Making His Cinemark: CinemaCon salutes Valmir Fernandes for achievements in Latin America

Features
Cinemas Features

This year’s CinemaCon “Global Achievement Award in Exhibition” Award will be given to Valmir Fernandes, president of Cinemark International, an appropriate honor for an executive who built Cinemark’s Brazilian operation from scratch and now brings that leading circuit’s standard of excellence to theatres throughout Latin America.

“An exemplary leader who has made a great impact on the film-exhibition industry and the moviegoing experience, Valmir leads with innovation and determination in making Cinemark synonymous with excellence throughout the motion picture theatre industry,” says Mitch Neuhauser, managing director of CinemaCon. "Now, as president of Cinemark International, Valmir continues to strive to expand and enhance the moviegoing experience from a global standpoint, and he could not be more deserving of this year's CinemaCon Global Achievement in Exhibition Award."

“Cinemark is incredibly proud of Valmir and his accomplishments over his 18 years with the company, from developing our operations as general manager of Brazil to leading our efforts as the most premier theatrical platform in Central and South America as president of international,” stated Tim Warner, CEO of Cinemark. “We have always recognized Valmir’s tremendous talent and success internally and are thrilled that he is being recognized by NATO and his peers.”

One of the most amazing aspects of Fernandes’ accomplishment is that he was a complete novice when he was enlisted to launch Cinemark Brazil in 1996. Previously, the chemical engineering and business administration graduate had served as a director in the chemical and petrochemical industry practice of Arthur D. Little and product marketing manager for Dow Chemical Company.

“I had zero experience,” Fernandes freely admits. “I had experience in management, but I didn’t know anything about the market. But the thing that was most challenging was the fact that the industry was dying in Brazil. I came in during the lowest year ever for the exhibition business in Brazil. A lot of my friends questioned that. I always joked, ‘Well, look, all the big theatres in Brazil are becoming churches. I’m either going to be successful in this business or I’m going to become a preacher. Either way, I’m going to make some money.’

“I had to learn every single piece of the business,” Fernandes recalls. “Every one of the general managers Cinemark hired to run the business outside the U.S. was brought to Dallas and trained here for almost six months to understand every piece of the business and the culture of the company. I think that’s what made us successful around the region, because we were able to mix the Cinemark culture with the local flavor. There has never been a ‘gringo’ down there—it was always us, meaning me and my colleagues, managing the business with the local flavor but also implementing the key elements of Cinemark culture within the region.”

Fernandes calls the circumstances of his hire “one of those coincidences in life. I was friends with a guy that was in the business, Michael Murphy, the head of UIP [United International Pictures] in Latin America. He was from Texas and a good friend of Cinemark. When Cinemark decided to break ground in Brazil, they were looking for somebody to lead that effort, and they talked to Mike. He said he knew some people from within the industry, and they said, ‘No, we don’t anyone from the local industry—we don’t believe what is being done is Brazil is exactly the way we think it should be done. The whole idea is to find somebody who is going to understand what we want to do in this market and how we want to modernize it.’ There was no multiplex at all at that time—it was all singles and twins.”

Asked what qualities enticed Cinemark to hire him, Fernandes replies, “Clearly, it was the fact that I always worked for American companies… So you speak the same language and have the same concepts and understanding of the principles of business. It makes a very strong first impression.”

Fernandes recalls, “Except for [Cinemark CEO] Lee Roy [Mitchell], the other guys in the company were pretty young. At first I thought I might be too young for the position—I was about 35—but when I got to know the guys I thought: They are even younger than me, so what am I worried about?

“I had to wait to be blessed by Tim [Warner], because Tim was just joining the company [as president of Cinemark International]. I was hired under the condition that Tim would accept. Tim was recently married and he went to Brazil on his honeymoon and said: ‘Fine, you are the guy.’ Then it was just the challenge of starting the business from scratch. I keep saying the first office of Cinemark was my living room, and I created the first equity of the company in Brazil—I had to start paying for everything because it took a few months to establish the company and be able to move funds down to Brazil. I still regret the fact that I never got my piece of the investment,” he confides. “I allowed them to pay me back instead of getting an equity participation.”

