Cinemark Provides More Detail On Their “Dynamic Theatrical Window” Deal with Universal, Responds to M&A Rumors

Photo Courtesy Cinemark Theatres

In a pair of recent conferences, executives from Cinemark have provided more details with how the chain will interact with Universal and Warner Bros. moving forward with regards to the studios’ respective strategies of shortening the theatrical exclusivity window.

In the case of Universal, in November Cinemark announced that they have struck a deal with the studio under which Universal and Focus Features titles are able to screen at Cinemark under a shortened theatrical exclusivity window. Specifically, under Cinemark’s “Dynamic Window” plan, Universal and Focus films that open to more than $50M at the domestic box office will have 31 days, or five weekends, of exclusivity. Films that open under that mark will be granted theatrical exclusivity of 17 days, or three weekends.

Speaking in a virtual conference call with industry group Women in Exhibition, Cinemark CEO Mark Zoradi clarified that the $50M hurdle is not set in stone. Certain movies, he noted, will be “pre-designated” to receive a five-weekend window, regardless of their opening weekend gross. Details of any specific upcoming movies that have been “pre-designated” for a 31-day theatrical window were not discussed, though on a December 16 MKM Virtual Investor Conference call Zoradi noted that the window for Universal’s “big pictures” will be 31 days at a minimum.

“I think that Universal, on their big movies, will actually play a lot longer than 31 days,” continued Zoradi at the WIE event. “So the concept that we’re talking to all the studios about is: one size window doesn’t fit every particular movie. So on the smaller movies, we can agree to those windows being shorter. On the big blockbuster, tentpole movies, we’re looking for a longer, extended window in kind of a dynamic range.”

On the MKM call, Zoradi responded to Warner Bros. shifting its entire 2021 theatrical slate to a day-and-date release, building on Cinemark’s earlier statement. “The truth is that Warner Brothers made a pretty shocking announcement to the industry,” said Zoradi. “We got some indication that they were thinking about this—obviously we made it known that we didn’t support a day and date scenario with HBOMax… There is no question that Warner Bros.’ move here was a primarily motivated by wanting to prop up HBOMax and get their subscribers in a much better situation. They said that publicly, and I think that is absolutely the motivating factor for them. “

While “we were very happy with the licensing terms” laid out for Wonder Woman 1984, noted Zoradi, when it comes to Warner Bros.’ 2021 releases “we’re going to take it movie by movie.” Negotiations with Warner Bros. will cover “not just the number of days. It’s the film rental terms. It’s the commitment to how long you’ll play. It’s to, ‘What big screens are you going to be on?’ It’s to, ‘Are you going to share that show schedule during the week, or is it going to be exclusive to the movie?’ ‘What is the per cap going to be on that particular movie?’ There’s a variety of terms that need to be negotiated [with] Warner Bros. on a movie-by-movie basis as we move into 2021.”

Finally, in the MKM call CFO and COO Sean Gamble spoke to whether Cinemark has plans to acquire other cinemas or circuits, referencing a recent rumor published in the New York Post that the chain “is angling to move in on AMC Entertainment’s turf” by taking over struggling AMC locations. On the general subject of pursuing M&As, Gamble noted that “we are going to be very careful in taking the cash that we have on hand—of which we have plenty—and risking it with acquisitions, where we’re not certain what that particular outlet is going to do in a post-pandemic environment.”

“We know there are going to be opportunities,” Gamble continued, “but we’re going to let those opportunities play themselves out a little bit before we jump into the fray… So I don’t want to say that M&A is not a potential in the future, because it potentially could be. But it’s not something that we’re actively doing as we speak, right now.”

Photo Courtesy Cinemark Theatres

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