Focus on Suppliers

Cardio Theater, ClubCom Merge

PITTSBURGH — Cardio Theater and ClubCom merged on Aug. 17, a transaction valued at $10 million. The result: Cardio Theater, a provider of television entertainment systems, is now a wholly owned subsidiary corporation of ClubCom, a leading broadcasting company for place-based communities.

The merger also consolidates within one organization the E-Zone installation base that was purchased by ClubCom and Cardio Theater earlier this year.

“The merger represents a synergistic convergence of hardware and content,” stated Tom Lapcevic, ClubCom's chairman and CEO, in a release. “The result is a standardized entertainment platform for the fitness industry that systematically integrates the powerful attributes of ClubCom programming with Cardio Theater and E-Zone hardware technologies.”

Indeed, with 6,000 installations worldwide, Cardio Theater is a leading hardware provider. And ClubCom provides its brand of video music programming to 600 facilities. Together, combined with the E-Zone component, the companies can offer a whole entertainment package of hardware and content.

“Tom and I recognized that we saw the future exactly the same and that it made sense for us to put our resources together and merge our companies,” Tony de Leede, president of Cardio Theater, told Club Industry.

Not only will this merger give members new entertainment options, it will also give clubs new opportunities to make money by selling advertising. “ClubCom has developed 15- to 20-second…spots that can be customized immediately to the club and added in between the music videos and other programming,” explained de Leede.

Now advertisers can also buy additional spots on the TV channels. “It is going to take the health club industry in a whole new direction in additional profit centers,” de Leede said.

As part of the transaction, Cardio Theater shareholders — most notably de Leede — became shareholders of the ClubCom parent corporation. While not taking an extremely active role in the merged company, as a partner de Leede will be involved with its direction — a direction beneficial to Cardio Theater.

“Since I've been with Cardio Theater, I've always recognized the need for and wanted a content component,” he said.

“I think the merger is a home run,” de Leede added. “I see the future, and the future is the content.”

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