READ THIS NEXT: This Popular Retail Chain Is Closing Stores Permanently, Starting Sept. 21. With the rise of Netflix and other streaming services, it’s been that much easier to screen movies from home. During the COVID-19 pandemic, many major studios even let viewers rent movies that couldn’t be screened in theaters due to quarantine restrictions. But while we may have enjoyed this cozy luxury, the global theatrical market took a severe hit as a result. In 2019, the global box office market was worth a total of $42.3 billion, plummeting to $11.8 billion in 2020 at the height of the pandemic, according to a 2021 Theme Report from the Motion Picture Association. When more theaters reopened in 2021, the market had somewhat recovered, totaling $21.3 billion. But digital streaming services continue to rise in popularity, and now one of the world’s largest movie theater chains is feeling the pressure. On Sept. 7, British-owned Cineworld Group filed for Chapter 11 bankruptcy protection in the U.S. You might not be familiar with the name “Cineworld”—even though it’s the second largest movie theater chain in the world, just behind AMC—but you will surely recognize Regal Cinemas, which is the company’s subsidiary. There are over 500 Regal Cinemas across 47 U.S. states, including Hawaii and Alaska. Even with such a large presence, however, the company reported nearly $8.9 billion in debt in 2021, according to The New York Times.ae0fcc31ae342fd3a1346ebb1f342fcb Now, Cineworld has started the process of Chapter 11 proceedings in the United States Bankruptcy Court for the Southern District of Texas, per the filing. RELATED: For more up-to-date information, sign up for our daily newsletter. The company acquired some of its debt while trying to “outlast lockdowns” that curbed profits, The New York Times reported, and the recent filing indicates a “substantial decline” for the movie theater giant. In 2020, Cineworld reported losses of $2.7 billion, and in 2021, they were out another $556 million, according to CNN. In the filing, Mooky Greidinger, CEO of Cineworld, spoke on the company’s struggles, adding that it continues to feel the ramifications of COVID-19. “We have an incredible team across Cineworld laser focused on evolving our business to thrive during the comeback of the cinema industry,” Greidinger said. “The pandemic was an incredibly difficult time for our business, with the enforced closure of cinemas and huge disruption to film schedules that has led us to this point.” Cineworld plans to stay in business and reduce its debts by reorganizing and restructuring, per the filing, and intends to “pursue a real estate optimisation strategy in the U.S.” This includes negotiating lease terms with landlords, positioning Cineworld “for long-term growth.” “This latest process is part of our ongoing efforts to strengthen our financial position and is in pursuit of a de-leveraging that will create a more resilient capital structure and effective business,” Greidinger stated. “This will allow us to continue to execute our strategy to reimagine the most immersive cinema experiences for our guests through the latest and most cutting-edge screen formats and enhancements to our flagship theatres,” he added. “Our goal remains to further accelerate our strategy so we can grow our position as the ‘Best Place to Watch a Movie.’” If you’re a regular at your local Regal Cinemas location, you don’t have to worry just yet. Cineworld secured a total of $1.94 billion in debtor-in-possession financing from existing lenders; as such, Cineworld anticipates keeping theaters open “as usual without interruption” during the restructuring process.
