The Second-Biggest Theater Chain In The World Is Bankrupt
The movie theater company Cineworld, which owns Regal Cinemas, is heading to bankruptcy. They own the second-most movie theaters in the world.
Movie theaters were absolutely crippled by Covid-19. Theater chains like AMC and Cinemark were forced to close some locations for a long stretch of time during the pandemic, and those that were able to continue operating were required to limit seating to 50% capacity to enforce social distancing between moviegoers. Things got so bad for AMC Entertainment that the company predicted it would run out of money by the end of 2020. Luckily, the chain was able to avoid bankruptcy thanks to a $917 million infusion of cash. Unfortunately, Cineworld, which is the parent company of Regal Cinemas, wasn’t so lucky.
According to CNN News, Cineworld Group has filed for Chapter 11 Bankruptcy. The British company, which is based in London, England, is the second largest movie theater chain in the world. They operate in 10 countries with a total of 747 sites and approximately 9,139 screens around the globe.
In October 2020, Cineworld temporarily closed theaters in Ireland, the United Kingdom, and the United States due to the impact of Covid-19 which caused a delay in tentpole films. Although the release of blockbuster features including No Time to Die and Spider-Man: No Way Home helped boost the company’s global revenue levels nearly 100% over those in 2019, the damage from the ongoing pandemic was already done. In fact, the company warned last month that it was seriously considering a Chapter 11 filing as a way to reduce its debt. Now, it appears the voluntary filing of Chapter 11 is the route the company has chosen to take as it recently filed in U.S. Bankruptcy Court for the Southern District of Texas.
Cineworld expects to come out of Chapter 11 in the first part of 2023, and they are confident the decision will strengthen their balance sheet and give the company flexibility to accelerate. Additionally, the company plans to close or sell some theaters as well as negotiate with US landlords to hopefully improve lease terms for cinemas.
During the Covid-19 Pandemic, CNN News reports that Cineworld lost approximately $2.7 billion in 2020 and $566 million in 2021. Although the theater chain has seen huge improvements in revenue, the figures are nowhere near what they were prior to the Coronavirus wreaking havoc around the world. Fortunately, the company’s recent Chapter 11 filing has extended its lifeline. Cineworld plans to operate its global business and cinemas, which includes Regal Cinemas, Picture House and Planet, and Cinema City, as usual without any interruption during the process. The company will also honor customer membership programs like Regal Crown Club, Regal Unlimited, and Cineworld Unlimited.
Founded by Steve Wiener in 1995, Cineworld opened its first cinema in Stevenage, Hertfordshire the following year. The company began merger talks with Regal Cinemas in November 2017, and it was officially announced a month later that Cineworld would buy the chain for $3.6 billion, creating the world’s second-largest theater group. Hopefully, the company’s recent Chapter 11 filing will allow it to continue operating as one of the most recognized names in cinema.