As has been widely reported, Regal Cinemas, the second-largest chain of movie theatres in the U.S., will close 39 locations after its parent company Cineworld filed for bankruptcy in September, according to legal filings.
Given the massive decline in the domestic box office during the COVID-19 pandemic, the monthly rent per theatre increased by nearly 30 percent from 2019 to 2022, according to the latest bankruptcy filing, causing Cineworld to reject the leases beginning February 15.
“In total, the Debtors estimate that rejecting the Leases will save their estates approximately $22 million annually,” the filing said. Any personal property of little value remaining at the locations will be abandoned.
Cineworld operates 747 locations with 9,139 screens in 10 countries, with roughly 500 of those theatres in the U.S. Theatrical moviegoing has taken a huge hit during the pandemic, with the 2022 domestic box office tapping out at $7.5 billion, an approximate 30 percent decrease from the $11.4 billion in 2019 pre-COVID. The company took a loss of $3 billion in 2020, as many theatres remained shuttered, and a $708.3 million loss before tax in 2021. The net debt, excluding lease liabilities, was $4.84 billion.
The move will leave just 33 Regal theatres open in New York. The new closings are on top of a dozen other movie theatres that closed in recent months, including four in California.
Cineworld filed for Chapter 11 bankruptcy protection in the U.S. in September due to nearly $5 billion in debt and business struggles caused by the pandemic and a shift by Hollywood studios to streaming and video-on-demand releases.
Cineworld said its plans to close 39 locations this year would help it save $22 million, according to a new bankruptcy filing. Cineworld says it’s still working to preserve its other locations; as of last fall, the company had more than 500 locations and 28,000 employees.
“The debtors are hopeful that these negotiations will lead to lease concessions and modifications that will obviate the need for rejection and enable additional theatre sites to remain open,” Cineworld said in the filing.