Windy City theater owner looks to expand.

Donzell Starks now controls 20% of movie screens in Chicago

His name might not be Magic, but Donzell Starks seems to have the city of Chicago under his spell. Starks is president and CEO of Inner City Entertainment (ICE), a six-year-old entertainment company that already owned 34 movie screens in the city of Chicago before going into partnership with St. Louis-based Civic Ventures, an African American majority-owned equity investment firm, and Patrick Burns, a former Cineplex Odeon vice president. Their newly formed company, Meridian Entertainment Group, is taking Chicago by storm. The company recently purchased eight existing Chicago-area Loews Cineplex theaters. Together with the theaters Starks already owns, Meridian now controls close to 20% of the movie screens in the nation's No. 3 movie market and projects it will generate approximately $15 million in revenue in 1999.

"Our goal has always been to be both owners and operators of multiplex theaters in major markets," says Starks. "The establishment of Meridian Theaters allows us to bring the best in big-screen entertainment into eight diverse neighborhoods."

The deal was actually made possible following the announcement last year that Sony and Loews Cineplex would merge. Last May, the U.S. Department of Justice mandated the divestiture of their overlapping markets in Chicago and New York, thus spelling an opportunity for a resourceful few. Cablevision gobbled up the New York theaters, but the DOJ barred it from picking up any theaters in Chicago.

Tipped off by an investor, Civic Ventures' Reuben O. Charles II and Byron E. Winton met Sony Loews executives in New York last September. Sony/Loews Movie Division President Travis Reid recommended they contact Starks, who already had a solid reputation in Chicago. Civic Ventures also tapped Burns, a former Cineplex Odeon vice president with operational experience. Soon after, a three-way partnership creating Meridian was born.

ICE and Civic Ventures are equal partners in Meridian while Burns holds a minority stake. Starks serves as president and CEO of Meridian.

This isn't the first time Civic Ventures has flexed its financial muscle, says Charles, the company's managing director. Using capital from mainstream corporate investors, Civic Ventures has invested its $20 million private equity fund in 14 urban minority companies.

"We thought that this was an opportunity to have a strong base from which we can build a national urban chain of theaters," explains Charles.

Meridian will continue ICE's legacy of state-of-the-art theaters showing a full range of commercial first-run films. Seeking general market appeal, neither decor nor programming are Afrocentric. The new theaters house a total of 30 screens and employ approximately 360 staffers. And locations run the demographic gamut from Anglo, Jewish and Latino to African American communities.

Hiring good staff and educating the community are the challenges Starks says he will face to keep operating and turn a profit. The 39-year-old former Wall Street investment banker has already been compared to another theater owner, Earvin "Magic" Johnson.

"What he's done in the past," says Starks of Johnson, "has allowed people to open their eyes that there may be an opportunity for African American principals to get involved in this particular industry. He's had an impact."

But others are quick to point out that Starks developed his landmark Cineplex Odeon relationship without a famous name.

"Donzell got into the business before Magic Johnson," says Winton. "Don did it from scratch, and now he's sort of a golden boy."

Beyond Chicago, Starks is negotiating theater contracts for Charlotte, North Carolina, Cleveland, Gary, Indiana, and Richmond, Virginia.