European Cinema Giant Vue Asks Landlords for "Complete Waiver" of Rent Amid Virus Crisis

Tim Richards, CEO Vue International
Simon Dawson/Bloomberg via Getty Images

Tim Richards, CEO Vue International

The U.K.-based theater chain, which has sent letters to all of its landlords across Europe, is also requesting that the rent for the 12 months after reopening be "turnover-based only."

European movie theater giant Vue International has made a bold plea to its landlords in a bid to survive the novel coronavirus crisis.

In a letter sent earlier this month and seen by The Hollywood Reporter, the multiplex chain — which operates almost 2,000 screens across 10 countries, including the U.K., Germany, Italy, Denmark and Taiwan — asked for a "complete waiver of all rent and service charge," which would have been due for the period of closure. Like most operators, Vue shuttered all 228 of its sites in March as the pandemic spread, with the exception of its sole 20-screen Taiwanese cinema.

Some European countries are beginning to offer a timeframe for the easing of lockdown restrictions, including the reopening of cinemas, but in Vue's largest market of the U.K., where the official coronavirus death toll (just from hospitals) has surpassed 21,000, authorities have no announced plan in place. Even the most optimistic estimates don't see cinemas opening their doors again until late June, which could amount to at least a month's rent.

Speaking to THR, Vue founder and CEO Tim Richards said that the letter had been sent to its landlords in all of its markets except Taiwan.

"It was disappointing initially that we were being asked to pay 100 percent rent with a 100 percent service charge when we had been ordered to close by the government," he said. "We look at this as an ecosystem, where we drive footfall into shopping centers and drive footfall on the high streets. We live in exceptional times right now and kind of felt there should be a mutual sharing of the pain and belt-tightening. It doesn't feel right that one party should profit at the expense of another."

Reactions to the letter spanned a "full spectrum" of responses, claimed Richards. "We've had a number of highly constructive discussions with our landlords, some where we're paying no rent during that closure period and have worked out arrangements with the landlord to compensate through the lease mechanics later on," he said.

"And it's ranged from those constructive discussions right through to my first email at 7:30 a.m. on Sunday morning, which was being served notice by somebody using duct tape to put a winding-up notice onto our window in our head office," he added.

Vue isn't the only affected business to push back against its rent, one of the biggest cash drains alongside wages for cinema firms. In the U.S., AMC Theatres — estimated to have a quarterly rent bill of around $250 million — informed its landlords that its rent wouldn't be paid from April 1 due to the novel coronavirus outbreak.

The letter from Vue also requested that rent for the 12 months after reopening be "turnover-based only, based on actual admissions." It pointed to the fact that, once reopened, cinemas would likely be operating under usual capacity due to social distancing rules and the fact that major studios would likely hold back major releases until theaters were fully functioning.

"We're looking at this as a little bit of a partnership with our landlords," said Richards. "We know that things are probably going to get off to a slower start, and we're expecting our audiences to be back sometime in the autumn in full force."

Eyeing an opening in late June or early July, Richards saw Christopher Nolan's Tenet — still set for a July 17 release by Warner Bros. — as potentially the "major, major blockbuster" to help kick-start the business again.

"What we're discussing with our landlords is with amazing periods like Tenet coming out, we're willing to share our successes with you during that period on a turnover-based deal," he said. "But equally, during quieter periods we'd like to share that as well."

Having seen the coronavirus crisis hit Taiwan, before impacting Vue's circuit of cinemas in Northern Italy, Richards said the company — following months of daily meetings involving a dedicated team — has drawn up a list of preopening and opening protocols, which it is now sharing with the authorities across its markets.

"We're working very closely to try and give governments the benefit of our experience," he said.