Like Father, Like Son: Steve and Greg Marcus express mutual admiration

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“The older I get, the smarter he gets,” Steve Marcus says of his late father Ben, founder of Marcus Theatres and its diversified parent company, The Marcus Corporation. Steve, now chairman of the board of The Marcus Corporation, and his son Greg, the current president and CEO, met with Film Journal International at CinemaCon in April to reminisce about their father and grandfather and to discuss their own philosophies about running a successful 80-year-old organization.

Steve Marcus praises his dad’s “incredible knack for finding the right people to run the various businesses that he got himself into, including the restaurant business, the movie business and the hotel business. He couldn’t do it all himself, he recognized that. He recognized that from the time he had a paper route as a kid: He could sign up new subscribers and go around and deliver the papers every day, or he could sign up twice as many subscribers if he got some other kids to help him deliver the papers. He understood the importance of having good management to run the businesses, most of whom knew more about them than he did at the time. Most of them didn’t know more about the movie theatre business, because that’s where he started. But at some point, he needed people to help with the buying and booking and the operations side…

I think he demanded that they all learn from him too, because he had special skills—financing, identifying good people, things that are important to running any business.

“He could also be very tough,” Ben’s son concedes. “He was very demanding, and he could bawl you out pretty good. But in the next minute, he’d have his arm around your shoulder and you were friends again and you felt good about the conversation you just had. He could be tough, but he wasn’t threatening in his toughness.”

Greg Marcus has a different perspective on the company founder. “He was Papa, he wasn’t the terrifying guy that everyone else was scared of. He was probably around 50 when I was born, so by the time I get to start forming memories, he’s in his mid-60s, going on 70, still a vital guy, and I’m not even working in the business at this point. I have memories of him as this larger-than-life figure. And I remember how important America was to him. When they were doing a big fundraiser around rehabbing the Statue of Liberty around 1976, it was so meaningful to him that he took a big integral role in that national campaign.

He won the Horatio Alger Award, which is the rags-to-riches story. It blows me away, as I’m walking around looking at my phone and calling and e-mailing and texting, that this guy started the company without a fax or a computer or a cellphone. He drove around in his car and he used his mind.”

Steve provides insight into why his father expanded his business beyond movie exhibition. “He was always very afraid of the competition to movie theatres from television. Television took a big toll on the movie theatre business. And that was how he got into the restaurant and motel and hotel business. He felt he needed to have diversity in his businesses. But over time I think he became more confident that the movie business was here to stay as long as you kept it current and stayed one step ahead of the sheriff, if you will.”

Ultimately, that diversification has been a boon to The Marcus Corporation.

“It helped in a number of ways,” Steve notes. “It helped smooth out some of the down times that movie theatres had. But since the advent of the multiplex, the movie theatre industry has found a way to remain pretty stable. Cash flows are fairly predictable. They go up and down from year to year as product has waxed and waned.”

“Week to week!” Greg interjects.

“That was the beauty of having these multiple businesses,” Steve continues. “The cash flow from the movie business financed the restaurants. The restaurant cash flows financed the construction of our hotels and motels. And the cash flows from the hotels and motels later on financed movie theatre construction.”

At the beginning, Steve Marcus didn’t particularly want to be part of the family business, he admits. “I wanted to be in the real estate business and I did that for a little while. And then I decided that the best opportunity I would find was to go into the [family] business. There was a need there—somebody else could have filled it, I suppose—but it seemed to me that given what I wanted to do with the rest of my life, having a good head start wouldn’t hurt. And shortly after I got there, we bought a hotel that was in bankruptcy [Milwaukee’s Pfister Hotel], and because I was a lawyer, my father told me to handle it. From there I got into the hotel business and I loved it. I wound up running the hotel division—the theatre division was well-populated, it didn’t need me to run it at the time. That was where I learned a lot about how to run a business.”

Greg Marcus, too, initially resisted joining the family enterprise. “After law school, I got into the USC film school. I could hear a gulp at the other end of the phone. But he’s really good at saying: I want you to make your own decisions. I didn’t go to film school, but I went to work in the industry and got it out of my system. I decided I didn’t want to spend my life in California and moved back to the Midwest. And eventually I said, ‘I’m ready to come back,’ and he said, ‘OK, we have a job for you.’ I came back and started working in the real estate side of the business.”

The Marcus board’s current father-and-son team is a mutual admiration society.

“I look at my dad and see a man who brought professional management to our business, hired smart people and let them do their job,” Greg says. “I try to do that. The idea of maintaining our balance sheet, the importance of a sound financial structure, the importance of your people—I hear that from my dad, he heard that from his dad. These things transcend generations. And the idea that all we’re doing is creating memories. My take on that is the importance of remembering how important those memories can be for people. Hotels are the easier example: It’s so easy to get caught up in the day-to-day, but this is that person’s only wedding. Or you’re serving your 19th popcorn of the last half an hour…but that may be somebody’s first date! The memories are really important.”