As for his motivation for this dramatic career change, “I was looking for a business where I could leave something behind. When you’re in management consulting, you jump from case to case, client to client… I thought with Cinemark it would be different, because we would build something from scratch.”

Proudly, he attests, “Cinemark transformed the whole industry. There were no multiplexes. For a country with only singles and twins, somebody opening a 12-plex [the inaugural theatre in São José dos Campos] was something completely different. We had to face all sorts of challenges, including local players trying to convince developers that we would never get film because they controlled the market. At that time there were no international groups participating in this business, it was all local, and we had to deal with that. We even had to make some mall developers get in touch with heads of distribution in L.A. to say, ‘No, no, Cinemark is going to get our product, you can trust these guys.’ A few years later, UCI jumped in, which was a division of National Amusements, then Hoyts. But at the very beginning, it was basically only Cinemark trying to develop the new way of exhibiting films.”

Ten years after founding Cinemark Brazil, Fernandes was promoted to president of Cinemark International, relocating to the home office in Dallas, Texas, and replacing Tim Warner, who became president of the domestic circuit. “It was not easy for me to break the umbilical cord,” Fernandes admits. “Once you build a company from scratch, you almost behave like it’s like your baby. So for me it was very good, having to come to Dallas—I was able to cut the umbilical cord and now I have my attention evenly shared with all the countries where we are present.

“I thought it would be more difficult [moving to the States]—in fact, I tell my friends that I came to Dallas thinking it would be a two-year assignment. I was recently remarried and I thought my wife would not adapt. Well, six months later my wife was telling everybody how much she loved Dallas, so my contingency plan went to the trash, I told her: You better like this city, because I’m not going anywhere. The family adapted extremely well, and I have a son who was born here. Traveling as much as I do, to have my wife very well established here and happy with living relatives is critical for me to be able to do good work. We’re very happy—I tell my father-in-law, ‘One of these days I may go back and work in Brazil. The bad news is that your daughter and your grandson will not come with me.’

“It has been fantastic,” Fernandes says of his new life in Dallas. “People here are very open and honest and transparent. It’s easy to adapt.”

During his tenure as president of Cinemark International, Fernandes has continued to elevate the moviegoing experience throughout the region. Among his achievements was the successful introduction to Latin America of Cinemark XD, Cinemark’s Premium Large Format concept offering giant screens, enhanced sound and extra-plush seating. His leadership has helped Cinemark become the highest-attended exhibitor in the world, ranking as the number-one or number-two circuit in its countries of operation.

“Our brand comes with a stamp of quality and innovation,” Fernandes proudly asserts. “A lot of the new things that people love to have [in cinemas] were launched in the market by Cinemark. They associate us with a high-quality movie experience. Not that there aren’t others—and I respect the competition and I think they do a great job—but because we ended up being the first ones, particularly in Brazil, where we established ourselves with such strong leadership in the main markets (including 50 percent of the São Paolo market), people associate us with quality and innovation. We were the first ones to launch 3D, digital, apps and much more.”

One of Fernandes’ greatest challenges has been the complexity of the transition from 35mm film to digital projection technology in the territories he oversees.“Latin America is very peculiar,” he observes. “It’s a very protective market and also very disorganized, with a lot of small and mid-sized players. The transition isn’t easy for companies like that, and some of the governments create hurdles. There’s no question that Latin America will follow the trend, we’ll digitize 100%, it’s just that it takes longer because of the difficulties we face down there—with imports, currency devaluation, red tape, everything you can imagine. To give you an example, in Brazil more than 100 projectors were stolen from one of the warehouses. It took years to get them there, and then they got stolen!

“Altogether, I do expect to see Latin America finishing with digitization in the next 12 to 24 months. We don’t want to see anyone left behind, it’s just taking longer… In some cases the government, now that they realize that some of the small players are falling behind, is trying to force the studios to continue supplying 35mm film. It shouldn’t be necessary, it shouldn’t be happening, it’s bad for everybody, but I can see that kind of action taking place. This is basically because the players wasted a lot of time just waiting for a magical solution or a miracle that never happened. Everybody ended up having to jump into the same VPF [virtual print fee] model—like it or not, it was the only one available.”

