Cineworld plans to reopen in US and UK as it strikes deal with Warner Bros
Agreement gives cinema chain exclusive rights to show films over streaming services
Cineworld is set to post a sharp plunge in sales for the past year after its global cinemas were closed to customers amid pandemic restrictions. Photograph: Mike Egerton/PA
Cineworld has confirmed it plans to reopen its 127 outlets in May following the easing of Covid-19 restrictions in the UK as part of the Government’s road map to economic recovery.
Bosses also revealed they will open cinemas in the US under its Regal brand from April 2nd, following six months of closure. In addition, a deal has been struck with Warner Bros that gives the cinema chain, which also owns the Picturehouse franchise, exclusive rights to show films over streaming services.
The phased reopening in the US will start with a limited number of cinemas opening for Godzilla vs. Kong on April 2nd followed by screenings of Mortal Kombat from April 16th.
Chief executive Mooky Greidinger said: “We have long-awaited this moment when we can welcome audiences back to our Regal theatres and restore our essential role within the communities we serve. “With capacity restrictions expanding to 50 per cent 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.”
Mr Greidinger also revealed that Cineworld, which also has a cinema in Dublin’s Parnell Street, has reached an agreement with Warner Bros to show the studio’s films exclusively in its cinemas 31 days prior to them being made available on premium video on demand (PVOD) platforms for streaming at home.
An extended window of 45 days for films that open to an agreed-upon box office threshold has also been reached, it added.
Shares were down 2 per cent by 8.53am Irish time after earlier rising as much as 5 per cent, with a Berenberg analyst saying markets were focusing on how the deal cut the traditional 90-day exclusivity window in half.
Cinema chains have been fearful that, with the pandemic seeing studios turn to online platforms, it could set a longer term trend on new releases going straight into homes via PVOD services.
But Mr 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.”
Mr Greidinger will be hoping for a strong return to cinemas, having persuaded shareholders in Cineworld to approve plans that could see him net a $65 million bonus in three years’ time if certain targets are hit.
The bonus — which is part of a pot for executives worth up to $208 million (€175m) — had been described as “excessive”, especially since the company put 5,000 staff in the UK on to the Government’s furlough scheme. Corporate governance experts questioned why the chief executive needs the bonus “incentive” to keep working at the business, considering his family already has a 20 per cent stake in it.
Analysts on average have estimated Cineworld’s 2020 loss at $1.29 billion when it reports results on Thursday, Eikon data from Refinitiv shows. That compares to a profit of $220.2 million in 2019. – PA and Reuters