Regal Cinemas considers bankruptcy as fewer blockbusters hit screens (AMC’s feeling it too)
Cue the scary music… The theater industry’s dealing with a nightmare fit for a horror flick. Regal Cinemas owner Cineworld, the world’s second-biggest theater chain, confirmed yesterday that it plans to file for bankruptcy, as first reported by WSJ. Cineworld shares plunged nearly 34%.
- The show must go on: Cineworld hopes to lighten its $5B debt load by filing for bankruptcy. For now the company says Regal Cinemas will remain open.
- Popcorn IOU: AMC, the biggest theater chain, also faces at least $5B in debt. AMC has raised billions from retail investors to stay afloat. But its stock plunged 42% yesterday after it issued new meme-inspired “APE” shares to raise cash.
Slowdown in Tinseltown… Despite rising movie attendance and a few big summer blockbusters (ahem, “Top Gun: Maverick”), industry-wide box-office sales are still 30% lower than prepandemic. The problem: Hollywood studios are churning out fewer films as supply issues and inflation cut into budgets. They’re releasing more films to streaming to save $$. Cineworld blamed emptier-than-expected theaters on the lack of fresh flicks:
- 40% fewer movies have hit theaters this year than in 2019. Experts don’t expect another blockbuster until “Black Panther: Wakanda Forever” debuts in November.
- Same screens: The overall number of theaters hasn’t changed much since prepandemic, which means theaters are still paying to keep lots of lights on.
When pickings are slim, old winners get picked… Analysts expect the US box office to close the year with $7B in ticket sales, roughly two-thirds of prepandemic levels. Now movie giants like Disney and Sony plan to rerelease hits like “Rogue One” and “Avatar” in domestic theaters to keep the popcorn popping — and to promote franchise sequels.