Cinemark, the third-largest movie theater chain in the US, said it has inked new deals with major Hollywood studios that will ensure that movies play in its theaters for a certain timeframe before moving to home video streaming.
During the pandemic, studios have opted to release some of their new films simultaneously in theaters and on streaming services like Netflix. In some cases, the flicks bypassed cinemas altogether, which further devastated the already wounded industry.
Cinemark said Friday that the new pacts with Warner Bros., Disney, Paramount and Sony Pictures, build on a November agreement with Universal Pictures in which Universal films must play in Cinemark theaters for at least three weeks or 17 days before moving online.
That still drastically shrinks the exclusive window a movie plays in theaters from the 74 days, or roughly two-and-a-half months, which was typical before the pandemic shut down movie houses. Cinemark chief executive Mark Zoradi didn’t disclose the terms of the new deals, but told analysts on a Friday call that some deals “go for multiple months; others go for multiple years.”
The announcement came as Cinemark and its bigger rival, AMC Entertainment, posted another quarter of pandemic-pummeled results. Plano, Texas-based Cinemark posted a widened $208 million loss after a year-ago loss of nearly $60 million. Revenue fell to just over $114 million, compared to year-ago revenue of $544 million.
Zoradi also said Cinemark is “actively” on the “road to recovery” even though its first-quarter financial results took a beating. The news sent shares up 4 percent in midday trading, recently changing hands at $21.25.
AMC Entertainment CEO Adam Aron late Thursday said that the movie theater recovery “is just about to start,” adding, “We can feel it, we can taste it, we can see it over the horizon.” In a dramatic flourish, Aron channeled Winston Churchill on a Thursday earnings call with analysts.
“‘This is not the end. It not even the beginning of the end. But it is perhaps the end of the beginning,’” Aron said, quoting the legendary UK prime minister. “Sir Winston won his titanic fight. I believe that AMC will win our war, too.”
The world’s largest movie theater chain said it is on the mend after it ran out of cash five times since the pandemic hit more than a year ago. The company scrambled to raise debt and equity financing to keep AMC afloat, thanks to millions of amateur investors in a Reddit chatroom and Robinhood traders who boosted the company’s stock earlier this year.
On Jan. 27, AMC’s stock mushroomed overnight from $5 a share to nearly $200 a share. The meteoric rise allowed AMC to decrease its debt load by roughly $600 million. The stock, which has since fallen back, was recently up 5 percent on Friday at $9.45.
AMC said it had 3.2 million individual shareholders as of March 11, who own about 80 percent of the 450 million shares outstanding. AMC’s new investors call themselves “apes,” a moniker that nods to the movie “Rise of the Planet of the Apes,” in which the main character, a chimpanzee named Caesar, communicates the phrase “apes together strong” using American sign language.
“They own AMC,” Aron said of the rookie investors. “We work for them. I work for them. So, by definition, their interests and passions are important to AMC.”
As a token of appreciation, Aron told investors that he and AMC would each make a $50,000 donation to the Dian Fossey Gorilla Fund, a conservation fund dedicated to protecting endangered mountain gorillas.
Already this year, the domestic box office has seen improvement, thanks to new releases like action flick “Godzilla vs Kong,” which, according to sales tracker Box Office Mojo, has grossed about $90 million so far. “Tom & Jerry,” starring Chloe Grace Moretz, as well as Disney’s animated kid-friendly movie, “Raya and the Last Dragon,” have pulled in $44 million and $42 million, respectively.
In the three months ended March 31, AMC’s net loss narrowed to $576 million from $2.2 billion, thanks to a year-ago one-time write-down of $1.85 billion. Revenue plunged 84 percent to $148 million from $941 million. The sharp drop is related to the fact that theaters are still not operating at full capacity and Hollywood’s newest films have been shelved until the pandemic wanes further.