaurants serving not only classics in the form of burgers and pizzas, but also teriyaki salmon. As he recalls, he spent the money “every last penny”. Still, he replaced the conventional seats with comfortable recliners with space to serve food, when just one cost him six hundred dollars.
It was not an unreasonable luxury. As regular movie theaters continued to sell popcorn and cola, he bet on items with much higher potential. Gross margin for beer, margarita, bowling or gaming can be as high as 90%. To make up for his lack of experience, he hires senior restaurant and movie theater executives. As he admits, there was a grandfather’s rebuke: “If you feel like the smartest guy in the room, this is the wrong room.”
He also showed a sense of timing. Blockbuster movies like Jurassic World, Star Wars: The Last Jedi, or Black Panther combined brought in $2019 billion to the U.S. economy in 2015. So Roberts didn’t compromise on pacing. He borrowed an additional $25 million from Capital One for a project in Schertz, south of San Antonio.
Avengers: Endgame became the second-biggest movie of all time, and Evo saw its highest sales of the weekend. Result: in 2019, it collected $50 million from its 2.5 million customers, an average of $20 per inhabitant. At the most successful branches, he was then earning more than $25 per customer with an operating profit of more than twenty percent, which exceeded the industry average.
But the covid hit. Entrepreneurs like him have plummeted to $2.1 billion in total revenue in 2020 from $4.5 billion last year. But in December, Roberts saw things improve when Evo sold 62,000 tickets for the opening weekend of Spider-Man: Homeless, surpassing the Avengers’ previous record. Despite the emerging wave of the omikron variant, there were no measures in Texas, there was no need to control vaccinations, measure temperature, or limit room capacity.
The first business between the two families was born on Christmas Day: the Sheffields are estimated to have paid $70 million for the Showbiz channel, launched in 2015 by Roberts’ uncle. “We love boomburbs,” Robert uses the American term for densely populated areas that are suburbs but not part of major metropolises.
“I would like to build a few new high schools.” Originally, they intended to limit themselves to Texas, Colorado and Florida, where anti-drug measures were no longer discussed, but are now thinking of the whole of the United States. . “No one is setting up movie theaters or music venues right now, but those things aren’t going away. When the lockdowns come, there’s going to be a lot of interest.”
Roberts’ empire currently has sixteen different locations, 148 canvases and 108 bowling alleys, and is expected to generate revenues of around $125 million this year. And he’s still planning how to make the most of the post-pandemic period. “We’re trying an experiment,” he says of the two-seater for passionate movie-going couples. Such a seat will provide them, among other things, with a distance from other visitors. Which can be handy not only to protect against covid, but also for other reasons.