Cineworld has confirmed today that all of its screens in both the UK and US will close down, due to the ongoing effects of the Coronavirus pandemic, which has been disastrous for the film industry as a whole. There are numerous reasons for this sudden closure, though we will go into those in further detail later in this article.
This unfortunately means that over 45,000 jobs are set to be lost, with over 5,000 of those losses happening around the UK.
Cineworld to close UK sites
This news follows on from reports we made earlier on in the year about how the film industry as a whole would ultimately suffer at the hands of Covid-19. Back then we stated that, ““The entertainment industry is struggling more than you may know. Massive film companies are having to push their biggest blockbusters back, meaning they’re missing out on millions of pounds they would have relied on earning when budgeting for 2020. Cinema companies, both in a chain and on an independent scale have had to close their doors meaning they can receive no funds from customer and have a major uncertainty as to when they’ll be able to reopen.
This is largely down to social distancing regulations, there’s simply no way to ensure people are keeping at least two meters apart at all times if you’re opening rooms up to the public that contain hundreds of seats, for the viewing of a film”.
Though, the issues were rooted much deeper than we first thought; it wasn’t social distancing rules alone that would hinder the chances of cinema survival across the country, it was also the sheer lack of film releases that would follow it up as a knock-on effect.
No time to die
The upcoming James Bond film, entitled ‘No Time to Die’ was set for release next month, though it has had its release pushed back to April 2021, meaning there were no big releases slated for October or November, which could have potentially seen crowds flooding back Cineworld cinemas all around the UK. Health risks or not, a new 007 film would have likely got a large number of people visiting their local cinemas to experience the film on the big screen.
The pushing back of this films’ release date has been a tragic hit for cinemas around the globe, but it was the final straw for Cineworld in the UK and US, and thus they have decided that a temporary closure of around a year is the only way for the business to attempt to stay afloat. If the cinema business is to have a future, something needs to change and fast.
The only other major release that was still set to feature this year was the movie ‘Dune’, though we would now expect this to receive a pushed back release date, also. The movie was set to release in November, though now it has a limited market in terms of both cinema-goers and screens that could show it to the public, it would unlikely be financially viable for the epic to make an appearance this year.
The issues run deep
The value of Cineworld stock had halved when the London stock exchange opened at 8am; the overall value is down by a staggering 90% for this year however. The cinema chain is apparently searching for other possible ways that it could raise funds for its survival, and a restructuring of debts is apparently also occurring.
The temporary closure of hundreds of multiplexes within the Cineworld chain could easily become permanent in the near future if no help is received. Though, the chances of relying on the current UK government for this help is unlikely.
Government help is hard to come by
Chancellor Rishi Sunak has suggested that the entertainment industry could receive further help from the government, but only when the time is right. You would assume a major chain of cinemas around the UK closing its doors and costing 5,000 jobs within this country may have acted as that very cry for help, though the government clearly don’t see it that way.
Here’s what representatives from Cineworld have said on the matter at hand:
“In response to an increasingly challenging theatrical landscape and sustained key market closures due to the COVID-19 pandemic, Cineworld confirms that it will be temporarily suspending operations at all of its 536 Regal theatres in the US and its 127 Cineworld and Picturehouse theatres in the UK from Thursday, 8 October 2020”.
The distant future is certainly unclear for the multiplex business, though these current complications have given them no choice but to shut up shop from next Thursday. On the job front, there’s no sign that employees will have any guarantee that they’ll be able to return to their jobs once a reopening occurs, though this is likely because none of us know what a Cineworld reopening looks like thus far; there’s certainly a strong chance of the business remaining closed for good.
Is Cineworld closing down?
Cineworld is not closing down as it has secured a £336 million (450 million US dollars) debt lifeline to help guide the troubled cinema chain through the coronavirus pandemic.
The group, which has temporarily closed its UK and US sites, said it has also secured access to another £233 million (310 million dollars) in liquidity to boost its finances.
Shares soared on Monday after it disclosed the new lending facility, which will mature in 2024. Last month, Cineworld shut the doors to 633 of its cinemas, leaving as many as 45,000 workers unemployed for the foreseeable future.
Operates in 11 countries: US, UK, Canada, Ireland, Poland, Romania, Israel, Hungary, Czech Republic, Bulgaria, Slovakia
- 2nd biggest cinema chain in the world
- 663 cinemas closing in the US (536) and the UK (127)
- 45,000 jobs at risk, 5,500 in the UK
- 27% fall in share price at London stock market opening
- 007 The delay of the new Bond film release triggered decision
The end of the big screen?
These are most certainly trying times for the entertainment industry and all of the businesses within it, not solely cinemas and film workers alone. Though, we will all lose something we’ve cherished in our lifetimes if these businesses can’t make it through, so here’s to hoping they receive the help they need, or can go about their individual insolvency process in a way that is right for them, and a way that helps them to once again be prosperous in the future. Having no place to go and see a film just won’t be right and we hope that independent and large brand cinema chains can all make it through this horrific period of time.
Be sure to contact us today if you have any queries regarding the insolvency process for a business you own. At Business Insolvency Helpline, it is our sole focus to help business owners, directors and entrepreneurs restore and turnaround the fortunes of their companies. As leading consultants in our field we provide a complete business rescue and turnaround service. We aim to ensure our clients get a second chance
Update: Odeon feeling the heat
In a way that seems reactionary to the news that Cineworld as a business will be at least temporarily closing down for the foreseeable future, Odeon Cinemas has announced that many of its multiplexes will only be open at weekends. A quarter of all Odeon cinemas will now only open from Friday-Sunday each week.
