Who would want to buy a chain of cinemas? Admissions in the UK are now one-tenth of the pre-television era audiences of 1946; the rise of the DVD represents a fresh threat; and the big Hollywood studios, some of the world's most powerful companies, constantly demand a bigger slice of the box office takings.

The reality, though, is that a scrum of would-be cinema owners is already forming to fight for ownership of one of the top-five UK chains. Michael Green, only weeks after being ousted as chairman of Carlton, is planning to bid for the 330-screen UCI business, which is being auctioned by owners Vivendi Universal and Viacom.

Mr Green is thought to be one of about half a dozen interested parties. Others are likely to be venture capital firms, including Hg Capital. Then there will be existing cinema owners, such as Vue Entertainment, which last year bought Warner Village, and Robert Tchenguiz, the property tycoon with a stake in the Odeon business who is a great friend of the Reuben brothers, Mr Green's reputed backers.

There could also be pure financiers, such as Guy Hands of Terra Firma, although he is said to think that the reputed £300m-plus price tag for UCI already looks excessive.

If Mr Green fails to land UCI, his cinema ambitions do not have to stop there. There will be another chain for sale soon - there usually is.

Cinema chains in the UK seem to be bought and sold perpetually. At times, Hollywood studios, such as Warner and Universal, think they are the natural owners and talk of cinemas as strategic assets. At other times, property specialists - who appreciate local market dynamics and are prepared to ride the economic cycle -sense an opportunity.

The finance specialists think this is really their domain, arguing that cinemas are just asset-backed businesses where the punters pay in hard cash at the door; the skill lies not in selecting the films but in optimising debt levels and managing the cashflow.

It is not clear in which category Mr Green thinks he belongs - maybe as a cinema specialist, given that Carlton owns the leading advertising contractor. Just as relevant, however, will be his experience gained in being part of ITV's consolidation into one main company.

Consolidation and deal-making now represent the only game in town in the cinema business. Legal & General Ventures, when it financed Vue's £250m takeover of Warner Village last year, stated from the outset that it would be interested in more takeovers.

Mike O'Donnell, an L&G Ventures director, would not comment yesterday on any bid for UCI but explained the original Warner deal this way: "We thought the market was likely to consolidate and we also thought if you owned the most attractive player in that market you would be in a strong position to lead that consolidation."

After UCI is dispatched, the consolidation attention will turn to UGC, where Vivendi Universal also has a part-share and is thought to want to exit. The ownership of Odeon, the market leader with more than 600 screens, also looks deeply unstable. German investment bank WestLB's principal finance group, formerly headed by Robin Saunders, led the £431m purchase two years ago; that price now looks over the top. WestLB is thought to be trying to offload its 43% stake, with Mr Tchenguiz, owner of 35%, said to be the leading bidder.

Protection

In theory, the cinema business in the UK could consolidate into just two or three main chains within a couple of years. That, argue some of the owners, is required just to gain greater protection against what they regard as the ever-increasing muscle of the Hollywood studios and their distributors.

A power struggle between cinema and distributor is effectively fought every week in the UK because the precise split of box office takings is negotiated on a film-by-film basis.

In the era of the DVD, cinemas have to face the fact that studios rely less and less on box office takings. The video and DVD market is already about four times the size of the box office market and, in the case of most blockbusters, studios also collect huge merchandising revenues. A box office flop can still be a success for the studios if it sells well in DVD format; the cinemas need films to be successful immediately.

The good news for the cinema owners is that the punters in the UK have been showing up in greater numbers since the first multiplex cinema, The Point in Milton Keynes, opened in 1985. It was the moment the postwar decline in attendances was arrested, and multiplexes are now the bulk of the market.

There have been occasional down years since then, but the broad trend has been strongly upwards - indeed, attendances have tripled since the dark days of 1984 and average ticket prices in the UK are higher than in France, Germany, Spain and Italy. Mr O'Donnell argues that it is now "a predictable and highly cash generative" industry.

But he does not pretend that running cinemas is terribly complicated. "Before we bought Warner Village, we did a lot of research on what happens in recession and what happens in good weather and so on. But what we found is that it comes down to how good the films are."

That, of course, is wholly beyond the control of the cinema owners. A good year or a bad year can be defined by the relative success or failure of just a few releases. Last year, poor numbers - attendances down 5% - would have been worse without the pre-Christmas contributions of the final part of the Lord of the Rings trilogy and the Finding Nemo animation. Harry Potter was sorely missed.