National Cinemedia, the world’s largest provider of cinema advertising services filed for bankruptcy this week. It chose to use the same U.S. Federal Bankruptcy Court in Texas that is overseeing the Chapter 11 filing of Cineworld.
According to the filing, the company has assets in the range of $500M-$1B and liabilities of $1B-$10B. Much of this debt is linked to agreements between NCM and its exhibitor partners, including guaranteed minimum payments under long-term contracts.
NCM provides in-theatre advertising and entertainment programs at approximately 1500 theatre locations around the U.S. Major U.S. exhibitors AMC, Regal, and Cinemark created the company in 2005 to provide these services to their theatres and produce valuable income for their businesses.
Business was booming until the COVID-19 pandemic hit in early 2020 and moviegoing collapsed, causing advertisers to pull back from advertising. While moviegoing is now in full recovery and in-theatre advertising is following, the overhang of NCM’s accrued debts and ongoing obligations to their exhibitor partners have proven difficult to manage.