The slow digital rollout is emblematic of the difficulties of doing business in Latin America. “There are several things that make the Latin American market different or unique,” Fernandes explains. “We have to deal with a continuous effort by local governments to interfere in the business, and this is because they mix the concepts of entertainment and culture. They try to control and limit things that we do in order to artificially build diversity. And we keep trying to make them understand that preventing one type of content from having access doesn’t necessarily develop the other. The interference doesn’t only come on the programming side, but from all sorts of initiatives to tax revenues. It’s a challenging environment, not only for the foreign companies but the local companies too.

“We also have a big challenge trying to penetrate not only to the middle class but the lower classes and try to enlarge the client base. There is a lot of effort to see how we can reach new audiences and also expand to cities and areas of the countries where movies aren’t even offered.”

In Fernandes’ view, the key difference between North America and Latin America is that of “an extremely mature market with very low government intervention and a growth market with a lot of moving parts that you have to manage in order to do business. The good news is that we have been successful and the market is growing. Even with the difficulties that we face, we have been able to show very interesting growth and results for the company.”

Fernandes reports that in 2014 “the region in general performed better than the domestic market. Most of the countries in the region are growing; not only do we continue to open new sites in competitive markets, we are also opening sites in cities and states where there were no theatres available, so we are creating new clients and new demand. Even in 2014, with a major event like the World Cup being played in the region, we were able to beat the domestic market in terms of growth. Probably the only exception was Argentina, where we had a tough year because of economical conditions and Argentina getting to the finals of the World Cup. But other than that, all the other countries performed very well, and my expectation is that they will continue to grow. We have underscreened markets that we have to continue developing, and there is also room for growth in the markets where we have a presence.”

And Cinemark International is expanding its reach. “We are about to enter a site in Curaçao in the Caribbean and a site in Asunción in Paraguay—those are new territories for us. And last year we opened our first site in Bolivia,” Fernandes says.

While Cinemark International seeks more low-income moviegoers, at the other end of the spectrum is its Premium Large Format initiative. “It has been extremely well accepted,” Fernandes reports. “We are also catering to the higher classes with VIP screens, which are also very successful in upscale markets. Latin America is a region of differences. A certain part of the population doesn’t care about paying $20 to $25 a ticket for a VIP show, and we have a very high equivalency rate.”

Cinemark International has also been finding audiences for alternative programming. In a surprising revelation for U.S. readers, Fernandes notes, “We had the Super Bowl in theatres in Brazil with occupancy higher than 80%. People like American football down there? Yes, there are plenty of people that like it. It was playing on open TV, but they were paying $15 to see it on the big screen. We had an excellent turnout with the U.S. soccer championship league finals. Opera does well, and we launched classics in Latin America similar to what we do in the States and it’s very well accepted. Critics especially love to see the classics back on the screen. We have tried live content like music concerts—One Direction was a big hit down there. ‘Doctor Who’ was fantastic for us. There’s plenty of content that we are testing in order to understand the needs more on the promotional and marketing side to make the initiatives more and more successful and make a consistent business out of alternative content.”

As for regular programming, Fernandes opines, “The more local films we get, the better it is for the exhibition industry. There are countries where the cinematography is getting more and more important, but they still face problems with a continuity of product flow. We may have a fantastic year, and then two years with very little product. But in some countries like Brazil, Argentina, Chile, now Peru, Colombia, Mexico for sure, the local cinematography is important and in the best years can represent 20 percent of the box office. It can be meaningful and is a very welcome addition. The difficult part is that it’s not a very well-structured production capability that will ensure a constant flow of product. We have to deal with ups and downs.

“It’s also important because Hollywood doesn’t necessarily talk to all the audiences. There are some audiences that aren’t interested in the Marvel heroes or teen films, so it’s important to complement that with local product where people see their local actors and see films in their own language. (We have an increased number of dubbed films, but a very meaningful part is still subtitled.)”

