The U.S. film exhibition industry absorbed a major loss as the privately-held Decurion Corporation announced the closure of its Arclight Cinemas and Pacific Theatres chains.
What Happened: The two chains have been shuttered since the COVID-19 pandemic took root in March 2020. In a statement, the company announced operations will not be revived.
“This was not the outcome anyone wanted, but despite a huge effort that exhausted all potential options, the company does not have a viable way forward,” the company said.
The Pacific Theatres and Arclight brands consisted of more than 300 screens in California, most notably the iconic Cinerama Dome, a geodesic dome theater built in 1963 to accommodate the premiere of the slapstick epic “It’s a Mad, Mad, Mad, Mad World” and featured in many notable films, most recently Quentin Tarantino's "Once Upon a Time in Hollywood." The chains also operated venues in Boston, Chicago and the Washington, D.C., metro area.
Why It Matters: All 50 states have given the greenlight for movie theaters to move beyond the pandemic and resume operations, albeit at varying levels of venue capacity. According to the National Association of Theater Owners, only eight states — Iowa, Montana, Nebraska, Oklahoma, South Carolina, South Dakota, Texas and Wisconsin — have eliminated seating restrictions and allow theaters to operate at full capacity.
But for theater companies operating venues at limited capacity levels, the return to pre-pandemic profitability will be a challenge.
AMC Entertainment Holdings Inc AMC reported 2020 revenue of $1.2 billion, down from $5.4 billion in 2019. Cinemark Holdings, Inc. CNK reported $686.3 million in 2020 revenue, compared to $3.2 billion one year earlier.
IMAX Corp IMAX took in $137 million in revenue last year, compared to $395.7 million in the prior year. The privately-owned Alamo Drafthouse filed for Chapter 11 bankruptcy last month after finding it impossible to service its $105 million in long-term debt.
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What Happens Next: Complicating matters for exhibitors is a very limited quantity of product to attract audiences back to the theaters. While “Godzilla vs. Kong” reanimated the U.S. box office with a strong $48.5 million in its first five days since opening on March 31, it is still the only box office bonanza in release.
Over the past weekend, “Godzilla vs. Kong” reigned at the U.S. box office with $13.3 million ticket sales, a far distance from second-place “Nobody,” an action-thriller released by Comcast Corporation's CMCSA Universal Pictures, which took in $2.65 million. “Godzilla vs. Kong” brought in more at the box office than the other nine films in the top 10 releases combined. Not surprisingly, many multiplexes have “Godzilla vs. Kong” occupying a majority of their available screens. The movie was a production of AT&T Inc. T subsidiary Warner Bros. and Legendary Pictures Productions LLC, a subsidiary of China's Wanda Group.
The dearth of audience-bait flicks could be resolved in time for the summer film season, with Paramount, a ViacomCBS Inc VIAC subsidiary, releasing “A Quiet Place Part II” on May 28, Walt Disney Co DIS releasing “Cruella” on May 28 and “Black Widow” on July 9, and Universal unveiling “F9,” the latest installment of the “Fast and the Furious” franchise on June 25.
However, not everyone is convinced a pre-pandemic normalcy can be achieved by summer: Paramount rescheduled the Tom Cruise action film “Top Gun: Maverick” from July 2 to Nov. 19, while rescheduling another Cruise title, “Mission: Impossible 7,” from Nov. 19 to May 27, 2022.
Adding to the uncertainty of film exhibition is whether audiences will watch films at home rather than pay to see them on a big screen. At the moment, streaming does not seem to be stealing audiences. “Godzilla vs. Kong” has been available for free viewing to HBO Max subscribers while playing in theaters, but whether the theaters can muscle out the threat from streaming remains to be seen.
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(Photo of the Cinerama Dome by Steve Boland / Flickr Creative Commons.)
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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