The reasoning around these highly reduced opening hours is all to do with the lack of upcoming blockbuster releases. With no upcoming films to bring in the public crowds, and more importantly inject some money into local cinemas, there’s simply no way businesses of this kind can continue to survive. The rescheduling of film releases means that multiplexes simply having nothing new to screen, which is obviously a huge problem.
The business has declined to comment on any potential job losses up to now, though the cinema chain currently employs around 5,500 people across its 120 theatres.
Vue boss says cinemas will survive
The chief executive of Vue, Tim Richards has said that cinemas will continue on and survive, despite having the rug pulled from underneath them. He has said the delay of the upcoming James Bond movie has lead to many cinema chains finding themselves on the back foot and in a spot of bother, but firmly believes that cinemas will be back with a bang.
He states that they, “just need movies”. It’s difficult to disagree with him there, as a film such as ‘No Time to Die’ would have almost certainly helped to get audiences flocking to their local multiplexes.
Vue is one of many companies that have been left dumbfounded by the news of multiple large-scale release movies being pushed back to a later date. They, like many, re-opened with the intentions of screening new films that would have audiences’ interests peaked and work as a persuasive way of getting them back into theatres around the country. With more or less nothing new coming out to speak of, it is certainly a difficult time for cinema owners, who are tasked with coming up with new, creative ideas of entertaining the masses, in order for their business ventures to go on.
Richards had the following to say on the matter, “We are still looking at all options and I think Friday’s news was a surprise, it did catch us off guard. We re-opened on the basis that we were going to be getting movies that then didn’t arrive. There are a lot of players that do not have the size and scale Vue does that will not survive.”
This suggests that perhaps our future will keep hold of its large-scale cinema companies, though the smaller, more independent businesses within this sector may find that survival is a real struggle; a struggle that is simply too much for them to comprehend.
Vue to close a quarter of cinemas three days a week
After representatives from Vue stated that they would continue to survive despite further film release pushbacks, they have now decided to extensively reduce their UK opening times. Vue will now only open its doors from Friday to Monday at a grand total of 21 UK sites, though it isn’t yet clear how these multiplexes’ employees will be affected. They possibly won’t at all, but we cannot confirm that for sure.
The affected Vue cinemas are Cardiff, Accrington, Altrincham, Barrow, Birkenhead, Blackburn and Carmarthen. Lancaster, Piccadilly, Redditch, Cleveleys, Dagenham, Hull Princes Quay, Rhyl, Scunthorpe, Shepherds Bush, Stroud, Swansea and Wood Green are also included.
The Independent have further discussed the reasoning behind Vue’s limited opening hours. It states that, “Prior to Cineworld’s announcement, it was revealed that the release of the forthcoming James Bond film No Time to Die would be postponed from November until Spring 2021.”
“Several other high-profile blockbusters set for release this year have been pushed back until 2021, including the Frank Herbert adaptation Dune, and the Marvel Cinematic Universe Film Black Widow.”
“Disney’s live-action Mulan, and the forthcoming Pixar film Soul, have converted to digital releases in lieu of the expected theatrical debuts”.
Expect to see further disruptions to cinemas all over the UK in the weeks to come; there has never been a more unclear future presenting itself unto the film industry and the only thing we all know for sure is that this is an extremely difficult period that will likely carry on for some time.
Will 2021 really see the return of the motion picture?
Many films that were due to release during 2020 have been pushed back to 2021, though that doesn’t necessarily mean they’ll actually stick to their new respective release dates. There are no promises or any binding contracts that keep things set in stone, so does next year actually mean for the world of film? In all honesty, it could see the industry’s shining return, or it could spell another 12 months of uncertainty for the world of cinema.
It will all depend on the big hitters (No Time to Die, Dune, The Batman, Soul, etc.) coming out. If we end up with a long list of movies that are once again pushed back, we may as well write next year off for cinemas and accept that the vast majority of them will be hopeless.
A message from the Prime Minister
Since the news of Cineworld’s sudden complete closure, Prime Minister Boris Johnson has conveyed a new message unto the public. He states that we should be visiting our local multiplexes and enjoying ourselves while doing so, in a safe fashion. Though, the message to ultimately support our local cinemas comes at a strange time, almost immediately after the biggest chain in the UK closes its doors and thousands of jobs are put at risk. The messaging has clearly come too late, but then again it is exceedingly difficult to convince people to go out and watch a film in a room filled with other people at the moment.
Cinemas have done what they can
Cinemas have made a really strong effort to keep the movie business going during the Covid-19 pandemic. They’ve installed all social distancing rules and followed the guidelines to a tee. They’ve made members of the public wear masks during film screenings and as they walk around the cinema locations themselves.
In truth the cinema business tried to advertise itself as a safe location to visit, and going out and getting some entertainment seemed like a perfect distraction from everything Covid-19 related, but it wasn’t to be. Audiences didn’t think visiting the cinema was worth the risk of contracting a life-threatening disease and on top of this, with no new blockbusters to watch, they’d be paying their hard-earned to watch something that was released years ago, which they could now likely stream online for free.