Cineworld Group PLC (LON:CINE) announced it will start reopening its US cinemas next week while it also clinched a multi-year agreement with Warner Bros. Pictures Group.
The phased reopening will begin with a limited number of cinemas admitting the public for screenings of ‘Godzilla vs. Kong’ on April 2 and going wider with ‘Mortal Kombat’ on April 16.
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The company operates in the US through Regal, which owns 7,076 screens in 536 theatres in 42 states along with the District of Columbia and Guam as of last September.
Chief executive Mooky Greidinger said in a release the firm will be able to operate profitably as capacity restrictions expand to 50% or more across most US states.
Cineworld also plans to reopen in the UK, its second biggest market, in May, in line with current government guidance.
In addition, Cineworld has reached a multi-year agreement with film production house Warner Bros. Pictures Group.
Its films will be exhibited in Cineworld's cinemas in the US as of their opening, while in 2022, Warner Bros. theatrical releases will have a 45-day window of theatrical exclusivity, with certain provisions.
As for the UK, Warner Bros. and Cineworld have agreed to an exclusive theatrical window of 31 days before being released on streaming services.
“This is a great moment for us-- the US market represents 75% of our business-- and soon will be followed with all our markets. We are great believers in the theatrical experience, which only a year ago (2019) generated US$43bn worldwide,” noted Greidinger.
Analysts said that the challenge now is whether consumers will want to go back to the cinema, which may depend on the appeal of the films being shown and people's willingness to mix in public again.
“One would think visiting a cinema is essentially mirroring what people have been doing for the past year, namely sitting in a seat and staring at a screen. But there is still something magical about sharing the experience of the cinema with an audience and seeing films on a very large screen," said AJ Bell investment director Russ Mould.
“It seems wrong to declare Coronavirus (COVID-19) being the final nail in the coffin for cinemas. However, how long certain cinema operators will stay alive is a separate matter. Cineworld is drowning in debt and it needs people to be devouring pick 'n mix and buying lots of tickets to revive its earnings.
Shares slid 5% to 105.71p on Tuesday morning.
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