Struggling Cineworld paints bleak picture for cinemas

Low cinema attendance and a lack of blockbuster movies has left a gaping hole in its finances.
Struggling Cineworld paints bleak picture for cinemas

Cineworld said numbers going to the cinema will remain below pre-crisis levels in the next couple of years.

Cineworld painted a bleak picture for cinema operators, forecasting admissions would remain below pre-pandemic levels in the next two years as the Regal chain owner tries to fix its finances under bankruptcy protection.

The British chain, which also has cinemas in Ireland, forecasted that admissions would remain below pre-health crisis levels for the next two years.

The world’s second largest movie theatre operator behind AMC Entertainment filed for US bankruptcy protection earlier this month to try and restructure its debt and strengthen its balance sheet. Low cinema attendance and a lack of blockbuster movies has left a gaping hole in its finances.

While third-quarter admissions were below expectations, the company expects stronger admissions in the fourth with the release of big-budget movies.

Cineworld said numbers going to the cinema will remain below pre-crisis levels in the next couple of years as fewer mid-sized films are expected to release on the big screen. But while the industry struggles, Cineworld's specific issue is the amount of debt it has amassed.

Admissions in the period were nearly 83 million, about 61% of pre-pandemic levels. However, ticket prices and the amount spent per person in theatres surpassed 2019 levels. It took on debt to fund its $3.6bn (€3.6bn) purchase of Regal Entertainment in 2017, and more to survive the health crisis.

Cineworld also faces damage claims after it scrapped a $1.6bn (€1.6bn) takeover of Canada's Cineplex. Lenders have given the company access to $785m (€801m) of $1.9bn (€1.9bn) debtor-in-possession financing as part of the bankruptcy protection.

Cineworld has also faced discontent from shareholders over executive pay in 2021, including bonuses to chief executive Mooky Greidinger and his brother and deputy chief Israel.

Reuters

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