Regal Cinemas owner Cineworld Group just kicked off Chapter 11 bankruptcy proceedings.
The London-based British entertainment conglomerate filed for bankruptcy on Sept. 7, 2022 in the United States Bankruptcy Court for the Southern District of Texas, according to The Hollywood Reporter. "As part of the Chapter 11 cases, Cineworld, with the expected support of its secured lenders, will seek to implement a de-leveraging transaction that will significantly reduce the group's debt, strengthen its balance sheet and provide the financial strength and flexibility to accelerate, and capitalize on, Cineworld's strategy in the cinema industry," Cineworld said, in a press release. "The group Chapter 11 companies enter the Chapter 11 cases with commitments for an approximate $1.94 billion debtor-in-possession financing facility from existing lenders, which will help ensure Cineworld's operations continue in the ordinary course while Cineworld implements its reorganization."
It has been a turbulent time for theater chains of late, with restrictions and closures related to the COVID-19 pandemic causing considerable financial and logistical headaches for owners. Several chains (including Cineworld) saw their stock prices plummet in October 2020 after Regal Cinemas announced it was closing all its theaters in both the US and the UK. That said, many theater owners saw their share prices begin to recover in January 2021 following the strong opening weekend of Wonder Woman 1984, and Regal Cinemas publicly shared its intentions to re-open its theaters by March 2022.
Cinema Chains Rocky Road to Post-Pandemic Recovery
The chain's venues were up and running again by May 2021, at which time Regal Cinemas made headlines for lifting its mask requirements for vaccinated moviegoers. America's two other largest theater chains, AMC and Cinemark, likewise made mask-wearing optional for patrons (but not for staff), in accordance with updated CDC guidelines. Other COVID-19 safety measures, including socially distanced seating, limited screening capacities and enhanced theater cleaning techniques, remained in place, however.
Despite the challenges facing cinema chains, 2022 is shaping up to be a bumper year for the US film industry. The North American market is on the verge of toppling China as the number one market for global box office sales, recording $3.7 billion in total revenue in the first half of the year compared to China's $2.6 billion. Part of the North American market's surge is no doubt down to the performance of high-profile releases such as The Batman, Doctor Strange in the Multiverse of Madness and Top Gun: Maverick. This is especially true of Top Gun: Maverick, which recently became the fifth highest-grossing film of all time at the domestic box office.
Source: THR