As he prepares to accept his CinemaCon award, Fernandes pays tribute to company founder Lee Roy Mitchell. “Lee Roy is a visionary. There is this joke Tim [Warner] tells, that when Lee Roy was hiring him to run the international business, he was saying how fantastic these mega-cities in Latin America were—São Paolo, Buenos Aires, Santiago. And Tim asked, ‘So how many times have you been there?’ And Lee Roy said, ‘None. But I know they are like this.’ Lee Roy knows what he wants to attain, and he’s very good at selecting and working with people that can deliver. And even as a public company now for over six years, we still keep some of that culture that Lee Roy created. We keep running the company basically the same way we did when he was the majority owner. The concept and principles were so well established that it made the transition very smooth.”

As for Cinemark CEO Tim Warner, “It’s always been a great relationship. Tim is a fantastic leader. Without any international experience he has developed a lot of friends in Latin America just based on his personality. For someone who never traveled abroad until he was fifty-something, it is amazing what he’s accomplished. Tim is the kind of guy who allows you to do things your way, even when it’s not necessarily his way of doing things. He’ll say: Okay, prove me wrong. I think that is what developed a good relationship of trust between us—he gave me the room to implement things in the way I thought was right, and after ten years he confirmed that it was good relationship by offering me the job that he had. He keeps telling me, ‘Your job is probably the best job I had in my life, it’s the most fun, and people are charming and nice. I love your job!’”

For Fernandes, one of the most rewarding aspects of his own job is “being a source of employment for young generations. Most of the time we are the first job for these kids. I think we have a fantastic social role in these countries, because it’s not every company that wants to give the first opportunity to a kid. We have a huge turnover, they go on to fast-food chains or drug stores. We are initiating these kids in their professional lives. It’s nice to look back on how many thousands and thousands of kids we have introduced into the labor market.”

Currently, Cinemark International has 160 locations and nearly 1,200 screens. But there’s one cinema in particular that has special meaning for Valmir Fernandes. “The city where I was born, São Caetano do Sul, had no theatre. Or they had one, but it closed, and for years there was no theatre. So when a mall decided to establish itself there, I went to the developer and I said, ‘I don’t care what you say, Cinemark is going to be the movie company in this location, because it’s my city and I want my mom to go to a Cinemark theatre!’ And we have a very successful complex in a very nice mall in São Caetano. And Tim made sure that he put a plaque in the lobby saying that a person coming from the city is paying back by offering the theatre and a great movie experience. It’s not what I was expecting, but it’s a very nice touch.”

Fernandes sums up his journey by stating, “It’s been a fantastic ride for the last 20 years.” Parabéns, Valmir!

 

Lee Roy Mitchell on Valmir Fernandes:

What is Valmir’s greatest accomplishment at Cinemark?

When developing Brazil, we were going into a new market with a new product that had never been tried before in Latin America. He was put through a rigorous training course, learning our culture as well as our operations. Valmir's sole purpose at that time was to develop Brazil—we gave him a lot of latitude and support in helping him accomplish this task, which he did quite well.

What are his strengths as an executive?

In the interviewing process we learned that Valmir had the ability and the drive as well as the desire to be a leader. We added a few Cinemark ingredients to the mix, as I stated earlier, and the leeway to lead. Developing leaders is the Cinemark mantra.

Any memories you’d like to share?

One memory of Valmir that I think about often, which I thought was very funny at the time, although he did not feel the same: We brought Valmir to Dallas (Brazilian culture and all) for training, and as far as anyone knew he was a guy who needed a job, with no connection to the home office as he worked his way up to concessions. His lady manager caught him visiting and really came down on him about getting his cleaning and concession prepped for the next movie. Starting a top-level manager at the lowest denominator, cleaning restrooms and sweeping the lobby, etc., gives you the ability to appreciate your people in a much more meaningful way. Our culture is to be humble with a servant’s heart and lead by example. Valmir does this quite well—this is one of many reasons his people love him.

Tim Warner on Valmir Fernandes:

What are Valmir’s greatest accomplishments at Cinemark?

