Regal Cinemas Owner Eyes New Warner Release Window; AMC Entertainment CEO Livid

Reaction from Warner Bros.’ landmark decision to effectively scuttle the theatrical window on all new movie releases in 2021 has run the gamut of emotions among exhibitors.

Adam Aron, CEO of AMC Theatres parent AMC Entertainment, blasted the decision, contending WarnerMedia is sacrificing “a considerable portion of the profitability of its movie studio division” to help jumpstart SVOD platform HBO Max. Aron said the decision also negatively affects filmmakers and production partners.

AMC Entertainment CEO Adam Aron

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“We have already commenced an immediate and urgent dialog with the leadership of Warner on this subject,” Aron said in a statement.

The CEO over the summer hammered out a reduced theatrical window agreement with Universal Pictures, which affords the studio PVOD distribution into homes 17 days after theatrical release on titles with less than $50 million box office. AMC also shares in the PVOD revenue.

Aron had been understanding of Warner’s decision to release DC superhero sequel Wonder Woman 1984 in theaters and HBO Max on Christmas Day. But an entire year’s film slate is another issue.

“As this issue gets sorted out, we are nonetheless encouraged that vaccines protecting society at large against the coronavirus are very much at hand,” Aron said. “So, it is our expectation that moviegoers soon will be able once again to delight in coming to our theatres without any worry — viewing the world’s best movies safely in our big seats, with our big sound and on our big screens.”

Read Also: Warner Bros. Releasing All Movie Releases Same Day on HBO Max, Theaters in 2021

Meanwhile, Cineworld, owner of No. 2 (and temporarily shuttered due to the pandemic) exhibitor Regal Cinemas, with more than 7,000 screens in the U.S., said it expects to iron out a new distribution agreement with Warner going forward.

In a statement, Cineworld said it understood Warner’s decision to bow Wonder Woman 1984 directly to Max due to the theater closings. It also remains “very encouraged by the giant steps achieved” with regards to the COVID-19 vaccination process, which it expects will be put in place earlier than previously anticipated.

“This will generate significant relief for our industry and enable our cinemas to make a great comeback,” Cineworld said.

The exhibitor said that when a vaccine is available, it would look to reach an agreement with Warner about release windows and financial terms that will work for both sides.

“Big movies are made for the big screen and we cannot wait to reopen our cinemas in [the first quarter] in order to offer our customers, as always, the best place to watch a movie,” Cineworld said.

Regal Cinemas Owner Confirms Temporary Closure

As expected, Cineworld Group Plc., parent of the second-largest theatrical chain in the United States, Regal Cinemas, said it would shutter all screens for an undisclosed period, beginning Oct. 8. Over the weekend media reports had surfaced the British-based exhibitor would re-shutter screens. The decision puts more than 45,000 jobs at risk, and sent shudders through the exhibitor market. AMC Entertainment shares are down nearly 11% in early trading.

The move comes after ongoing surges in coronavirus infections across the country and health concerns among consumers have seen Hollywood studios push back releases of major tentpole movies until 2021. The latest pushback included MGM further delaying the release of Daniel Craig’s last James Bond movie, No Time To Die, to April 2021.

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“In response to an increasingly challenging theatrical landscape and sustained key market closures due to the COVID-19 pandemic, Cineworld confirms that it will be temporarily suspending operations at all of its 536 Regal theatres in the U.S. and its 127 Cineworld and Picturehouse theaters in the U.K. from Thursday, 8 October 2020,” the chain said in a statement.

Indeed, with Warner Bros.’ Tenet again the top weekend domestic box office draw with just $2.7 million in ticket sales, down 20.6% from the previous weekend, theaters are losing money staying open. With many screens in major markets such as Los Angeles and New York remaining shuttered, and the recent high-profile COVID-19 infections of President Donald Trump and the First Lady Melania Trump, consumer confidence among moviegoers will remain low.

“People aren’t dying to see a movie,” Michael Pachter, media analyst with Wedbush Securities in Los Angeles, said in a note earlier this summer.

Regal Cinemas Parent May Close All U.S., U.K. Screens as Exhibitor Industry Deals with Further Movie Release Delays

In a stunning blow to the movie theater industry, Cineworld, parent to Regal Cinemas, may re-shutter all screens in the United States and United Kingdom. The nation’s No. 2 theater chain had just announced on social media the re-opening of all screens in North Carolina.

Cineworld Oct. 4 tweeted, “We can confirm we are considering the temporary closure of our U.K. and U.S. cinemas, but a final decision has not yet been reached. Once a decision has been made we will update all staff and customers as soon as we can.”

