The Biggest Movie Theater Advertiser Just Filed For Bankruptcy, Theaters Next?

National CineMedia recently filed for Chapter 11 bankruptcy.

By Phillip Moyer | Published

movie theater feature

While the unparalleled success of The Super Mario Bros. Movie proved that people are still willing to go to theaters despite the epidemic of superhero fatigue, that doesn’t mean that business is exactly booming. In fact, The Hollywood Reporter has announced that National CineMedia, the largest cinema advertising network in America, has fallen on hard times amid the current unpredictable market and filed for Chapter 11 bankruptcy this week. The company was centered around the idea that you can’t skip ads in a theater, though it appears that undeniable (if annoying) fact hasn’t helped the company stay afloat.

This announcement of bankruptcy comes after National CineMedia was unable to make an interest payment two months ago, and found itself unable to pay even after the grace period for the payment was extended multiple times. The company states that it has between $1 billion and $10 billion in debt while only having between $500 million and $1 billion in assets. 

Chapter 11 bankruptcy doesn’t mean that National CineMedia is going away, however. This type of bankruptcy usually involves reorganizing a company to allow it to continue operating while paying its debts. The company states that it hopes not to disrupt its operations when emerging from bankruptcy.

You’ve no doubt seen an advertisement from National CineMedia if you’ve ever walked into a movie theater before the previews rolled. If you’ve ever seen the movie pre-show called “Noovie” which features ads for upcoming films, trivia, and those weird augmented reality games that almost nobody plays, then you’re familiar with their biggest product. 

National CineMedia is also responsible for Fathom Events, a content provider that plays old movies and alternative entertainment in theaters owned by AMC Theatres, Cinemark Theatres, and Regal Cinema. They’re responsible for the upcoming theatrical re-release of The Big Lebowski, regularly bringing Studio Ghibli films back to theaters, and this year’s celebratory 20th-anniversary run of The Lord of the Rings: Return of the King Extended Edition. Fathom Events hosts stage plays, live streams of The Metropolitan Opera, religious releases, and more.

National CineMedia isn’t the only company in the cinema industry that had to file for Chapter 11 Bankruptcy. Cineworld, the company that owns Regal Cinemas, filed for bankruptcy in September 2022. Cineworld is looking to emerge from bankruptcy sometime this year, but it’s also looking for a buyer to purchase the beleaguered company.

National CineMedia

While both National CineMedia and Cineworld going bankrupt might just be a temporary stumble for a long-lasting industry, it’s possible that it’s a harbinger of things to come. While 2023 has so far been the best year for cinemas since the pandemic practically shut the industry down in 2020, the box office returns are still 23 percent lower than those seen during 2019, and a full 48 percent lower than in 2018. It’s no surprise to see the industry struggling with numbers that abysmal.

It remains to be seen whether National CineMedia, Cineworld, and all the rest of the industry recover from the current setbacks — or whether we’ll soon see movie theaters close across the country as the industry proves to no longer be profitable.