Making a Difference: John Santikos secures legacy for 105-year-old Texas circuit

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“John Santikos had a vision for how he wanted to be remembered,” says David Holmes, president and chief executive officer of Santikos Enterprises (formerly Santikos Theatres). First and foremost, Holmes gives all credit to the legendary entrepreneur who gave so much more than his family name and dedication to both his business and the community that it serves. Founded back in 1911 by his father, Louis Santikos, with the purchase of the Rex Theatre in Waco, Texas, Santikos Entertainment operates 11 movie and entertainment venues in San Antonio and the Houston, Texas area.

After incorporating theatres, real estate and land holdings into the John L. Santikos Charitable Foundation upon his passing on Dec. 30, 2014, at age 87, Santikos Enterprises has become the first and only theatre chain to operate as a social enterprise.“We run the business just like it has always been run,” Holmes attests. “We take in our revenues just like we always have. We pay our expenses. We put aside money for our future, but everything else goes back to our community in the form of grants, charitable support, scholarships, donations… And it is a very sizeable dollar amount,” he assures.

“We want the public to understand that we all have a stake in creating a vibrant and prosperous community,” Holmes noted for the official announcement to their moviegoers in March. “You can see a movie anywhere, but every time you see a movie at Santikos you become a vital part of our charitable legacy, because the money you spend on tickets, drinks or snacks goes back to organizations that improve our society.”

Speaking to Film Journal International as part of an exclusive multi-part report, Holmes elaborates upon the ways in which the legendary theatre entrepreneur set the course. “Mr. Santikos wanted the Santikos legacy that he had helped shape for decades to continue. He wanted to maintain the quality of the theatres. He wanted to be a big employer in San Antonio, which we definitely are, and he wanted to remain a great corporate citizen.” John Santikos wanted to “really find the ways to give back to the community that had allowed him to build this incredible theatre circuit.”

To accomplish this, John Santikos did as he always did in running his business—he deployed great care and much consideration. “He planned for at least five years,” Holmes confirms. “He thought it through to an incredible level of detail, and upon his passing he had left extremely explicit instructions about the transfer, about how he wanted the money to be distributed within our community. It has taken us a long time to execute his plan because it was a very sizeable estate, but his plans were actually extraordinarily well thought through.”

He thought equally well about where the funds generated by the social enterprise were going, Holmes continues. “Mr. Santikos designated what he called areas of interest and those include broad categories, such as people in need and senior citizens, people with special needs, and victims of child abuse. It covers disaster relief. He also was an advocate of youth and education, and so there are very robust scholarship plans... Mr. Santikos wanted money to go to public libraries, to parks and to museums. He very much liked arts and culture…the performing arts and the visual arts.” Last but not least, healthcare and medical research are covered as well.

In order to support such a broad range of charitable endeavors, Holmes says, the John L. Santikos Charitable Fund is working within the San Antonio Area Foundation, “a very mature 51-year-old organization that is designed to administer programs exactly like this one.” Valued in excess of $605 million, the Santikos Fund marks the largest single gift ever to the Area Foundation. “Mr. Santikos very much loved that model…a center of excellence within San Antonio that could help make sure that the funds are deployed most effectively.” Holmes adds, “He really liked the fact that this was a dynamic process and that as the needs of the community change, so too could the way the funds get deployed.” With that, Holmes opines, the legacy that John Santikos set up is “designed to last the next 100 years. It’s the gift that we’ll keep on giving.”

The gift does not end in and with San Antonio. Our industry charities, such as Will Rogers Motion Picture Pioneers and Variety The Children’s Charity stand to benefit as well. “As a corporate citizen and a member of the industry, we will support those types of organizations directly,” Holmes declares. “They are wonderful organizations and we want to play a genuine leadership role in them. So they will be supported as part of Santikos Enterprises…and we believe that could be another big part of our role as a corporate citizen.”

Participating in our industry and trade associations remains a big priority as well. “Our primary membership is associated with NATO. We have long had a relationship with John Fithian.” What Holmes is hoping to accomplish more and more is “to engage our board of directors to go with us to these industry events,” including the upcoming NATO General Membership and Board Meetings, and the NATO Fall Summit in Marina Del Ray, Calif. While he already has his chairman of the Santikos board attending, “the coordination of so many calendars represents a bit of a challenge, but we are working that through right now.”

Speaking of that same Santikos board, Holmes says, he is the only member who actually works for the enterprise. As with the charitable gift, Santikos took great care in the board-selection process. “As a part of his trust agreement, he made a list of individuals with whom he had worked during his lifetime… They are all very successful individuals within the San Antonio community.” In line with his instructions, the trustee picked a certain number of candidates from that list. The Area Foundation, “which is technically now the owner of the circuit,” Holmes reminds us, followed by selecting an equal number of directors plus one. In addition to tax reasons, this “also made sure that Mr. Santikos’ vision and his long-term wishes were honored in the structure at all times.” So, Holmes finds, “It was a fairly clever way to make sure that there was great business continuity.”

