Cineworld, the parent company of the world’s second-largest theater chain Regal Cinemas, has filed for bankruptcy.
As Deadline reports, Cineworld commenced Chapter 11 through the U.S. Bankruptcy Court for the Southern District of Texas. The action includes $1.94 billion in debtor-in-possession financing, which allows the chain to continue operating through restructuring by taking on even more debt.
Cineworld hopes to emerge from Chapter 11 early in 2023. Until then, the company will pursue a “a real estate optimization strategy in the US,” — a nice way of saying they’re closing a bunch of theaters — while also “engaging in collaborative discussions with US landlords to improve US cinema lease terms.”
Cineworld operates 9,139 screens across 747 theaters globally, with chains including Regal Cinemas, Cinema City, Picture House, and Yes Planet. The conglomerate acquired Regal in 2018 for $3.6 billion, taking on significant debt to do so. In hindsight it was one of history’s worst times for an exhibitor to go into the red, as the COVID-19 pandemic kneecapped their operations. By fall of 2020, Regal Cinemas had announced plans to temporarily close all their US-based theaters.
“The pandemic was an incredibly difficult time for our business, with the enforced closure of cinemas and huge disruption to film schedules that has led us to this point,” CEO Mookie Greidinger said. “This latest process is part of our ongoing efforts to strengthen our financial position and is in pursuit of a de-leveraging that will create a more resilient capital structure and effective business.”
Other exhibitors haven’t fared much better, with Vue International also currently going through restructuring. The exception is AMC Entertainment, which leveraged its unexpected status as a Reddit meme stock to improve its financial standing. That doesn’t mean their decision making is beyond criticism, though. Earlier this year, AMC bought a stake in a literal gold mine, even as the CEO of the company admitted he didn’t know how to run it, saying, “To state the obvious, one would not normally think that a movie theater company’s core competency includes gold or silver mining.”
For now, the big chains will keep trying to pull viewers off their couches and into theaters. Earlier this month, both Regal and AMC offered $3 movie tickets for the inaugural National Cinema Day.