As for Steve’s view of Greg, “Greg is great to work with. I’m pretty sensitive to the nature of our relationship. Whatever he has in terms of position in the company, he’s earned. He got himself well-educated and he learned important things from other people before he came to work at our company. He’s very smart, smarter than I am, smarter than his grandfather. He doesn’t believe it, but it’s true.

It’s always been important to me that, now that he’s succeeded me, nobody in the company gets the idea that Greg is coming to me for decision-making all the time. They know there are certain things I participate in, but those are things that an executive chairman would be involved in in any case. I stay in touch with the business and I stay available if he needs to bounce something off of me. Everybody needs that from time to time. But I’m sure there are many things Greg bounces off other people but not me… I don’t think there’s any doubt in our company about who is in charge.”

Greg Marcus takes palpable joy in the continued presence of his dad at the Milwaukee headquarters. “We have this office setup where his office is along one wall and my office is down there and we share a conference room. So I can see him working in his office. That’s pretty cool. Not many people get the good fortune to work together [like that].”

After 80 years, Marcus Theatres is in a stronger position than ever, with ambitious expansion plans and initiatives to bring more lounger-style seating, more premium-large-format auditoriums and more upscale dining options to its locations. Says Greg Marcus, “We’ve always believed in staying current and making investments, yet not moving too fast. A lot of the things you’re seeing now we’ve been incubating for a long time. We’ve been doing in-theatre dining for eight years, since we opened the Majestic [in Brookfield, Wisconsin]. Now we’ve accelerated it, but it didn’t work when we first started doing it. It was not exactly a home run, it took us a little while to figure out how to do it. And the DreamLounger seating, we’ve been into that for a number of years, but we’ve accelerated it. We’ve been doing premium large format for years—we actually tore down the first one… Bringing a fresh set of eyes in with Rolando [Rodriguez, Marcus Theatres CEO] has energized the organization. And they’re mixing in new things like the $5 Tuesday program, which has meant a lot to help launch our loyalty program. We’d been working on our loyalty program for four or five years. We planted the vineyards a while ago and it takes a while for those vines to grow, and now the wine tastes pretty good.”

Steve Marcus emphasizes, “The critical thing is to give people a reason to come out of their homes, to give them something they can’t get at home. The one thing my father always said is: Every house has a kitchen, but people still go out to eat. Well, every home has a TV now, and a lot of them have very large screens and improved technology and improved product coming to them through streaming…”

“Through a fire hose!” Greg hastens to add.

Steve continues, “The movie theatre exhibition industry needs to stay one step ahead of that. We have to give people a reason to leave their homes and come out into a communal setting where people have a shared experience, which is something they can’t get at home. Most people don’t invest in a DreamLounger, or a half a dozen of them if they want to have friends over. It isn’t the same experience. Or the social experience of watching a movie with someone else—you can do that at home, but the tendency is not to.

“With the DreamLounger seating,” he notes, “we have a little bit of additional competitive edge there because we have the capital structure where we own most of our movie theatres and we can make the decision to go in and do it. We don’t have to go to a landlord to get permission, we don’t have to ask anybody. So we’re able to move very quickly. We weren’t the inventor of the lounger-type seating, but once we made the decision to go, we now have the highest percentage of lounger seating of any circuit in the country—30 percent.”

“Once you do it, you get it,” Greg advises about the DreamLounger experience. “To me it meant more than stadium seating. It’s such a great way to watch a movie.”

Steve Marcus is very enthusiastic about modern movie theatres and their sight and sound presentations. “There’s no comparison. It’s so much better today. It’s a fabulous experience. The sound is unbelievable, sometimes too much, but it is really good. The pictures are fabulous on the screen, and the screens are so much bigger in most cases. The seats are an enormous improvement, and the whole experience of dining and beverage service that’s available. The biggest problem we have is that because we were so slow to change, we lost a lot of customers who are now older. Getting them to come back to see the changes, we have to work hard to [make that happen].”

For both Steve and Greg Marcus, their responsibilities go way beyond providing a great experience inside the theatre. Says Steve, “From very early on, Ben Marcus, my father, always felt it was important to give back to the communities he was in. And as I grew up, I became involved in those things. And now Greg is very heavily involved not only in Milwaukee but in national things. He’s chaired the United Way of Greater Milwaukee and will be the next chair. He’s also on the Greater Milwaukee Foundation board of directors and will probably chair that some day. He’s involved in the Lodging Association and NATO. He’s doing things for the betterment of more than just our family or our businesses. He believes in working for the greater good.”

Greg returns the compliment: “I watched by example. He works hard. He did all the same things.”

As for the road ahead, Greg Marcus has the final word: “Our challenge is to keep that product innovative and current so that people do want to get up and get out… The idea is to do what we do well, keep applying the same principles that have gotten us here for 80 years, taking care of our people and paying attention to the business and the balance sheet. And if you do all those things right, it tends to work out. So if something seismic presents itself as an opportunity, we’re going to be able to take advantage of it. Just like we woke up and all of a sudden 30 percent of our theatres have recliners, that’s in a way seismic, but we keep plugging away.”