Cineworld, the world’s second-biggest cinema chain and one controlled by an Israeli family, will close its U.K. and U.S. movie theaters this week, leaving as many as 45,000 workers unemployed, as it fights a coronavirus-related collapse in film releases and cinema-going.
The company said the reluctance of studios to go ahead with major releases such as the new James Bond film had left it no choice but to close all 536 Regal theaters in the U.S. and its 127 Cineworld and Picturehouse theaters in the U.K. from October 8.
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Cineworld CEO Mooky Greidinger told Sky News that the operations might resume in “two months, or a bit longer.” Movies including the superhero sequel “Wonder Woman 1984” are slated for a Christmas Day release.
“From a liquidity point of view, we were bleeding much bigger amounts when we were open than when we were closed,” said Greidinger, whose family started in the cinema industry in Haifa in the 1930s. They made their first foray abroad in 1997 into Hungary.
Cineworld’s statement on Monday, confirming leaks over the weekend, spelled out the scale of job losses from its move, which affects thousands of ancillary staff including cleaners and security as well as its own employees.
Shares fell as much as 60% to an all-time low within 10 minutes of the opening bell on Monday as the group, which is carrying heavy debt due in part to its acquisition of Regal in 2018, said it was looking at all ways of raising additional funds. It ended down more than 36%.
Cineworld’s statement follows a grim evaluation by ratings agency S&P on Friday of rival AMC Entertainment, owner of the Odeon chain, which said the U.S.-based group may run out of liquidity in six months unless it can raise more capital.
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The entertainment industry has been among the heaviest hit by social distancing and other restrictions, with Walt Disney last week announcing plans to lay off roughly 28,000 employees, mostly at its U.S. theme parks.
Cineworld began reopening in July after virus-related restrictions started to ease, but the further postponement of the James Bond film “No Time To Die” and others including Marvel’s “Black Widow” have left the months ahead looking bleak.
“Without these new releases, Cineworld cannot provide customers in both the U.S. and the U.K. ... with the breadth of strong commercial films necessary for them to consider coming back to theaters,” it said.
While some cinemas in China, the world’s second-largest movie market, have reopened with strong audiences, there is a lack of major movies to watch on the big screen.