Step right up to see the amazing contortions of the world’s second-largest exhibitor, Cineworld, as it makes its way through Chapter 11 restructuring before the U.S. Federal Bankruptcy Court in Houston, Texas.
This week, onlookers watched Cineworld’s attorneys explain that box office revenues during the fourth quarter were “extremely disappointing”, well below the estimates they had given at the outset of the quarter began. In fact, ticket sales for December alone came in 44% lower than earlier estimates from the Cineworld team.
The company is pointing to soft revenues as a key factor in the slow pace of its re-negotiations of lease terms with landlords for its many locations. When Cineworld declared bankruptcy in September, it operated more than 500 Regal Cinemas locations across 42 U.S. states. Since that time, the company has closed 23 theatres and renegotiated lease terms at approximately 25% of its remaining locations.
Judge Marvin Isgur, who is presiding over the case, stated on Wednesday, “We are not going to stick around forever. The debtors need to be aggressive. I am not sitting here for a year, or for six months, to figure out what shops are closing. That is a process that is going to happen now.”
Cineworld is also said to have had a preliminary discussion with certain competitors on the potential to sell some or all of its U.S. locations. The potential suitors include AMC Theatres, the world’s largest exhibitor, and Cineplex Theatres, the number one exhibitor in Canada. However, talks with AMC have cooled due to AMC’s own financial struggles and plunging stock prices.