Overview
This page considers Rank, which over the past 70 years has morphed from film production to gambling via electronics retailing and holiday camps.
It covers -
- introduction
- history
- film production
- cinemas
- film services
- Rank Xerox
- Hard Rock and Mecca
- camps and food services
- studies
Introduction
In 2006 London-based Rank claimed to be "one of the UK's largest gaming businesses" and an "international gaming and leisure group" that comprised Mecca Bingo, Grosvenor Casinos and Blue Square, 11 bingo clubs in Spain, two casinos in Belgium and 126 Hard Rock Cafe venues.
History
Rank traces its origins to J Arthur Rank (1888-1972), scion of the wealthy flourmilling and baking Rank family. He had been inspired to enter the film industry by a mixture of religious fervour and commercial opportunism, initially by funding film production and then - in response to distribution difficulties - through ongoing vertical integration with acquisition of distribution, exhibition and film processing operations. Expansion during the 1930s and 1940s saw him acquire the Odeon cinema chain founded by Oscar Deutsch (1893-1941) and a range of UK studios - notably Alexander Korda's Denham Studios.
Ongoing crisis in the UK film industry during the mid to late 1940s saw Rank, like some of its peers, expand into camera and electronics manufacturing (eg through acquisition of the Bush radio company, manufacturing radios, televisions and gramophones). Tracing the same trajectory as competitor Granada, it expanded into electronic retailing and into broadcasting (with a 37.5% interest in Southern Television Corporation), bowling alleys, dance halls, motels, restaurants and a record label. It extended its film interests through purchase of Taylor Hobson (lenses and precision measuring instruments) and Cintel (image processing).
Few of those operations produced substantial profits; some indeed resulted in substantial losses while absorbing management time in an increasingly unwieldy organisation that appears to have relied more on charisma than systems and expertise. Rank staggered into the 1970s, dependent on revenue from its photocopier interests. The partnership with Xerox permitted illconceived diversification into hospitality (notably through acquisition of the Butlins holiday camps - the unwashed engaged in the indescribable?) - and abandonment of most film interests: first in production, then in exhibition and distribution.
The proceeds of sale of formerly core operations went to building up the gaming and leisure side of Rank, with acquisition of Mecca Leisure (which had extended from bingo halls into casinos and the Hard Rock Cafe chain) and associated sale of Rank's downmarket nightclubs, slotmachine service and other operations.
Film production
In 1936 Rank's General Cinema Finance Corporation (GCFC) acquired a controlling interest in Gainsborough Pictures, founded by Michael Balcon in 1924 and associated with the Gaumont-British Picture Corporation from 1927. Gaumont-British - UK production, distribution and exhibition interests - was controlled by Maurice Ostrer and his brother, tracing its origins to Leon Gaumont's operations in the UK at the turn of the century.
By 1945 Rank was the largest shareholder in US-based Universal Pictures, apparently aiming to leverage his interests by merging Universal with International to form United World Pictures. That would facilitate block bookings for US exhibition (including access by imported films from the UK) and result in substantial revenue for a dollar-starved UK. It would also extend his Eagle-Lion distribution arm, initially established by Korda. He had expanded into the US through acquisition of Universal's UK distributor in 1936, subsequently buying a stake in Universal itself.
Fusion of the two US studios resulted in Universal-International, headed by William Goetz, in 1946. Restrictions on sterling meant Rank was unable to achieve his aims and the studio was affected by losses, being acquired by Decca in 1951.
Cinemas
The Odeon Cinemas chain was founded in Birmingham by Oscar Deutsch (who on occasion waggishly indicated that the corporate name was an acronym for Oscar Deutsch Entertains Our Nation) in 1930. By 1933 the chain comprised 26 Odeons, with 250 by 1937 (including a flagship cinema in Leicester Square, London). Odeon competed with the Associated British Cinemas (ABC, later part of ABPC) and Gaumont-British Cinemas chains (which included operations founded by Leon Gaumont and by the Ostrer brothers).
It was acquired by Rank in 1941 and eventually merged with Gaumont-British Cinemas, acquired by Rank but initially managed separately. Rank expanded offshore, with Canadian subsidiary Odeon Theatres (Canada) Ltd comprising over 100 cinemas in Canada and an Odeon chain in the Republic of Ireland. The Irish operations were sold to Ward Anderson in 1982; the Canadian operations formed a base for Cineplex Odeon.
In 2000 Rank sold its Odeon Cinemas chain to Cinven for £280 million. At that time Odeon operated 75 cinemas in the UK and Jersey. The chain was ultimately purchased by Terra Firma Capital Partners in 2005.
Film services
In 2005 Rank sold its Deluxe Film unit (film processing and creative services) to MacAndrews & Forbes subsidiary DX III Holdings for US$750 million.
It is also in the process of selling its Deluxe Media Services (DMS) operations. As of 2005 DMS was an international manufacturer and distributor of DVDs and videotapes on behalf of content owners in the video, music, games and software industries, competing with Sony and Bertelsmann's Arvato. In 2006 Rank announced sale of the UK operations of DMS to Sony for £5.9 million.
