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.”

Analyst: Coronavirus Pandemic Could Hurt Disc Sales

On the heels of Netflix adding nearly 16 million subscribers in 90 days and increased transactional VOD sales, consumer migration toward digital distribution during the coronavirus pandemic is undisputed.

New data from London-based GlobalData suggests shutdowns in the economy worldwide, including many retailers, has undermined sales of packaged media, including DVD and Blu-ray Disc as consumers question discretionary spending on home entertainment.

“It is clear streaming services are becoming integral to consumers’ lives and the numerous lockdowns across the world are encouraging people to spend more time in front of the TV or on a laptop,” analyst Zoë Mills said in a statement.

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Mills said increased streaming video could have a detrimental impact on the sales of DVDs for retailers not only during the lockdown but after as well as consumers are tied to these subscriptions and have less of a reason to purchase a physical movie.

Specifically, Mills said the home video market would be undermined by the lack of new releases driven by pushbacks and delays of theatrical titles by studios. The analyst cited the newest James Bond movie with Daniel Craig, No Time to Die, which saw its theatrical release delayed from April to November — if not longer. The postponement means the packaged-media release won’t happen until 2021.

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“Previous James Bond releases have offered a boost in retail sales and while this will instead be felt in 2021, for retailers already in trouble, with no notable releases this year, 2021 may be too far away,” Mills said.

Home Release Dates Uncertain After Movie, Original Series Postponements and Production Halts

Movie release postponements as well as production suspensions for films and original SVOD series due to the mounting coronavirus health crisis will likely lead to significant shifts in the home release calendar for the rest of the year.

With movies typically becoming available for disc or digital delivery three months or so after their theatrical openings, delayed home releases include several big Hollywood movies, including the Walt Disney Co.’s live-action Mulan; Universal Pictures’ latest “Fast and Furious” film, F9; and the Paramount Pictures horror sequel A Quiet Place: Part II.

Meanwhile, such original digital series as the Netflix comedy “Grace and Frankie” and Marvel’s “The Falcon and the Winter Soldier” on Disney+, will likely debut later than expected due to production halts.

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On the film front, Mulan’s scheduled March 27 theatrical opening has been called off, with no new date set — despite a star-studded premiere March 9 at the Dolby Theater in Hollywood that was attended by some 3,400 guests and a smaller London premiere March 12.

F9’s theatrical debut has been postponed by nearly a year, from May 2020 to April 2, 2021. According to a Twitter posting, “While we know there is disappointment in having to wait a little while longer, this movie is made with the safety of everyone as our foremost consideration.”

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A Quiet Place: Part II, slated to open March 20, has also been taken off the schedule, with no new date set.

The first big movie to be postponed was the latest James Bond film, No Time to Die, with Daniel Craig in his final turn as the fabled spy. On March 3 MGM, Eon and Universal Pictures announced that the planned April theatrical debut was off and the film, instead would open in the United Kingdom on Nov. 12 and in the United States on Nov. 25.

The companies said the decision came “after careful consideration and thorough evaluation of the global theatrical marketplace.”

Disney also pushed back the theatrical openings of two other movies, the horror film Antlers, original slated for April 17, and Marvel’s New Mutants, which was supposed to hit the big screen on April 3. No new dates have been set. New Mutants has already been delayed for years due to production issues and uncertainties associated with Disney’s buyout of Fox.

In addition to A Quiet Place: Part II, Paramount postponed the theatrical debut of The Lovebirds from April 3 to an unspecified date. The theatrical release of another Paramount film, Mission: Impossible VII, is up in the air after filming in Venice, Italy, was stopped in February due to the coronavirus outbreak there.

Also pulled from its originally scheduled theatrical release date is Sony Pictures’ Peter Rabbit 2: The Runaway, which was supposed to open March 27 in Europe and in the United States on April 3. The film is now slated to open on Aug. 7.

Most recently, Variety on March 13 reported that Disney “for a short time” has halted production and pre-production on The Last Duel, The Little Mermaid, Shang-Chi and The Legend of the Ten Rings, Home Alone, Nightmare Alley, Peter Pan & Wendy and Shrunk.

“While there have been no confirmed cases of COVID-19 on our productions, after considering the current environment and the best interests of our cast and crew, we have made the decision to pause production on some of our live-action films for a short time,” according to a studio statement, the Variety story said. “We will continue to assess the situation and restart as soon as feasible.”

The day before, March 12, various media outlets reported that Skydance Television, producer of “Grace and Frankie,” halted production of the seventh and final season of the comedy, which stars Jane Fonda, 82, and Lily Tomlin, 80.

Two days earlier, USA Today reported that Disney shut down production of “The Falcon and the Winter Soldier” in Prague.