Cineworld to file for bankruptcy
Cineworld Group plc, the world’s second largest cinema chain and owner of Regal Cinemas and Picturehouse, is set to file for bankruptcy.
According to a report by The Wall Street Journalthe London-based chain which has 9,518 screens at 790 locations in 10 countries contacted lawyers from Kirkland & Ellis LLP and consultants from AlixPartners to file for bankruptcy, risking around 28,000 jobs.
According to statements for the financial year ending April 2022, Cineworld Group plc ran up £4 billion in debt, with the company blaming UK and overseas cinema closures, as well as a post- less than stellar lockdown. successful line-up, as the main reasons for their dramatic decline.
The company, which owns Cineworld Cinemas and Picturehouse in the UK, as well as Regal Cinemas in the US, has in recent years been ordered by the courts to pay settlements totaling nearly £1billion (according to Sky News) – £141m to disgruntled Regal shareholders; £720million after refusing to complete its takeover of Canadian chain Cineplex as the pandemic hit.
The Cineworld Group bought Regal in 2017 for $3.6bn (around £3bn) and bought independent cinema chain Picturehouse in 2012 for £47.3m.
Cinemas have been closed across the UK for almost a year during the COVID-19 shutdowns, with a brief reopening in the summer and autumn of 2020 when the box office recorded its highest figures low for decades due to a low number of theatrical releases and even fewer big-name blockbusters. In the United States, cinemas were forced to close even longer in some states as governments tried to limit the effects of the pandemic.
The box office made a strong comeback in the final months of 2021, with releases like no time to die ($774 million), Venom: let there be carnage ($507 million) and in particular Spider-Man: No Coming Home ($1.9 billion) amassing astronomical totals that had many declaring the theatrical experience a successful return. Despite massive successes in 2022, such as The Batman ($771 million), Doctor Strange in the Multiverse of Madness ($955 million) and Top Gun: Maverick ($1.38 billion), the box office has yet to recover to pre-pandemic levels, with the average of 2022 releases in the UK, North America and globally still lagging figures from 2019.
The biggest declines in attendance have come through screenings of smaller and often independent films, the likes of which usually have a large role to play in the market as small revenue streams that can fill smaller screens. Likewise, family movies have suffered in the post-pandemic landscape with Ghostbusters: Afterlife and Minions: The Rise of Gru being notable exceptions that prove the new rule, the likes of Disney Pixar Light year even struggled to break even during its box office run. Home movies were often strong mid-week earners, especially during the holidays, and often invited the profitable family market that would buy confectionery (a major profit driver for any movie theater or movie chain).
Another factor that can be said to have contributed to the downfall of one of the institutions of the theater experience is the change in direction that each of the major film studios decided to take at the time of the closures. Many studios, including Warner Bros. and Walt Disney Pictures, have reduced the theatrical window (the period during which a film will be exclusive to theaters before being sold digitally, streaming, etc.) quite dramatically, leaving in some cases as little as 45 days between theatrical release and streaming debut. At the height of the pandemic, many releases were daily, meaning they were streaming and in theaters on the same day.
In addition, government support for the arts and entertainment industries in the UK and North America was considered by industry experts to be too low, the film industry as a whole (from creation to exhibition ) being overlooked even within this funding category.
Finally, theatrical releases of major blockbusters have been delayed by many studios until after the pandemic, and as such a number of potentially monumental releases have been pushed back further and further, Paramount star Tom Cruise Mission: Impossible 7 being delayed until 2023 despite an initial release date of 2020.
One of the main benefactors of a strong cinema territory, Cineworld Group plc will undoubtedly leave a huge hole in the landscape of cinema and film exhibition in the UK and beyond. Their upcoming bankruptcy and resulting job losses could have a catastrophic domino effect on the film industry, on our pockets as streaming service prices explode in response, and on our culture at large as people find themselves out of work during one of the most trying financial crises. eras of history.
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