Marcus Theaters is the 4th largest exhibitor in the US, operating 1,110 screens across 17 states. Unlike its larger competitors, Marcus owns the property at most of its theatre locations, having the real estate on the balance sheet for 62% of its screens. This strategy has helped the exhibitor withstand the precipitous drop in revenues in 2020 due to closures forced by the coronavirus pandemic. President Greg Marcus explains, “Owning most of our real estate is a significant advantage for us relative to our peers. It keeps our monthly fixed lease payments low and provides significant underlying credit support for our balance sheet.” When the expected rebound in exhibition arrives later in the year, Marcus expects it to return to profitability quickly, paying back debts incurred during the lean times.
Meanwhile, shares in Cinemark surged last week after exhibition industry analyst Eric Wold from B. Riley issued a report that predicts a full recovery for the industry, with revenues returning to pre-pandemic levels by 2022/2023. Wold suggests that Cinemark has maintained a strong balance sheet throughout the pandemic, which will allow it to open back up quickly and successfully once the Hollywood film slate returns to theatres. Cinemark also predicts that the new revenue stream established during the pandemic from private “watch parties” will continue even after its theatres re-open with a full schedule of traditional showtimes and ticket sales.