Media reports say the move by the second-largest exhibitor in the world, after AMC Theatres, comes following Metro Goldwyn Mayer and Universal Pictures’ decision to further delay the release of the new James Bond movie, No Time to Die, until April 2021. That followed Disney’s previous decision to further delay the release of Marvel Studios’ Black Widow, among other tentpole releases, until 2021.

Regal runs 546 theaters (7,211 screens) in the U.S., in addition Cineworld’s 128 theaters in the U.K. and Ireland. The company lost $1.6 billion through June 30.

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The industry has been grappling with the effects of the coronavirus pandemic since March when screens worldwide were forced to close. Industrywide revenue is down more than 75% year-to-date.

AMC Theatres, which has re-opened about 75% of its domestic screens, reportedly has enough liquidity to continue operating about six months. That’s because operating largely empty theaters is costing the chain about $115 million monthly in overhead expenses.

As a result, S&P Global Ratings Oct. 2 downgraded the parent company’s fiscal rating to CCC- from CCC+. The lower grade makes it harder for the chain to borrow money.

“A liquidity crisis is all but inevitable even if the company were to fully re-open all of its theaters,” S&P wrote in a note.

Specifically, the report contends cinema attendance will remain constrained by consumers’ health and safety concerns and social-distancing measures until an effective treatment or vaccine becomes widely available.

The firms believes a vaccine won’t be widely available until mid-2021, with the exhibitor industry not fully recovering to 2019 levels until 2022.

Michael Pachter, media analyst with Wedbush Securities, argues that going to the movies should not be a life and death decision for families.

“Theatrical exhibition is in the middle of a perfect storm,” Pachter wrote in a note over the summer. “Theater closures not only deplete cash reserves and sources of liquidity, but may alter consumer behavior indefinitely.”

Regal Cinemas Owner Posts $1.58 Billion Half-Year Loss

With a business model on involuntary lockdown since mid-March due to the coronavirus pandemic, Cineworld Group Plc, the London-based parent of U.S. theatrical chain Regal Cinema, reported a $1.58 billion pre-tax loss for the fiscal half-year, ended June 30. The chain reported a profit of $117.4 million during the previous-year period.

Revenue fell to $712.4 million, down 66% from $2.1 billion the same period last year. Ticket sales fell 65% to 47.5 million, from 136 million.

CEO Mooky Greidinger said the impact of COVID-19 on the company’s business and the wider leisure industry has been substantial. He said the company has raised $360.8 million of liquidity to support the operations going forward.

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“During this unprecedented time, our priority has been the safety and health of our customers and employees, while at the same time preserving cash and protecting our balance sheet,” Greidinger said in a statement. “Our mitigating actions included reducing and deferring costs where possible; making use of government support schemes for our employees; partially delaying capital investments; and suspending our dividend.”

Greidinger said Warner Bros.’ thriller Tenet from director Christopher Nolan has shown promise returning consumers to theaters. The movie has generated more than $250 million at the global box office, including topping $30 million in the U.S. — despite most screens in California and New York remaining shutdown.

“There can be no certainty as to the future impact of COVID-19 on [Cineworld],” Greidinger said. “If governments were to strengthen restrictions on social gathering, which may therefore oblige us to close our estate again or further push back movie releases, it would have a negative impact on our financial performance and likely require the need to raise additional liquidity.”

Regal to Now Begin Opening U.S. Theaters Aug. 21

Regal will begin opening its U.S. theatrical locations Aug. 21 “in response to the recent changes in the upcoming theatrical release schedule,” according to parent company Cineworld.

The theater chain had previously announced it would open July 10.

Christopher Nolan’s Tenet, opening in the United States Sept. 3, will headline new films coming to the theaters such as Unhinged, Greenland and Broken Hearts Gallery, along with the film slate scheduled to release throughout the remainder of 2020, including Wonder Woman 1984Black WidowNo Time to DieSoul and The King’s Man, according to the company.

“Welcoming theatergoers back to our cinemas will be a celebration for not only our team and our industry, but most importantly for the fans who have been anxiously awaiting the year’s upcoming releases,” Mooky Greidinger, CEO of Cineworld, said in a statement. “With the health and safety of our staff, customers and communities as our top priority, we are happy to invite audiences to return to the timeless theatrical experience that we have all dearly missed.”

