For more crisp and insightful business and economic news, subscribe to The Daily Upside newsletter. It's completely free and we guarantee you'll learn something new every day.
The show's over, folks.
Cineworld, the second-largest global theater operator, is shutting its doors for the second time this year.
This time, it's not the health authorities bringing the padlocks. It's the accountants.
Stealing The Show
U.K.-based Cineworld operates 500+ Regal Cinemas in the U.S. and 125+ Cineworld and Picturehouse theatres in the U.K.
Along with rivals AMC and Cinemark, Cineworld reopened in August hoping Christopher Nolan's latest spy film "Tenet," would lure people back to theaters.
- Over the last five weeks, the well-reviewed Tenet earned just $45 million at the box office. By comparison, Nolan's last film, "Dunkirk," earned nearly $170 million in its first five weeks.
- All in all, last weekend's total domestic box office brought in just over $8.3 million. That's down more than 93% vs. October 2019 levels.
The Reality: Operating near-empty theaters isn't profitable business. Cineworld CEO Mooky Greidinger told reporters, "From a liquidity point of view, we were bleeding much bigger amounts when we are open than when we were closed."
For theaters, COVID-19 continues to present a devastating one-two punch of both demand and supply. In addition to the dearth of people willing to trade pajamas and Netflix for tight public spaces and theater popcorn, the supply of new movies has slowed to a trickle.
- Last Friday MGM Studios pushed back the release of the latest James Bond installment, "No Time to Die," from November to next April. Cineworld's CEO called it "a huge blow."
- Poor theater attendance for Tenet prompted Warner Brothers to push back the release of "Wonder Woman 1984" by three months to Christmas Day. Disney has delayed the release of 10+ films, including its Marvel spinoff "Black Widow."
Cineworld CEO told the WSJ, "We are like a grocery shop that doesn't have vegetables, fruit, meat...we cannot operate for a long time without a product."
The Takeaway: Cineworld shares closed down 36% yesterday. The company is working with a syndicate of banks to secure breathing room on its loan agreements, and "all liquidity raising options are being considered."