The impact of Cineworld’s bankruptcy is seeping into many sectors of the movie business. One unexpected casualty is the cinema advertising business, where advertising specialists provide income to exhibitors as a share of the money advertisers spent to have their brands and products featured in a pre-show reel that plays before the movie.
National CineMedia (NCM) is the largest provider of cinema advertising services in the U.S., having partnerships with major circuits such as AMC, Regal, and Cinemark. Cineworld represents NCM’s largest exhibitor partner, with all 550 Regal Cinemas locations in the U.S. playing the NCM program. Cineworld is also one of the three founding partners that created NCM in 2007, joining forces with rivals AMC and Cinemark.
As part of its bankruptcy, Cineworld has asked the court to allow it to cancel its long-term agreement with NCM, and instead pursue other partnerships or approaches to produce more income. It has been reported that Cineworld has begun talks with Screenvision, NCM’s chief competitor, and is also exploring the option of bringing its advertising program in-house to run as an internal business.
Last week, NCM responded by filing a lawsuit to block Cineworld’s maneuver, claiming that the exhibitor is unfairly “weaponizing” the bankruptcy process. The loss of Regal would be a devastating blow to NCM, which is struggling with its own sizable debts as it is still recovering from the shock of the pandemic. NCM’s lawsuit indicates how essential NCM feels it is to keep Regal’s business.
See Also: National CineMedia and Spotlight Cinema Networks Collaborate to Launch Elevate Cinema Network (Business Wire) and Family Feud: National CineMedia Sues Regal For Breach Of Contract, Says Theater Chain Is “Weaponizing” Chapter 11 (Deadline)