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Regal theaters will enforce previously announced health and safety measures that adhere to the latest CDC and public health guidelines, including sanitization procedures, new social distancing protocols, and mandatory mask policies for Regal employees and guests, according to a press release.

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“Regal will continue to monitor the situation closely and follow any changes to regulations or guidance from public health officials,” according to the press release.

For additional information, consumer can visit the mobile app or REGmovies.com.

Regal Theaters to Reopen July 10

Cineworld, parent company of Regal, has announced the reopening of its theaters starting July 10.

“Regal will take all the necessary measures to keep customers and its team safe,” read a company press release. “Among other things, the seats in the auditoriums will be limited to allow social distancing, along with increased sanitization and cleaning.”

The phased reopening will consist of a majority of the circuit opening on July 10 with the remainder of theaters open on July 24. Consumers can view opening plans on the mobile app or online at REGmovies.com.

“Research shows how much people miss the cinemas. We are thrilled to be back,” said Mooky Greidinger, Cineworld CEO, in a statement. “With the great movies ahead including Mulan, Tenet, A Quiet Place Part II, Wonder Woman 1984, No Time to Die, Black Widow, Soul, Top Gun: Maverick and many more, we at Regal are committed as always to be the best place to watch a movie.”

Regal will offer a wide selection of classic movies based on feedback from moviegoers and studio partners, according to the release. The movies will be available at a discounted price of $5 for adults and $3 for children. In anticipation of the opening, guests who purchase $50 in Regal eCards June 19 through June 25, will receive a free $15 concessions promo eCard.

Through research conducted with members of the Regal Crown Club, an overwhelming 66% of the customers responded they were ready to come back without hesitation, according to the press release.

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Reopening plans include a range of new health and safety measures based on guidelines provided from the CDC and other public health organizations, according to the press release. Regal will also provide new contactless payment options and innovative sanitizing methods including:

  • Contactless payment. Along with the ability to purchase tickets in advance on the Regal mobile app, guests will now have the ability to purchase concession items from the app.
  • Ultra Low Volume (ULV) Foggers. Employees will sanitize every auditorium and seat after each movie using new electrostatic fogger equipment. This form of deep sanitization is highly effective in disinfecting all materials with a non-toxic formula that is fast drying, according to the press release.

Along with the above procedures, each theater will sanitize high-contact points on an increased schedule and use floor markers throughout the building to assist with social distancing.

Regal Owner Joins in Blasting Universal for Window Strategy

Regal theater chain owner Cineworld April 29 added its voice to criticism of Universal over its strategy to break traditional theatrical windows, boosted by the success of the studio’s premium VOD release of Trolls World Tour.

“We make it clear again that we will not be showing movies that fail to respect the windows as it does not make any economic sense for us,” read the Cineworld release.

In its criticism, Cineworld followed AMC Theatres, which April 28 vowed not to show Universal films because of the studio’s stance. On the heels of Trolls World Tour generating upwards of $100 million from its premium video-on-demand release, NBCUniversal CEO Jeff Shell April 28 told The Wall Street Journal the studio would pursue a simultaneous theatrical/home entertainment release strategy going forward.

“The results for Trolls World Tour exceeded our expectations and demonstrated the viability of PVOD,” Shell said. “As soon as theaters reopen, we expect to release movies on both formats.”

Like AMC, Cineworld reasserted its support for a window and scolded Universal.

“Cineworld and Regal’s policy with respect to the window is clear, well known in the industry and is part of our commercial deal with our movie suppliers,” read the press release. “We invest heavily in our cinemas across the globe and this allows the movie studios to provide customers all around the world the opportunity to watch movies in the best experience. There is no argument that the big screen is the best way to watch a movie. Universal unilaterally chose to break our understanding and did so at the height of the COVID-19 crisis when our business is closed, more than 35,000 employees are at home and when we do not yet have a clear date for the reopening of our cinemas. Universal’s move is completely inappropriate and certainly has nothing to do with good faith business practice, partnership and transparency.”

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The press release noted that Cineworld CEO Mooky Greidinger approached Comcast chairman Brian Roberts on March 19, after the Trolls World Tour PVOD announcement, and told him: “Nice words from your team are worthless if we cannot trust you as a partner. The message that the media has portrayed is: ‘Hollywood breaks the window’ — well, this is not true! All our partners called us in a timely manner and told us that in the current situation they want to shorten the window for movies that were already released as cinemas are closing. Most importantly, they all reassured us that there will be no change to their window policy once the cinema business returned. Unfortunately I missed a similar message in Universal’s announcement… not only did Universal provide no commitment for the future window — but Universal was the ONLY studio that tried to take advantage of the current crisis and provide a ‘day-and-date’ release of a movie that was not yet released.”

