Australia markets open in 6 hours 9 minutes
  • ALL ORDS

    7,252.30
    +2.00 (+0.03%)
     
  • AUD/USD

    0.7624
    -0.0030 (-0.39%)
     
  • ASX 200

    6,995.20
    -3.60 (-0.05%)
     
  • OIL

    59.34
    -0.26 (-0.44%)
     
  • GOLD

    1,744.10
    -14.10 (-0.80%)
     
  • BTC-AUD

    78,636.73
    -1,018.96 (-1.28%)
     
  • CMC Crypto 200

    1,235.89
    +8.35 (+0.68%)
     

Cineworld to reopen cinemas in the US and UK

Saleha Riaz
·3-min read
London, United Kingdom - October 5 2020: A woman with a protective face mask walks past Empire Cinema, operated by Cineworld, on Leicester Square
The film industry had been rattled by a number of blockbuster film delays, such as Marvel’s Black Widow and the latest James Bond film No Time To Die. Photo: Getty

Cineworld (CINE.L) said it plans to reopen in its two biggest markets, the US and the UK, in the coming months after shutting down in October 2020 due to the economic fallout of the pandemic.

In the UK they will begin reopening in May, in line with government guidance, while US theatres will open in April.

Cineworld closed its cinemas in the UK and the US indefinitely towards the end of last year. Thousands of Cineworld staff in Britain are currently on furlough as all 127 of its UK sites remain closed due to the pandemic.

The industry had been rattled by a number of blockbuster film delays, such as Marvel’s Black Widow and the latest James Bond film No Time To Die.

As per UK prime minister Boris Johnson's plans to ease restrictions, indoor hospitality venues including cinemas will be allowed to open on 17 May at the earliest.

The phased reopening in the US will kick off with a limited number of cinemas opening for Godzilla vs. Kong and Mortal Kombat.

"With capacity restrictions expanding to 50% or more across most US states, we will be able to operate profitably in our biggest markets. 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," said CEO Mooky Greidinger.

Cineworld has also reached a multi-year agreement under which films from Warner Bros Pictures Group will be shown in its cinemas as of their opening.

READ MORE: Cineworld hit with shareholder revolt over £208m share scheme

Beginning in 2022, Warner Bros theatrical releases will have a 45-day window of theatrical exclusivity in the US.

In the UK, they will have exclusive theatrical window of 31 days, and an extended window of 45 days for films that open to an agreed upon box-office threshold.

"This is a great moment for us— the US market represents 75% of our business— and soon will be followed with all our markets. We are great believers in the theatrical experience, which only a year ago (2019) generated $43B worldwide." Greidinger noted

Cineworld’s stock was down 1.5% Tuesday morning.

Its share price plunged 86% between February and October "but after it grabbed hold of fresh financial lifelines and vaccine rollouts lifted the curtain on a more positive picture, its share price has staged a comeback, rising by around 350% since its low," noted Susannah Streeter, senior investment and markets analyst, Hargreaves Lansdown.

"A swift recovery will be crucial given the company is saddled with high levels of debt but there are fears some movie fans may have got a little too comfortable watching releases from the comfort of their sofas, and might be slow to return to the big screen," she noted.

She also said the deal with Warner Bros should "mitigate some of these concerns, and give it the edge over streaming giants for a period of time."

"Deals like this 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 drift to devices," she noted.

Back in January, almost a third of Cineworld shareholders rebelled against plans to pay the company’s bosses share-based awards worth up to £208m ($283m).

WATCH: Why can't governments just print more money?