Cinemark Upbeat on Theatrical Comeback Following Vaccine Deployment

Cinemark Holdings, the third-largest movie theater operator in the U.S., has what No. 1 exhibitor AMC Entertainment doesn’t: $750 million in free cash for sustaining operations. That much was disclosed Dec. 16 at the MKM Partners Virtual Investor Conference by Cinemark CFO Sean Gamble, who said the chain with 4,500 screens across 345 theaters has enough cash to fund operations — without consumers — into 2022.

No. 1 exhibitor AMC Theatres is looking for $750 million from the sale of stock and debt to sustain operations past next January. AMC, like Regal and Cinemark, saw its business shut down overnight in March following government-mandated closures to stop the spread of the coronavirus. Screens in major markets of California and New York remain mostly shuttered.

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Gamble said Cinemark also expects to get $100 million in tax refunds from the CARES Act, the bipartisan pandemic stimulus bill approved earlier this year.

CEO Mark Zoradi said the chain’s first priority entering 2021 is rebuilding the balance sheet, and not acquiring assets from fiscally distressed competitors such as AMC. News reports suggested Cinemark was looking to acquire select AMC screens.

“We are going to be very careful in taking cash that we have on hand … and risking it with acquisitions where we’re not certain what that particular outlet is going to do in a post-pandemic environment,” Zoradi said. “Until a landlord actually owns a property, it obviously is not appropriate for us to be negotiating with that landlord prior to that moment.”

The CEO, like others in Hollywood, said he was “shocked” by Warner Bros.’ decision to release its entire 2021 theatrical slate concurrently into homes through HBO Max. Zoradi said he remained positive Disney would not replicate Warner’s move following discussions with Disney CEO Bob Chapek.

“It’s a bit of an anomaly [in movie distribution] we’re seeing right now,” Zoradi said.

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