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The release went on to say the company “was always open to showing any movie as long as the rules were kept and not changed by one-sided moves.”

“We have full confidence in the industry’s current business model,” the release read. “No one should forget that the theatrical side of this industry generated an all-time record income of $42 billion last year and the movie distributors’ share of this was about $20 billion.”

Netflix & Co. Push Back in Post-Oscar Theatrical Window Dispute

The Academy Awards may be over, but that hasn’t stopped the controversy surrounding Netflix’s 10 Oscar nominations (and three wins) for original movie Roma, whose release didn’t adhere to the traditional 90-day theatrical window.

Netflix, per chief content officer Ted Sarandos’ longstanding pledge to release movies globally via streaming concurrent with theatrical distribution, has run afoul of exhibitors and industry awards.

Director Steven Spielberg, a senior member of the Academy board, is reportedly looking to have Netflix’s movies bypassed for future consideration unless the service honors the window. Spielberg believes Netflix’s films should be reserved for TV-based Emmy Awards.

“Steven feels strongly about the difference between the streaming and theatrical situation,” a spokesperson from Spielberg’s Amblin production company told CNBC. “He’ll be happy if the others will join [his campaign] when that comes up [at the Academy Board of Governors meeting].”

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British exhibitor Cineworld – the second-largest chain in the world – withdrew its support for the British Academy of Film and Television Arts after the organization awarded Roma with its Best Film honor.

Netflix, March 3 in a social media post, reiterated its support for theatrical distribution – and streaming.

“We love cinema. Here are some things we also love:

Access for people who can’t always afford or live in towns without theaters. Letting everyone, everywhere enjoy releases at the same time. Giving filmmakers more ways to share art.

These things are not mutually exclusive.”

Oscar-nominated director Ava DuVernay (13th) whose upcoming documentary about the Central Park Five – When They See Us– begins streaming on Netflix in May, defended the service’s strategy.

DuVernay contends the SVOD pioneer affords lower profile films wider distribution through streaming than is available theatrically.

“This is a Board of Governors meeting,” DuVernay said in a tweet directed to board members. “And regular branch members can’t be there. But I hope … that you’ll have filmmakers in the room or read statements from directors like me who feel differently.”

Netflix’s next big Awards movie – The Irishman – from director Martin Scorsese and starring Robert De Niro, Al Pacino, Joe Pesci and Harvey Keitel, among others, begins streaming later this year.

 

 

 

No. 2 Global Theater Chain Cineworld Enters Netflix ‘Roma’ Dispute

Cineworld, the world’s second-largest theatrical chain (after AMC Theatres), has joined a growing dispute regarding Netflix’s aggressive marketing foray into industry movie awards.

The U.K.-based chain, which acquired Regal Cinemas last year for $3.6 billion, this week informed the British Academy of Film and Television Arts (BAFTA) that it was pulling support for the organization after it honored Netflix original movie, Roma, with the Best Film award, among others, in February.

In a letter to BAFTA, Cineworld cited the organization for breaking its rules by nominating a “made for TV” movie for awards consideration. Netflix’s black-and-white film about a 1970s family in Mexico picked up four BAFTA trophies, including for cinematography, foreign language and director (Alfonso Cuarón).

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While Netflix’s aversion to the traditional 90-day theatrical window for original movies isn’t new, the streaming pioneer’s aggressive marketing push and success with Roma has upped angst among exhibitors and some industry veterans.

In an attempt to assuage industry protocol, Netflix released Roma in select (largely) independent theaters early, followed quickly with global streaming access.

Combined with a marketing blitz in Los Angeles and New York, Roma picked up 10 Oscar nominations, winning the same three BAFTA categories – but not Best Picture.

BAFTA, which denied it broke its own rules affording Roma awards consideration, said it would initiate a “review of our eligibility criteria in the coming months,” as reported by Deadline.com.

Netflix, which reportedly spent $30 million marketing Roma to voting members of the Academy of Motion Picture Arts and Sciences, upped its marketing spend after one of its first original movies – critically acclaimed Beasts of No Nation, starring Idris Elba – was shunned by major industry awards in 2015, despite 91% favorable rating on Rotten Tomatoes.

The film generated just $90,000 at the box office following a nationwide exhibitor boycott.

Notably, Elba became the first actor to win a SAG best supporting actor award for his performance without being nominated for an Oscar.