Just because movie theaters have reopened and Hollywood has begun releasing blockbusters again doesn’t mean the theatrical exhibition industry is back to normal. The pandemic wreaked havoc on many theater chain’s bottom lines, and while 2022 has been a year of some hits — including the massive Top Gun: Maverick and Doctor Strange in the Multiverse of Madness — the past few months have been very quiet in terms of blockbusters and box office. The top-grossing movie last weekend in theaters was still Top Gun: Maverick, which has been out for 15 weeks. Third place was the re-release of Spider-Man: No Way Home. August has been a very quiet month for new movies.
As a result of all that fiscal turmoil, one of the biggest theater chains in the world is filing for bankruptcy. Cineworld, the parent company of Regal Cinemas here in the United States, have filed for Chapter 11 bankruptcy in a Texas court. The chain says it expects to continue its business while it “implements its reorganization.”
In an announcement on their website, they say that “as part of its restructuring process, Cineworld expects to pursue a real estate optimization strategy in the US and intends to engage in collaborative discussions with US landlords to improve US cinema lease terms in an effort to further position the Group for long-term growth.” To this layman, that sounds like they are going to try to renegotiate their leases — and perhaps close some theaters if the negotiations don’t work out.
Here was Cineworld CEO Mooky Greidinger’s statement on the bankruptcy announcement:
The pandemic was an incredibly difficult time for our business, with the enforced closure of cinemas and huge disruption to film schedules that has led us to this point. This latest process is part of our ongoing efforts to strengthen our financial position and is in pursuit of a de-leveraging that will create a more resilient capital structure and effective business. This will allow us to continue to execute our strategy to reimagine the most immersive cinema experiences for our guests through the latest and most cutting-edge screen formats and enhancements to our flagship theatres.
Cineworld says it expect to emerge from Chapter 11 “during the first quarter of 2023.” We’ll see what the state of Regal — and the entire movie theater industry — looks like then.
