That's (or was) entertainment

From AMF Bowling Worldwide Inc. to Zany Brainy Inc., from Carmike Cinemas Inc. to Unapix Entertainment Inc., from Crown Books Corp. to Wallace's Bookstores Inc., multi-location and franchise business enterprises are filing for Chapter 11 by the bucketful. What do these businesses have in common that other national chains do not?

For example, why aren't restaurant chains failing any faster than their historical average, or automobile franchises, or drugstore chains?

I am not saying restaurant or drugstore chains or auto franchises are untouchable — for example, Advantica Restaurant Group (owner of the Denny's restaurant chain) and Rite Aid Corp. continue to struggle under heavy debt burdens. But these kinds of businesses have not been suffering industrywide meltdowns in the last couple of years.

To generalize (as I always do), the chains that are suffering the most these days are in industries that rely on discretionary leisure spending.

Have an afternoon to kill? Maybe you'll go bowling, watch a movie or buy a book. But when cash flow gets tight or you are worried about the economy, maybe you'll bowl one less game, or not at all. Maybe you'll rent a movie rather than visit the theater, and buy a low-profit-margin paperback rather than a high-profit-margin hardcover. Indeed, you might even go to the library and skip the book purchase altogether.

I know I'm beginning to sound like a broken record, but I still am unable to understand all the economic gurus who insist we're not in a recession. Yes, I am aware that, in technical terms, the situation in the U.S. does not meet the definition of a recessionary economy. But these sure aren't boom times, either (unless you're a bankruptcy lawyer).

Our economy is sucking wind big time. And the only reason we continue to delude ourselves into thinking that things aren't so bad is that the rest of the world is Hoovering even more.

In fact, common wisdom has it that the U.S. economy is actually maintaining the fragile global economy, and that, if the U.S. officially reaches a recession, we will soon be experiencing a global depression no amount of Prozac can salvage.

We continue to see megacompanies failing for megacompany reasons. For example, in one of my columns early this year ("New Year's Forecast," Jan. 3), I cited various statistics concerning public debt default levels not seen since 1991-1992. Well, forget that.

The 2001 mid-year statistics are now in, and public debt default levels are now at an unprecedented level. In fact, you'll be able to tell your grandchildren some day that you survived (hopefully) the year in which the amount of public debt in default officially exceeded one gazillion dollars.

Who'd have thunk it?

But it is more than the continuing inability to refinance maturing debt that is haunting the economy. Consumers simply are not spending as much as they used to — particularly on discretionary leisure activities.

All those new, expensive movie theaters that were built by Carmike, Edwards Theatres Circuit Inc., Loews Cineplex Entertainment Corp. and Silver Cinemas International Inc., among others, assumed there would be a steady, continuing growth in consumer demand for Hollywood's finest. But tell me, when was the last time you saw a movie, other than the Disney flick you took your children to?

For example, take "Captain Corelli's Mandolin." This is the kind of classic romantic movie that married couples have been drawn to for years.

Well, I hereby predict it is going to bomb at the box office. Even though it stars Nicholas Cage in hopes of attracting a younger crowd, and even though the airwaves are saturated with attractive previews, are you going to see it? I didn't think so. Nor can it depend on the 13-to-19-year old crowd that still flocks to movies like "American Pie 2."

Perhaps an even better example is the remake of "Planet of the Apes." In my wasted youth, I saw them all — "Planet of the Apes," "Beneath the Planet of the Apes," "Escape from the Planet of the Apes," "Conquest of the Planet of the Apes" and "Battle for the Planet of the Apes" (never challenge me to the original Trivial Pursuit). I've seen the trailers for the new one and they look pretty good — plus Tim Burton is a good director, plus Charlton Heston plays a cameo that must be a hoot.

In the conspicuously consumptive Reagan years and in the more recent me-me-me Clinton years, I'd already have seen the movie by now. But that was then, and with the cautious conservatism of our cost-sensitive society now, I just find it hard to shell out $8.75 at the movie theater unless we're talking Clint Eastwood or Harrison Ford.

But let me get to the point: Today's United States is spending less on discretionary leisure activities not necessarily because we have less money to do so. It's more because the weakness at the top of the economic chain — megapublic debt defaults by megapublic companies — is trickling down to us common folk in the form of economic malaise and financial prudence.

Here's the real litmus test: What are you going to do when George W. Bush sends you your tax rebate of $300 or $600? Are you going to rush to the bookstore to buy the top 10 hardcovers, then head on over for some serious bowling capped by a night at the movies?

Or are you putting your check straight into the bank without even thinking about it?

Evan D. Flaschen is a partner at Bingham Dana llp and co-head of its 80-lawyer financial restructuring group. He splits his time between the firm's New York and Hartford, Conn., offices.