Cinema giant Cineworld — the second largest global exhibitor behind AMC — early Monday morning London time confirmed that it is temporarily suspending its operation in the U.S. and U.K.
The move — which sparked shockwaves across the industry when it first came to light over the weekend — impacts 536 Regal cinemas in the U.S. and 127 Cineworld and Picturehouse in the U.K., and comes into force from Oct. 8.
Cineworld’s stock was down 47 percent in early London trading before settling a bit and at 8:20 a.m. trading down 40 percent.
“As major US. markets, mainly New York, remained closed and without guidance on reopening timing, studios have been reluctant to release their pipeline of new films,” it said in a statement. “In turn, without these new releases, Cineworld cannot provide customers in both the US and the UK – the company’s primary markets – with the breadth of strong commercial films necessary for them to consider coming back to theatres against the backdrop of COVID-19.”
The company said the closures would impact approximately 45,000 employees.
“This is not a decision we made lightly, and we did everything in our power to support safe and sustainable reopenings in all of our markets – including meeting, and often exceeding, local health and safety guidelines in our theatres and working constructively with regulators and industry bodies to restore public confidence in our industry,” said CEO Mooky Greidinger.
“We are especially grateful for and proud of the hard work our employees put in to adapt our theatres to the new protocols and cannot underscore enough how difficult this decision was, Cineworld will continue to monitor the situation closely and will communicate any future plans to resume operations in these markets at the appropriate time, when key markets have more concrete guidance on their reopening status and, in turn, studios are able to bring their pipeline of major releases back to the big screen.”
B. Riley analyst Eric Wold in a Monday morning research report said the latest delays of movies amid the coronavirus pandemic could have major consequences for the industry. “While we can completely understand a studios’ desire to generate the greatest return for its films, we also have to believe they have a desire to keep the industry intact and not force the theatrical window into oblivion,” he said. “We have stressed for some time that the exhibition industry restart is out of the hands of the exhibitors — but if the studios continue to push out the release window, there may not be anything around when they are ready.”