"Valley of Death" w/Paul Glantz
Digital cinema pioneer Paul Glantz tells Wayne State audience about his bumpy road to cinematic success
By Lucy Ament Hern
Paul Glantz (SBA, ’80), founder and chairman of Emagine Entertainment Inc., found himself in the “valley of death” in June of 1997, when the Detroit Red Wings won the Stanley Cup for the first time in 42 years. He had just spent millions of investor dollars building Cinema Hollywood, his first state-of-the-art cinema complex with stadium seating and upscale amenities, and it was completely empty. His would-be patrons didn’t want movies – they wanted hockey.
Speaking on Sept. 19 to a Wayne State audience about the stumbling blocks that littered his impressive entrepreneurial path, Glantz said he resolved in the midst of his Stanley Cup crisis to do what every business owner must do to survive: pivot. Reframing the Birch Run complex as an entertainment venue, he welcomed the following hockey season by getting digital projectors, selling beer, and giving Wings fans a viewing experience they couldn’t get anywhere else. Glantz’ willingness to adapt his business plan to the market helped his venture to expand into a lucrative chain, one that screened pay-per-view wrestling events, operas, plays, and other nontraditional fare, and became the first in the nation to convert all of its screens to high-definition digital.
Glantz, who raised more than $45 million in capital to establish his Emagine theater chain, was the featured speaker at “Valley of Death: Surviving the Financial Rut,” an event sponsored by Wayne State’s Blackstone LaunchPad business laboratory, Wayne Law’s Program for Entrepreneurship and Business Law, WSU Front Door, and the WSU student venture M-Squared Financial. The “valley of death” – or “field of nightmares,” as Glantz dubbed those tenuous Cinema Hollywood days – refers to vulnerable stage of a new business venture that occurs after the owners have made their initial financial investment but before they have generated enough sales to get out of the red.
Traversing the valley of death takes forethought and sound judgment, said Glantz, a distinguished Wayne State alumnus who is a member of the WSU School of Business Administration’s Board of Visitors, as well as a member of the WSU Foundation Board of Directors and chairman of its investment committee. While Cinema Hollywood had its share of luck – the release of “Titanic” in December of 1997, Glantz said, was a “precipice event in the history of the business” that drove critical first-time customers his way – it also resisted easy cost-saving measures such as housekeeping cutbacks that would have caused customers to lose respect for the chain and launched it into what Glantz calls the “death spiral.” And while Glantz believes in offering investors a generous return on investment to encourage repeat business, he urges entrepreneurs to remain majority owners in their ventures to prevent “renegade investors” from forcing decisions that are not in the enterprise’s best interest. Current investors own 49% of Emagine Entertainment and earn 12% of the return.
Glantz’ generosity towards investors reflects his personal and professional philosophy of putting people first. His mantra – “we are always auditioning, we just don’t know what we’re auditioning for” – is an admonishment to young entrepreneurs to remember that influential eyes are always on them. To illustrate, Glantz noted that his hard work and professionalism as a public account early in his career so impressed members of upper management that they later became his initial investors. Glantz finds his own talent the same way. Asked how he makes hiring decisions, he replied: “Hire for attitude, train for skills.”
Glantz, who while growing his 76-screen theater chain maintains a full-time position as CEO of Proctor Financial Inc., warned that even a tried-and-true business model can’t safeguard a growing franchise from unforeseen circumstances. After Emagine’s early success, Glantz opened a multi-million-dollar complex in Novi, only to discover that a competitor had persuaded major movie studios not to license films to Glantz based on decades’ old Hollywood protocol.
“We built a superstore and it was stocked like a convenience store,” Glantz said.
After a protracted battle during which Glantz hired lobbyists and persuaded Michigan lawmakers to take up his cause, the movie studios ultimately relented. But the experience taught him that the valley of death can be encountered – and overcome – many times in a career.