Cineworld Reports 80 Percent Year-On-Year Admissions and Revenue Drop in 2020 as they Prepare for Regal Reopening

Regal's Union Square location in Manhattan. Image courtesy Regal.

Following Cineworld’s announcement last week as to their reopening timeline in the U.S. and their multi-year deal with Warner Bros. for a shortened theatrical window, CEO Mooky Greidinger expanded on the multi-national circuit’s 2020 performance and plans for the chain moving forward in a Q4 2020 earnings call. 

Admissions and revenue both fell 80 percent year-on-year compared to 2019, figures affected by the ongoing pandemic, a shortage of major studio releases, and Cineworld/Regal’s decision to keep their theaters closed through the bulk of 2020, aside from the pre-Covid early months and a brief stint in autumn surrounding the release of Tenet.  

Said Nisan Cohen, CFO of Cineworld: “If you look on the adjusted EBITDA, the IAS 17, which includes also the rent expense, the adjusted EBITDA is negative $650 million. The free cash flow…  was almost a negative of $700 million. Our net debt grew by $1 billion to $4.5 billion.”

On the positive side, Greidinger notes that “We have secured over $800 million additional liquidity” in addition to announcing “an additional $213 million in convert bonds that will help us to be in a good shape and liquid enough through the time which is ahead of us.” Cohen also noted that they expect to receive money from the U.S. government’s CARES act “in the next three weeks,” which—added to the convertible bond—gives the chain “pro forma liquidity of $732 million.” Of financial benefit to the company moving forward is the closure of 20 underperforming sites since the onset of the pandemic.

On the call, Greidinger reiterated that Cineworld’s U.S. Regal locations will begin opening on April 2, estimating that it would be “about five, maybe six weeks until we’ll be fully operational.” In the U.K., the tentative date for indoor cinemas being allowed to reopen remains May 17. Subject to government restrictions, Greidinger said he expects that Cineworld locations in Israel and Central Europe will be able to open in late April and May, respectively. 

During Regal’s period of closure, the company underwent renovations on select locations, including theaters in Irvine, California; Pinnacle, Tennessee; University Town, California; and Union Square, New York City, where three more screens were added to the former 14-plex. The chain also looking forward opening a new-build theater in Benders Landing, Texas. 

When Regal cinemas do reopen, they will do so under vastly different circumstances than when they closed when it comes to evolving theatrical windows. Paramount has announced their intention for a 30-45 window on major titles, while Universal has struck deals with AMC, Cineplex, and Cinemark for a shortened window of their own—as little as 17 days for specialty titles, with major releases getting a longer period of theatrical exclusivity. Warner Bros. has opted to go day-and-date with their 2021 slate, while Disney continues to make release decisions for their upcoming titles on a film-by-film basis.

Regal, as announced last week, has become the first chain to ink a deal with Warner Bros. for a shorter window in the 2022 post-pandemic period. Speaking of Cineworld’s negotiations with studios around the future of theatrical exclusivity, Greidinger noted that “things that were good for June were not good for September, and things that were good for September were not good anymore at December. But I think that the dialogue is good. And you’ve all seen our Warner deal… which we think is a very important step forward. We trust and believe that at the end of the day, the theatrical exclusivity is of the interest of both sides, exhibition and studios and movie makers.” 

Greidinger also noted that Cineworld is “working with Universal on an agreement that will also cover international,” though they don’t “have a deal with Universal yet—but that doesn’t mean that we are not showing their movies. The 17 days for smaller movies and the 31 days for the bigger movies from premium VOD for the Universal window is a given at this stage.” Greidinger added that he expected agreements with Universal and “other studios” to be reached in the coming weeks, “and we’ll see how this will go.”

With a strong slate moving into the back half of 2021 and on into 2022, Greidinger expressed the opinion that the industry will reach 2019 levels in 2022—”maybe a little less, maybe a little more. Subject to the movies, of course. At the end of the day, as long as theatrical exclusivity is kept in a way… people will still run to the movies in the cinemas.”

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