March 30 (Bloomberg) -- Dolby Laboratories Inc., the sound and video pioneer, is in talks to acquire naming rights to the former Kodak Theatre in Hollywood, home to the annual Oscars ceremony, two people with knowledge of the situation said.
Dolby, based in San Francisco, is negotiating with building owner CIM Group for long-term naming rights to the 3,332-seat theater at the Hollywood & Highland Center, said the people, who requested anonymity because the talks are private.
The discussions may end without an agreement, one of the people said, because Los Angeles-based CIM remains open to more offers as it seeks to secure the best price and terms. Photography icon Eastman Kodak Co. won bankruptcy court approval in February to end its 20-year sponsorship deal.
Any deal could be complicated because the Academy of Motion Picture Arts and Sciences, which puts on the annual awards show, is in negotiations to renew its pact to stage the Oscars at the venue. The academy could seek a bigger role in determining the winning bidder, one person said.
Sean Durkin, a spokesman for Dolby, didn’t respond to a telephone message seeking comment. Karen Diehl, an outside spokeswoman for CIM Group with Casey & Sayre, declined to comment. Natalie Kojen, a spokeswoman for the academy, said yesterday she wasn’t authorized to discuss the negotiations and no one who was authorized was available.
Kodak, based in Rochester, New York, signed a $74 million deal to gain naming rights in 2000, a year before the theater’s official opening. The company declared bankruptcy in January, after digital picture technology ate into its core photography business.
The same has happened in film, where suppliers like Kodak have been partially sidelined in the push by studios and exhibitors toward digital projection.
Dolby in Hollywood
Dolby has a long history of working at the Academy Awards, with equipment and sound engineers onsite for the show. The company’s audio formats are standard in most films and high-definition television shows.
Video and digital cinema, particularly the 3-D format, have become key growth areas for Dolby. The company lags behind RealD Inc., based in Beverly Hills, California, and Imax Corp., of Mississauga, Ontario.
Dolby’s system can be used on regular projection screens, allowing theaters that haven’t made the transition to show 3-D movies. The company also has been trying to expand into new markets by delivering surround-sound and picture-taking technology to improve experiences to tablets and smartphones.
The Hollywood & Highland Center, housing the theater, the Hollywood Renaissance hotel and a shopping mall, forms the heart of the area’s tourist district.
In addition to the Oscars, the venue has hosted “American Idol” finals, the Daytime Emmy Awards and ESPY Awards, as well as a 2008 Democratic Party Presidental debate. In 2011, Cirque du Soleil began production of a cinema-inspired show called “IRIS.”
Dolby rose 9 cents to $38.36 at 1:10 p.m. in New York. The shares had climbed 25 percent this year through yesterday.
To contact the reporter on this story: Cliff Edwards in San Francisco at email@example.com
To contact the editor responsible for this story: Anthony Palazzo at firstname.lastname@example.org