Rank Screen Advertising was established in 1938, competing in particular with Pearl and Dean. In 1996, as Cinema Media, it was acquired by Carlton Communications and became Carlton Screen Advertising.
Rank Xerox
The group's existence through the 1970s and 1980s arguably reflected its stake in Rank Xerox.
Rank had fortuitiously entered an alliance with Haloid Corporation (later Xerox) in 1956, reflecting its electronics manufacturing and film processing & distribution interests. That alliance, ultimately embodied in a 48.8% stake in Rank Xerox, provided for manufacturing, distribution and servicing of photocopiers in much of the former British Empire, continental Europe and Asia. The joint venture's sales went from US$7 million in 1962 to US$276 million in 1969, at which time it was responsible for 80% of Rank's profits. By 1982 Rank Xerox contributed 93% percent of the group's overall profit.
Aggregate proceeds from unwinding of the partnership, with Xerox having full ownership of Rank Xerox from 1997 were £1.5 billion.
Hard Rock and Mecca Leisure
The Hard Rock Café chain dates from 1971, when the first cafe was opened in London by Isaac Tigrett and Peter Morton. Hard Rock was acquired by Mecca Leisure in 1988; Mecca was in turn acquired by Rank in 1990.
As of 2005 Hard Rock contributed about 30% of Rank group earnings and had expanded beyond its café origin into hotels, restaurants and casinos. It comprised 68 company-owned cafes, 53 franchises and six Hard Rock hotels and casinos in 40 countries. The chain offered an 'experience' centred on display of what it characterised as one of the world's largest collections of conterporary music memorabilia and what a critic sourly dismissed as "historic tat to disguise the price of your overpriced and overcooked burger".
In 1999 Rank sold its Nightscene (aka Rank Entertainment) operations to Northern Leisure Plc for £150 million. Rank Entertainment at that time operated 35 nightclubs, nine Jumpin' Jaks, six Hotshots and three ancillary leisure operations.
In 2003 it paid £65 million for Blue Square, a UK internet and telephone betting business founded in 1999.
In December 2006 Rank announced sale of Hard Rock to the Seminole Indian Tribe of Florida for US$965 million. A Seminole spokesperson with a nice line in rhetoric commented
Our ancestors sold Manhattan for trinkets. Today, with the acquisition of the Hard Rock Cafe, we're going to buy Manhattan back one hamburger at a time.
The Seminoles had already partnered with Hard Rock in hotel, gambling and entertainment complexes in Tampa and Hollywood (Florida). The deal includes 124 Hard Rock Cafes, four Hard Rock Hotels, two Hard Rock Casino Hotels, two Hard Rock Live! concert venues and stakes in three unbranded hotels, along with some 70,000 items of memorabilia. It does not include Hard Rock's Las Vegas casino, owned by Morgans Hotel Group, or Morgans' rights to Hard Rock intellectual property in Australia, Brazil, Israel, Venezuela, and many areas of the United States west of the Mississippi River.
Camps and food services
In 2000 Rank unloaded its UK Holidays Division for around £650 million to Bourne Leisure Group, supported by Candover and Legal & General Ventures. At that time the Division comprised Butlins (three "Family Entertainment Resorts"), Haven (57 UK caravan parks and 47 owned and franchised sites in Europe), Warner (13 UK hotels and resorts) and Oasis (one UK holiday village).
The first of Butlins holiday camps was established in 1936 by Sir William Heygate Butlin (1899-1980), with the chain being acquired by Rank in 1972 for £43 million.
During the same year it sold Tom Cobleigh (87 managed pubs and 23 tenancies within the UK) to Electra Partners Europe for £90 million and sold its 50% interest in Universal Studios Escape (Florida) to Blackstone Capital Partners for US$275m. Universal Studios Escape was jointly owned with Universal Studios, following Rank's 1988 investment of £115 million in a partnership with MCA. It consisted of the Universal Studios Florida and Islands of Adventure theme parks and Universal Studios CityWalk dining and entertainment centre. (Rank retained interests in three Florida hotels and a stake in Universal Studios Japan).
In 2003 it sold Rank Leisure Machine Services and Rank Seasonal Amusements to Gamestec Leisure for £30m. The companies, acquired in 1990, were claimed to be leading distributors of coin-operated leisure equipment, offering sales, rental and maintenance services in the UK.
Studies
For Rank see Roy Armes' A Critical History of the British Cinema (New York: Oxford Uni Press 1978) and Geoffrey Macnab's J Arthur Rank & the British Film Industry (London: Routledge 1993), more persuasive than Alan Wood's Mr Rank: a study of J. Arthur Rank and British Films (London: Hodder & Stoughton 1952).
For the Odeon chain see Allan Eyles' Odeon Cinemas Vol 1 -
Oscar Deutsch entertains our nation (London: Cinema Theatre Association/BFI 2002) and Odeon Cinemas Vol 2 - From J. Arthur Rank to the multiplex (London: BFI 2005)
Xerox is profiled in Copies in Seconds (New York: Simon & Schuster 2004) by David Owen.