World’s second-largest cinema operator plans to open UK chain from 17 May in line with Covid-19 restrictions
Cineworld, the world’s second-largest cinema operator, will reopen its screens in the US next month to coincide with the new film releases Godzilla vs Kong and Mortal Kombat, and has struck an exclusivity agreement with Warner Bros.
Cineworld, whose cinemas have been shut for the past six months because of the Covid-19 pandemic, said some of its 536 Regal theatres in the US would open on Good Friday for Godzilla vs Kong, the fourth film in Legendary Entertainment’s MonsterVerse. The remainder will reopen with Mortal Kombat on 16 April.
In most US states, cinemas can only be half full under Covid-19 restrictions, but this would allow Cineworld to operate profitably, according to its chief executive, Mooky Greidinger. The US makes up three-quarters of the London-listed firm’s business.
“We will also be monitoring developments closely in the UK and across Europe as we set to gradually reopen across the world in line with local government guidance,” Greidinger said.
In the UK, where it is the biggest operator with 127 cinemas, Cineworld plans to reopen the majority on 17 May, in line with government’s timetable for the easing of lockdown restrictions. Other chains have not announced dates yet. It does not plan permanent closures.
The company has also reached a multiyear agreement with Warner Bros under which Cineworld will be able to show new releases exclusively for 45 days in the US from next year.
For the UK, Cineworld has exclusivity rights for 31 days before them being released for streaming, rising to 45 days for films that sell an agreed upon number of tickets.
Greidinger said: “This agreement shows the studio’s commitment to the theatrical business and we see this agreement as an important milestone in our 100-year relationship with Warner Bros.”
Cineworld’s decision to close all of its cinemas in the UK and US in October came after the premiere of the next James Bond film was delayed yet again, in the worst year for cinema-going on record.
In November, it secured financial lifelines from lenders worth $750m (£550m). Its parlous financial state is in stark contrast to the success of streaming services such as Netflix during the pandemic.
Cineworld will publish its results for 2020 on Thursday, which are expected to show a pretax loss of almost $700m (£500m) and revenues of $900m. This would be down from $4.4bn in 2019, notched up in the best year to date at the global box office. Cineworld made a statutory pretax profit of $212m in 2019.
Susannah Streeter, a senior investment and markets analyst at Hargreaves Lansdown, said: “Deals like this [with Warner Bros] are likely to provide the blueprint for the industry going forward, helping cinemas lure in fans eager to glue their eyes to new releases as soon as they can. The window though is small and so advertising spend may be forced to rise to get seats filled before films to drift to devices.”
Shares in the company were down 3% on Tuesday.