On Friday, The Wall Street Journal reported that Cineworld Group is preparing to file for bankruptcy in an attempt to reestablish a sound and sustainable foundation for future operations. U.K.-based Cineworld is the world’s second-largest theatre chain, operating in the U.S. as Regal Cinemas. Cineworld is saddled with more than $5B in debt, a number that ballooned over the last two years while struggling with the impact of the pandemic on moviegoing.
More recently, company execs have warned of a decline in box office revenues “due to a limited film slate that is anticipated to continue until November 2022.” In addition, a Canadian court recently ordered Cineworld to pay a $1B legal penalty to Cineplex, Canada’s largest exhibitor, as a result of an aborted merger that was announced in 2019 with much fanfare but terminated in 2020 with dubious justification.
The North American box office is expected to reach $7B in 2022, down more than 30% from the high water mark of 2019. While the pandemic has created enormous challenges for exhibitors, most Hollywood studios are once again touting the essential role of theatrical releases in the success of the industry.
See also: Cineworld needed AMC’s apes (Reuters)