Cinemark Theaters Staying Open For Now

On a day movie theater stocks took a tumble on Wall Street following news Regal Cinemas would be re-closing all screens temporarily, beginning Oct. 8, No. 3 exhibitor Cinemark said it would maintain operations of about 80% of its screens.

Plano, Texas-based Cinemark brands include Century, CinéArts, Tinseltown and Rave, operating 534 theatres and 5,977 screens globally (332 theatres and 4,522 screens domestically; 202 theatres and 1,455 screens throughout South and Central America).

The chain lost $170 million in its most-recent fiscal period (ended June 30), with revenue down 67% to $552.6 million, compared with $1.67 billion for the six months ended June 30, 2019.

“Cinemark’s reopening plan was designed with multiple contingencies in place to ensure we are able to be nimble and react as needed to this ever-changing environment,” the chain said in a media statement. “We do not currently have plans to close our U.S. theatres and are continuing to align with demand, including reducing operating hours and days while we await new studio content to encourage theatrical moviegoing.”

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Cinemark might be waiting a while. Warner Bros. plans to further delay the release of sci-fi reboot Dune to 2021 from its original Dec. 18, 2020, release date. That follows MGM’s decision to again postpone releasing James Bond movie No Time To Die with Daniel Craig until next year.

Warner Bros.’ Labor Day release of Tenet was supposed to jumpstart domestic moviegoing. Instead, the Christopher Nolan-directed espionage thriller has generated just $45.1 million domestically after five weekends in the United States. The film has generated $262 million internationally for a total gross of $307.1 million.

Cinemark Oct. 1 unveiled a marketing campaign giving away 1,000 “Private Watch Parties,” for Halloween, beginning Oct. 9.  A Cinemark Private Watch Party offers the opportunity to rent an entire auditorium for up to 20 guests to watch a film of their choice with the group of their choice. Standard pricing for a Private Watch Party begins at $99 with no minimum concession purchase.

Meanwhile, No. 1 exhibitor AMC Theatres has not provided updates whether it plans to close any domestic screens. Analysts last week suggested the chain has about six months of liquidity left without ticket sales.

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.”

Warner’s ‘Tenet’ Eyeing Second Major Weekend Box Office as AMC Re-Opens 70% of Domestic Screens

Following a surprise opening box office weekend (Aug. 26-30) of $53 million outside the United States and China, Warner Bros.’ Tenet got a boost Sept. 1 when AMC Theatres announced that 70% of domestic screens would be open for business this weekend — including screens in California. Regal Cinemas and Cinemark are re-opening screens as well in key markets.

The return of the domestic  and global box office is key to Hollywood returning to movie production and titles being released into retail channels, including transactional VOD and packaged media.

By this weekend AMC will have resumed operations at approximately 420 theatres nationwide. AMC will open more than 140 theaters this week, with the vast majority of re-openings taking place on Thursday, Sept. 3, the same day director Christopher Nolan’s Tenet opens in the United States.

The next day, Friday, Sept. 4, AMC expects its first California theaters to reopen, when it resumes operations at seven theaters in and around San Diego. AMC is closely monitoring all local directives and will follow all guidelines on auditorium capacity.

AMC expects to make announcements about additional markets in California, New Jersey and other areas of the country in the coming weeks, once theatres are authorized to open by state and local officials.

“The first two weekends of operations have exceeded our expectations in terms of guests returning to the movies and in terms of their feedback about our extensive ‘AMC Safe & Clean’ policies and procedures,” CEO Adam Aron said in a statement.

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.

Theater Group Sues New Jersey to Re-Open Screens

The National Association of Theatre Owners (NATO), including AMC Theatres, Cinemark and Regal Cinemas, has filed a lawsuit against New Jersey Gov. Philip Murphy and Judith Persichilli, acting commissioner of health of New Jersey, for their legal mandates keeping movie theaters shuttered due to the coronavirus pandemic.

The suit, filed July 6 in U.S. District Court for the Court of New Jersey, alleges the state and Murphy are acting “unconstitutional and unlawful” by allowing certain businesses and places of public assembly to reopen, while requiring movie theatres to remain closed.

“COVID-19 represents a serious public health risk, and plaintiffs support fair and reasonable actions by the government to address that risk,” read the complaint. “However, the government-mandated total closure of movie theatres is neither fair nor reasonable, and is instead a violation of plaintiffs’ First Amendment rights of freedom of speech and freedom of expression, equal protection of the laws, due process under the law, and is a ‘taking of property’ without just compensation.”

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NATO contends movie theaters have been unfairly shutout of the government-mandated business re-openings, which include churches, museums and libraries, which are allowed no more than 100 people or 25% of capacity.

“Shopping can be done outdoors or virtually … [but] shopping malls have been allowed to reopen,” read the complaint.

NATO claims there is no “rational basis” for the distinction Gov. Murphy has drawn between places of worship and movie theaters, both places of public assembly.

“In fact, many churches lacking a building of their own, or lacking the capability to safely host religious services during this period, hold their religious services in movie theatres,” NATO said.

The trade group said operators nationwide are spending millions of dollars incorporating sanitization protocols, ticketless admissions, no-contact concessions and air purifiers for planned re-opening by the end of the month. New Jersey is one of the few states that has not yet allowed theaters to re-open.

The suit seeks unspecified financial damages (besides legal fees), asking that NATO’s members be treated in the same manner as comparable entities under the governor’s orders, and be permitted to reopen as other comparable places of public assembly have been allowed to.

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.

NBCUniversal’s Jeff Shell: ‘Not Realistic’ to Ignore PVOD

After setting off an industry firestorm saying Universal Pictures would pursue a movie-release strategy combining theatrical and premium video-on-demand, NBCUniversal CEO Jeff Shell doubled down on his previous comments to The Wall Street Journal after Universal Pictures animated feature film, Trolls World Tour, generated $100 million in PVOD sales.

Speaking April 29 on the Comcast fiscal call, Shell said PVOD would continue as a “complementary offer” to consumers when theaters re-open to the public — and consumers attend.

He said the Trolls had been primed and marketed for a March 20 theatrical bow, and when the coronavirus shut down theaters, going direct-to-consumer on April 10 with a “desperately” needed children’s title during the pandemic was the only option.

“The majority of our movies, whether we like it or not, are being consumed at home,” Shell said. “It’s not realistic to assume that we’re not going to change, that this part of the business isn’t going to change like all parts of the business are going to change.”

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The executive said it remains to be seen what the distribution model will look like post-COVID-19. While he expects a gradual return to the cineplex, which he said Universal would be part of, he also expects PVOD to be a part of the business model.

“[PVOD is] not a replacement,” Shell said. “We’re just going to have to see how long [a return to theatrical] takes and where it takes us.”

AMC Theatres, trade group National Association of Theatre Owners and Regal Cinemas have blasted Universal for pledging to bypass the traditional 90-day theatrical window. Both exhibitors have said they would not distribute any Universal — or other studio — title earmarked for simultaneous in-home digital release.

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With the exception of Georgia and Texas, movie theaters in most states remain shuttered due to the coronavirus. The industry and studios are projected to lose billions in box office revenue to the shutdowns.

Comcast CFO Michael Cavanagh said future PVOD releases would be determined on a “title-by-title” basis.

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.”