David Holmes had been a part of that continuity at Santikos Theatres before, albeit briefly. Going through chemotherapy treatments in 2011, John Santikos was not doing well, Holmes recalls. “He realized that, given the size of this company and the size of the enterprise, he would really need to bring in a CEO…someone who could take over the reins and run things for him, with him remaining in the shadows.” They were able to come to terms and Santikos “did exactly what he should have done: He stepped away and took very, very good care of himself.”

After a “miraculous recovery,” and really beginning to feel good again, Holmes recalls, John Santikos “wanted to get back in the business again. And, in all honesty, I did not have an interest in being here unless it was in the CEO role. We had an amicable parting of the ways.”

Holmes recalls that two weeks after coming back to the San Antonio Area Foundation “to manage their investment portfolio…John Santikos passed away and left everything to the Area Foundation. As I was the former CEO and I knew Mr. Santikos’ wishes, I was tagged to come out and help with the transition. I have really enjoyed getting back into the game out here.”

As someone with a background in financing and real estate, mostly, what does he enjoy about the movie exhibition game? “What I loved about his organization from the very beginning was that Mr. Santikos always invested in people, particularly people at a young age. He brought them in, took them under his wing and nurtured them, taught them the business and grew his resources internally. That has always been a hallmark of Mr. Santikos’ business model. And as a direct result, I was comfortable coming back here without having a deep level of detailed experience in exhibition. We have a great bench of folks who have grown up in the industry and understand it from working directly under Mr. Santikos, whom I think we all consider to be an absolute pillar in this industry. What I need in terms of theatre level acumen, this team brings to the table.”

Putting his entrepreneurial skill set on the table, Holmes notes, “We own all of our theatres as opposed to leasing them. In addition to the theatre side of the business, Mr. Santikos left the Area Foundation a large and robust real estate company with about a million square feet of retail Class-A investment properties. We have very large holdings in land and we have future theatre sites for development.” (Those future theatres, the current portfolio and changes to it will be discussed in an upcoming report.) While “the real estate side of the company is sizeable,” Holmes realizes “it does not get talked about as much. On that side of our house I am very comfortable. And on the other side of theatre operations, I have great people that help me.”

In rebranding the storied name of “Santikos Theatres” into “Santikos Entertainment,” including the tagline of “Be a Part of the Legacy,” Holmes and the team had good help too. The way in which Santikos structured his estate, “there was no provision against renaming the circuit,” Holmes assures. “We certainly had the latitude to do something else. Our market research showed a tremendous brand value associated with Santikos. Through the branding exercise, which included surveys, focus groups and more, we learned that over the last 40 or 50 years of operating in San Antonio, the Santikos name has come to be recognized as marking an innovative location.” After all, he finds, “Mr. Santikos was always the first to build in an emerging area of the city. He was always the first person to come to the table with new technology. He always hired the friendliest staff and had the cleanest theatres.” And, he assures, “these are not things that we were telling ourselves. This is what market research and focus groups have told us.” Being perfectly honest, he admits, “we never thought about changing the name, but what we realized as part of the process is just how powerful the Santikos brand is.”

Taking that power and “really leveraging it” involved moving towards the broader notion of Santikos Entertainment. Again, Holmes gives credit to John Santikos himself and his spirit of innovation. “More and more, his venues—certainly the last three that we built—really are much more than a theatre.” Offering manifold dining and snack options, plus gelato and full-service bars, bowling lanes and game rooms, Santikos venues come with all the technological bells and whistles too, from Barco laser projection to Dolby Atmos immersive sound. As a company, “you always want to point out how you are different. And I think the way that Santikos is truly different is in terms of…operating as a social enterprise. We are not aware of any other exhibition chain [that does this.]” Holmes says this “gives us a very different mission than I think anyone else has that serves this market. So our goal is to take that and really use the platform that we have been given to benefit our community.” While San Antonio is also home to some large Fortune 500 companies and “we are all blessed by the wonderful things that they do for the community,” he notes, “Santikos is the only company that exists solely for that very purpose.”

David Holmes closes our first conversation by stating, “It is also a very big responsibility. Mr. Santikos’ legacy created the largest charitable gift in San Antonio and one of the largest gifts in the history of Texas. And it was the largest gift in 2015 in the United States. So, yes, on its scale that is pretty unprecedented.” Furthermore, he feels emboldened by John Santikos’ wishes to go beyond a one-time donation to a charitable organization. “This is not something whereby…over time that money gets spent and at some point it basically runs out. His vision was a perpetual gift and that we would always be there to serve our community… We have been gifted with stewardship of an incredible legacy that, if properly managed, will be here 100 years from now. It makes you jump out of bed in the morning and it makes you excited to come to work, but it also makes you stay awake at night thinking, ‘Man, we’ve got to be careful here. We got to do this right.’”

In an upcoming issue, Film Journal International will look at Santikos’ new Casa Blanca theatre and other venues.