Cineplex Unveils Private Movie Screen Rentals Amid Falling Attendance, Revenue

Scotiabank Theatre Toronto - Cineplex Entertainment - Publicity -H 2016
Courtesy of Cineplex Entertainment

The Canadian exhibitor is following AMC and Cinemark in offering private Hollywood film screenings for up to 20 friends and family members amid the pandemic.

Cineplex has unveiled private theater rentals for up to 20 friends and family members, starting at US$95 each.

The Canadian exhibition giant, in following AMC, Cinemark and Alamo Drafthouse with private screen hires, is looking for a new revenue generator after unveiling third-quarter results that underlined the continuing impact of the pandemic on its operations.

On Friday, Cineplex CEO Ellis Jacob told analysts during a morning call that his company had been "severely impacted by COVID-19, resulting in substantial decreases when compared to last year." Following a theater reopening starting in June, Cineplex saw overall attendance fall 91 percent to 1.6 million patrons during the latest financial quarter, compared to 2019, while overall revenues collapsed 85.4 percent to US$46.5 million.

Amid COVID-19 restrictions and and delayed Hollywood tentpole releases, Cineplex swung to a loss of US$92 million, compared to a year-earlier profit of CAN$13.4 million.

Christopher Nolan's Tenet accounted for just over 37 percent of Cineplex's box office revenues during the latest quarter, followed by The Spongebob Movie: Sponge on the Run pic, which earned 14.3 percent of ticket receipts, as Cineplex faced a shortage of tentpoles to lure Canadians back to the multiplex.

Jacob told The Hollywood Reporter that, with China, Japan and the Asian market breaking box office records while the North American theatrical market struggles, theater attendance at his Canadian theaters would also follow suit and rise post-pandemic.

He pointed to the recent Remembrance Day holiday attendance. "We really saw guests come back. They want that social experience. And as long as they feel safe and comfortable, and we made sure they did, we will see more of that rise in attendance as we move forward," Jacob said.

As it reported its latest results, Cineplex said its creditors via a second agreement had extended covenant relief by six months to the second quarter of 2021. As of Sept. 30., Cineplex had US$350 million in outstanding debt on its balance sheet and currently has a monthly cash burn rate at around US$15 million to remain in operation.

The company is also relying on property and other asset sales, a federal tax refund and theater rent forgiveness by landlords to help cut operating costs into 2021. And Cineplex is banking on the promise of a vaccine being distributed in mid-2021 as a possible pandemic cure to help bring customers back to the multiplex.

"Of course, we are encouraged by the recent news of the successful trial of a COVID-19 vaccine," Jacob told analysts, which would be expected to reduce theater capacity restrictions and boost attendance beginning next year. He also ventured overall Hollywood box office in 2021 could be strong as the major studios continue to delay tentpole releases to next year.

"Given the sheer volume of titles, it looks like we may have a new major release almost every week," he noted about 2021.

Jacob conceded Warner Bros. could yet push Wonder Woman 1984 to next year, from the upcoming Christmas period, as it needed theaters in New York City and Los Angeles to ensure profitable box office returns and time to market the movie ahead of a theatrical release.

"At that moment they (Warner Bros.) haven't indicated that, but the risk is there," he told analysts.