On a personal basis, Valmir’s greatest accomplishments are his wife Meissa, his daughter Isabella and his son, Nick. At Cinemark, Valmir took a great leap of faith when he joined our company. He left his job and joined Cinemark when Cinemark did not have one theatre in Brazil. He came to the U.S. and learned the theatre business from the ground up and returned to Brazil to lead our team effort to build the largest exhibition organization in Brazil.

What are his strengths as an executive?

Valmir’s strength is building and leading teams. He has great people skills, enjoys life, and these qualities benefit him in and outside of the company.

Tell us about your working and personal relationship with Valmir.

Valmir and I have now worked together for almost 19 years. He was the first person we hired in Brazil, and when I moved over to run the U.S. company Valmir became our international president. Valmir’s success is directly related to his leadership and people skills both within Cinemark and the industry.

More Tributes to Valmir

“Valmir has been a critical figure in the exhibition community in Latin America. Not only was he integral in establishing the modern cinema-going experience for audiences and helping to maintain the sustained growth in the region, but he has been an industry advocate for proper regulations to ensure our business can continue to prosper in Latin America. It is always a pleasure to work and strategize with Valmir.”

—Mark Viane, Co-President, International Theatrical Marketing and Distribution, Paramount Pictures

“As Mitch Neuhauser noted back in January, Valmir Fernandes is “an exemplary leader who leads with innovation and determination in making Cinemark synonymous with excellence throughout the motion picture theatre industry.”

Nevertheless, being an undisputed first-class executive in the global movie business is just another one of his countless strengths: Valmir is above all a fantastic friend, a great father and husband and, most of all, a superb human being.

Valmir and I met back in 2001, when he was key in the creation and development of Cinemark Brazil, where he was based as general manager for 10 years.

He was responsible for the great shift in quality and service in the local exhibition industry, by introducing the multiplex concept in the country in 1997.Under his administration, the company became the number-one exhibitor in the Brazilian market, and presently counts more than 550 screens and over 30% of share.

Since we first met, Valmir and I have shared many successes, a few fails, many trips, several roadshows, film premieres and soccer games, and we even paraded at the Rio Carnival dressed like birds back in 2012, when he was able to demonstrate to millions of people around the world his unparalleled samba skills.

As a colleague, it is a pleasure to work with someone who knows how to make a friendly and inspirational work environment inside and outside Cinemark International, a division that Valmir has successfully run as president since 2006.

Being recognized with the 2015 Global Achievement Award in Exhibition at CinemaCon appropriately reflects the amazing talent and the endless hours Valmir has spent ensuring that no stone was left unturned to make Cinemark International a leading and inspiring exhibition company in the film business today.”

—Eduardo Echeverria, Executive Vice President, Latin America,20th Century Fox International

“Valmir, 
you certainly deserve to be honored with the Global Exhibitor Award. Your contributions to our industry in Latin America turned Cinemark into a
 leading exhibitor across the region, and you have been a key partner to us in
 our mission of reaching Latin American families with our films.

On a personal and professional level—and I am sure my appreciation represents 
the opinion of each executive within the industry—we have learned and have 
grown along with your vision and your leadership over the last two decades, in
 which fundamental changes have impacted the global content distribution.

Cheers to you, Valmir, for such a deserved honor!”

—Martin Iraola, Senior VP, The Walt Disney Company Latin America

“Having known Valmir for more than ten years, I have found him to be an outstanding executive representing Cinemark Latin America in the most professional manner. Cinemark’s success in that region is attributable to Valmir and his dedicated international team. They have continued to broaden and expand business by building state-of-the-art cinemas and bringing a quality experience to a variety of cultures. Although the exhibition/distribution relationship can be contentious at times, Valmir has always found a way to understand problems thoroughly and resolve them diplomatically. He is an industry guy who makes decisions that are best for the overall health of our industry. This is a fantastic recognition for Valmir and I am extremely proud to call him a colleague and most importantly a friend. Congratulations, Valmir!!”

—Anthony Marcoly, President, Worldwide Cinema, RealD