The world’s second-largest cinema chain will close its United Kingdom and United States movie theatres this week as it fights a coronavirus-related collapse in film releases and cinema-going.
Cineworld said the reluctance of studios to go ahead with major releases such as the new James Bond film had left it with no choice but to close all 536 Regal theatres in the US and its 127 Cineworld and Picturehouse theatres in the UK beginning on October 8, leaving as many as 45,000 workers unemployed.
Cineworld Chief Executive Mooky Greidinger told Sky News that the operations might resume in “two months, or a bit longer”. Movies including the superhero sequel Wonder Woman 1984 are slated for a Christmas Day or December 25 release.
“From a liquidity point of view, we were bleeding much bigger amounts when we are open than when we were closed,” Greidinger said.
Cineworld’s statement on Monday, confirming leaks over the weekend, spelled out the scale of job losses from its move, which affects thousands of its own employees as well as ancillary staff such as cleaners and security guards.
Shares fell as much as 60 percent to an all-time low within 10 minutes of the opening bell on Monday as the group – carrying heavy debt due, in part, to its acquisition of Regal in 2018 – said it was looking at all ways to raise additional funds.
As the day continued, Cineworld shares were 30 percent lower, taking their loss this year to more than 90 percent.
Cineworld’s statement follows a grim evaluation by ratings agency S&P on Friday of rival AMC Entertainment, which said the US-based group may run out of liquidity in six months unless it can raise more capital. AMC is the owner of the Odeon cinema chain.
The entertainment industry has been among the heaviest hit by social distancing and other restrictions, with Walt Disney last week announcing plans to lay off roughly 28,000 employees, mostly at its US theme parks.
Cineworld began reopening in July after virus-related restrictions started to ease, but the further postponement of the James Bond film No Time to Die and others, such as Marvel’s Black Widow, have left the months ahead looking bleak.
“Without these new releases, Cineworld cannot provide customers in both the US and the UK … with the breadth of strong commercial films necessary for them to consider coming back to theatres,” the company said.
While some cinemas in China, the world’s second-largest movie market, have reopened with strong audiences, there is a lack of major movies to watch on the big screen.
Studios have chosen to release some of this year’s major planned blockbusters on Netflix or the Disney Plus streaming platform, and have postponed others until 2021.
“Our problem right now is we have no movies, and this was a big blow for us,” Tim Richards, the boss of rival chain Vue Cinemas, told BBC Radio.
“We are likely going to make it through. I’m concerned about the independents and the small regional operators right now that are going to really struggle, and when they close, they may not reopen,” he added.
The UK has slid into a fresh round of lockdowns and tightened social restrictions over the past month.
“Although the delay of the latest 007 blockbuster prompted the decision, Bond isn’t the villain in this piece,” Hargreaves Lansdown analyst Susannah Streeter said.
“The spread of COVID-19 around the world has been a horror movie for the industry and the fresh wave of infections is the latest installment in what’s been a devastating story for cinema chains.”