Russian Cinema Chains Call for Revising Rental Conditions
With the ruble falling drastically against the U.S. dollar, they are unable to pay rent fixed in dollars
Russian cinema chains are calling on owners of shopping malls where their theaters are located to adjust rental contracts against the backdrop of the weakening ruble, which threatens to drive them out of business.
Several large cinema chains, including Cinema Park, Karo Film, Kinomaks and Formula Kino, have sent an open letter to mall owners, requesting that rental contracts, in which rent is normally stipulated in U.S. dollars, be revised and rent fixed in rubles.
The lion's share of contemporary Russian film theaters are located in shopping malls. Now that the ruble has fallen off the cliff against the dollar, with the exchange rate plummeting as low as 80 rubles for one U.S. dollar on Tuesday, as opposed to 47 rubles a month ago, theater chains have trouble paying rent as their revenues from ticket sales are all in rubles.
As an alternative option, theater chains suggested that they pay rent as percentage of a theater's turnover, rather than a fixed monthly amount, which they think would be a fair deal.
"That would put theaters and malls in the same situation," Nikita Shchegol, general director of the theater chain Formula Kino, was quoted as saying by the Russian business daily Vedomosti. "Both partners would be interested in growing attendance of the mall in general and the theater located in it."