World’s Second Biggest Theater Chain Is Shutting Down Cinemas
Regal has now shut down 12 of its theaters across the United States, because of the bankruptcy filed for the company.
Regal Cinemas’ parent company, Cineworld, is closing down theater locations as part of an ongoing Chapter 11 bankruptcy filing, according to Deadline. 12 theaters across the country, out of a total of 542, will be shut down as the company wades through financial difficulties brought about by Covid-19 closures. The move is based on projections that the theater industry won’t return to pre-pandemic income until at least 2025.
Many of the Regal Cinemas locations were run down, such as the Anaheim 14 in Anaheim, California. Others simply grew too expensive as leases rose as a result of deferred rent payments during the pandemic closures. Cineworld has sought to reject these leases as part of their Chapter 11 filing.
Theater costs for Cineworld and its competitors also include payments to studios for their movies and vendors, such as food vendors, game machines, and employee salaries, all essential to Regal Cinemas’ theater operations. These debts will be paid first by the Chapter 11 agreement, and Cineworld has been allotted $785 million to make these ongoing payments.
This combination of expenses has been the result of closures throughout 2020. Although the chain reopened in August 2020 to show the movie Tenet, delays in most movie productions and enforced social distancing measures meant there was no supply of movies to show, and theaters could only fill to half capacity. This affected all theaters in addition to Regal Cinemas, but Cineworld chose to wait until pandemic restrictions were lifted because all chains were in a bind, making the process a little easier now than it would have been in 2020.
The online exhibition of new releases has also played a major role in theater attendance and the trouble for Regal Cinemas. During the pandemic, new releases were shown on streaming services and helped bring in subscriptions to new platforms like HBO Max and Disney+. Many viewers are still watching new releases at home rather than going to the theater because of ongoing Covid concerns, ticket and venue costs, and the convenience of being able to watch from home.
Going to the movie theater is an experience of its own, however, and projections do show hope for the future of the theater experience. Blockbusters this year such as Top Gun: Maverick and Doctor Strange in the Multiverse of Madness have put people in the seats, which has brought encouraging figures to Regal Cinemas’ bottom line for the quarter ending June 30. This hints at a light at the end of a long, pandemic-induced tunnel, but Chapter 11 was still necessary to ensure the theater company can sustain itself until then.
The Regal Cinemas that are closing are located in several states, including Texas, North Carolina, Cleveland, Ohio, and Philadelphia, as well as five in California. Calabasas Stadium 6, located in the Los Angeles area, might see another company, AMC, take over the lease. This speculation is based on an existing relationship between AMC and the Calabasas Stadium landlord.
Cineworld is the second-largest theater company in the world, behind only AMC, so these closures are significant in an industry still recovering from the pandemic. The damage is already done, but with the help of the Chapter 11 filing, Regal Cinemas is hopefully on the road to recovery alongside the people who their theaters entertain.
