The third-largest movie theatre company in the world, Cineworld Group plc, which operates 505 Regal theatres around the U.S., is getting ready to declare bankruptcy here.
Since reopening theatres in 2021, the U.K.-based firm said it had lost money owing to low attendance and a lack of movie production.
According to a report by The Hollywood Reporter, Cineworld Group had a net debt of $5 billion by the end of 2021 as the U.S. box office tried to recoup from losses incurred during the pandemic after battling its way back from the brink of bankruptcy in 2020 with assistance from creditors.
Thanks to successful results from films like Top Gun: Maverick, which earned $676 million in the United States and over $1 billion worldwide, and Doctor Strange In The Multiverse Of Madness, which brought in $411.3 million, 2022 has had some box office success. Both were made available in May.
Despite the promising beginning, momentum is anticipated to slow down as the year comes to a close. The lack of anticipated blockbuster films, according to Cineworld, is to blame.
The firm said in a statement that it projected a decline in ticket sales because of a “limited film slate” that “is likely to severely affect trade and the group’s liquidity in the short term” and “is anticipated to persist until November 2022.”
Regal’s success from 2021, when the theatre company recorded a 123 percent rise in box office revenue from 2020, did not continue into 2022. Despite the rise, only a tiny portion of admissions before to the pandemic were covered by the $627 million in income.
Due of the pandemic, Cineworld closed all of its locations globally and put around 5,500 employees on leave.
From 30 million in 2020, the total number of theatre admissions increased to 56 million in 2021. Admissions reached 177 million in 2019.
As of August 19, the price of Cineworld’s shares, which began trading on March 4 at $1.90, was as low as 11 cents. This represents a 94% reduction.
Before the pandemic, in the autumn of 2019, the stock was trading at an all-time high of $8.40. The decrease during the last three years has decreased by 98%.
The US accounts for 68% of the company’s total global revenue, compared to 19% from the UK and Ireland and 13% from the rest of the globe.
Major movies like “Avatar 2” and “Avatar 3,” which were supposed to have in theatres by now, are still on hold.
Additionally, much-awaited action thrillers like the most recent James Bond movie and “Top Gun: Maverick” suffered significant delays.
After being postponed from June 2020 by almost two years, “Top Gun: Maverick” was finally published in May of this year.
A growth in streaming viewership may also be contributing to Cineworld’s declining admission revenues.
In July, viewing of shows on platforms like Netflix, Hulu, and Prime Video topped that of cable TV for the first time ever.
With almost a third of American viewers using streaming, this statistic is the first time that streaming has surpassed cable in US watching patterns.
According to a press release from the ratings firm Nielsen, streaming services garnered 34.8 percent of all US television viewership, while cable managed 34.4 percent.
The number of viewers climbed by 23% over the prior year, but cable dropped by 9%.
Netflix, for example, acquired an 8% market share despite its recent problems with bleeding users (it lost a million subscribers this year alone).
Virgin River and The Umbrella Academy’s combined viewership of around 11 billion minutes and the approximately 18 billion minutes of Stranger Things watching increased the show’s success.
The choices being made by certain providers, like WarnerBros, might help movie theatres. HBO Max-Discover+ will not promote blockbuster films via streaming, according to Discovery.
The recent move by HBO’s CEO David Zaslav to fire 70 staff is a result of the company’s “strategic change” toward a more theatrical emphasis.
Due to this new approach, the studio recently decided not to distribute the $90 million movie “Batgirl,” along with “Wonder Twins” and “Scoob! : Holiday Haunt.”
When bringing theatrical films to HBO Max, the corporation, Zaslav said, “will focus on theatrical, and we feel they have much higher value.”