Regal Cinemas Owner Upbeat on October Box Office, Moviegoer Trends

Cineworld, corporate parent of Regal Cinemas, the second-largest movie theater operator in the U.S., Nov. 15 disclosed that October box office revenue approached 90% of pre-pandemic levels in 2019. The U.K.-based company did not release full quarterly results.

CEO Mooky Greidinger, in a media statement, said movies such as MGM’s latest James Bond actioner, No Time to Die, along with Sony Pictures’ Venom: Let There Be Carnage, Warner Bros.’ Dune, and Disney/Marvel’s Black Widow and Shang-Chi and the Legend of the Ten Rings, contributed to a 127% uptick in October revenue compared with 2019.

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“We are thrilled to see audiences returning in significant numbers,” Greidinger said. “Our partnerships with the studios are as strong as ever and with the incredible movie slate to come, there are real grounds for optimism in our industry.”

The executive said the winter box office portends ongoing improvement in the exhibition business as moviegoers return to the big screen, especially in the United States, where Regal has revamped theaters to include luxury seating and enhanced safety protocols. This comes after Regal largely shuttered operations during much of the pandemic.

The company was able to secure $400 million in new long-term debt, in addition to getting $203 million in U.S. government pandemic relief funds. Cineworld shuttered 12 underperforming theaters, while securing rental relief from many landlords.

“These new [revamped] cinemas clearly support our strategy to enhance the cinema experience for all our customers,” Greidinger said. “I am really proud of the extraordinary efforts that everybody in the business has made to manage this company during an unprecedented time. Whilst there are challenges ahead, I believe these efforts have positioned us for great success in the future.”

The near future could see increased challenges, according to main rival AMC Theatres, whose CEO Adam Aron warned last week that pending colder temperatures and arrival of the flu season could impact the exhibition business.

“We wish to emphasize that no one should have any illusions that there is not more challenge ahead of us still to be met,” Aron said. “The virus continues to be with us, we need to sell more tickets in future quarters than we did in the most recent quarter.”

The executive’s comments came just days after he cashed out $25 million worth of stock options as part of an expedited personal estate plan.

Regal Cinemas Owner Posts $209 Million Operating Loss in First Half of Year

Cineworld Group, corporate parent of Regal Cinemas and owner of more than 9,000 theatrical screens worldwide, Aug. 12 disclosed an operating loss of $209 million through the first six months of the fiscal year. That compared with a first-half loss of $1.34 billion in 2020, during the height of the pandemic.

The chain anticipates a strong fourth quarter supported by a robust film slate and pent-up demand for affordable out-of-home entertainment, subject to the COVID-19 situation, according to CEO Mooky Greidinger.

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“Despite the challenges, the actions we have taken have ensured that Cineworld has emerged a more focused business with significant liquidity and a clear vision for the future,” Greidinger said in a statement. “Cineworld is in the position it is today thanks to the great dedication and commitment of the Cineworld team around the world, and I sincerely thank each and every member of the team for their loyalty and contribution.”

With few new studio releases during the pandemic, Regal effectively ceased operations for much of 2020 and into 2021, with Cineworld cutting more than 45,000 jobs worldwide.

“We are like a kind of a grocery shop that [has] no food to sell,” Greidinger said last October.

Regal Parent, Disney Reportedly Agree to Theatrical Window Deal

On the heels of its theatrical distribution deal with Universal Pictures, Cineworld, corporate parent of No. 2 exhibitor Regal, reportedly has ironed out an agreement with the Walt Disney Co. That would be Cineworld’s third distribution deal in the COVID-19 era when including a previous agreement with Warner Bros. Pictures.

The Disney deal is expected to mirror Universal’s, which affords the studio expedited access to direct-to-consumer distribution, i.e. premium VOD, depending on a film’s box office. If a movie generates $50 million or less in ticket sales, the studio has the right to release it digitally within 17 days of theatrical debut. If the box office exceeds $50 million, the exhibitor’s window expands to 31 days — 45 days in the United Kingdom.

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While Disney’s upcoming movies Cruella, Luca, Black Widow and Jungle Cruise all have either hybrid Premier Access/theatrical or Disney+ distribution, the media giant is debuting 20th Century Studios’ Free Guy and Marvel Studios’ action-adventure Shang-Chi and the Legend of the Ten Rings with 45-day exclusive windows on Aug. 13 and Sept. 3, respectively.

Regal Owner, Universal Pictures Ink Shortened Theatrical Window Pact

Cineworld, corporate parent of No. 2 exhibitor Regal Cinemas, May 13 signed a shortened theatrical window deal with Universal Pictures that affords the exhibitor a share of revenue from premium VOD distribution.

The pact is similar to Universal’s deal with AMC Theatres and Cinemark that grants the exhibitor exclusive 17-day screening of movies. If the title generates less than $50 million at the box office, Universal can offer it into homes for a $19.99 digital rental (PVOD). If the box office exceeds $50 million, the theatrical window is extended to 31 days.

Regal has a separate agreement with Warner Bros., affording the exhibitor a 45-day window beginning with the studio’s 2022 theatrical slate.

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Regal Re-Opening in April, Signs 45-Day Window With Warner Beginning in 2022

Cineworld Group, corporate parent of No. 2 exhibitor Regal Cinemas, March 23 announced that its screens would re-open in April — the first time in six months. The phased re-opening will kick off with a limited number of cinemas opening April 2 for Godzilla vs. Kong and going wider on April 16 with Mortal Kombat. Cineworld also plans to re-open in the United Kingdom, its second biggest market, in May, in line with current government guidance.

“We have long awaited this moment when we can welcome audiences back to our Regal theaters and restore our essential role within the communities we serve,” CEO Mooky Greidinger said in a statement. “We continue to take all the necessary precautions and abide by our CinemaSafe guidelines to confidently provide a safe and comfortable experience. With capacity restrictions expanding to 50% or more across most U.S. states, we will be able to operate profitably in our biggest markets. We will also be monitoring developments closely in the U.K. and across Europe as we set to gradually reopen across the world in line with local government guidance.”

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In addition, Cineworld reached a multiyear agreement under which films from Warner Bros. Pictures will be exhibited at Regal screens in the United States when they open, in addition to streaming on HBO Max. The exhibitor will allow for Warner’s concurrent theatrical/Max distribution for the remainder of 2021. Beginning next year, Warner theatrical releases will have a 45-day window of theatrical exclusivity, with certain provisions.

As for the United Kingdom, Warner and Cineworld agreed to an exclusive theatrical window of 31 days prior to PVOD, and an extended window of 45 days for films that open to an agreed upon box-office threshold.

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By comparison, AMC Theatres struck deals with Warner and Universal Pictures adhering to WarnerMedia’s concurrent Max release strategy, while affording Universal a 17-day window with revenue-sharing on select titles based on box office.

“This agreement shows the studio’s commitment to the theatrical business, and we see this as an important milestone in our 100-year relationship with Warner Bros.,” Greidinger said, adding that the U.S. market represents 75% of Cineworld’s business.

“We are great believers in the theatrical experience, which only a year ago [2019] generated $43 billion in revenue worldwide,” he said.

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 (at least three weekends) 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 theaters 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 coronavirus 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.

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.”