While the debt-ridden Cineworld Group weighs a bankruptcy filing, citing the upcoming lack of fall wide releases, smaller theaters and chains are less fazed by the slowdown.
As many theater owners are quick to point out, August, September and October are always seasonally slower months for film releases, but this year, there are even fewer high-profile Hollywood wide releases due to pandemic-related delays in the post-production sector.
However, thanks to a mix of cost-cutting measures and the ability to lean into art house films and other programming, smaller theater owners say they’re able to weather the season. Ditto for the larger circuits, such as Cinemark or Cineplex, who aren’t facing the same debt issues as Cineworld and AMC Entertainment. (Studio distributors counter that Cineworld is using the slowdown as an scapegoat.)
Cineworld Group, the second-largest theater chain in the world and owner of Regal Cinemas, cited the lack of wide releases in the third quarter, while warning of already lower admissions as of Aug. 16. “These lower levels of admissions are due to a limited film slate that is anticipated to continue until November 2022 and are expected to negatively impact trading and the group’s liquidity position in the near term.” The company said it was “evaluating various strategic options to both obtain additional liquidity” and later confirmed that it was considering filing for Chapter 11 bankruptcy protection due to the slowdown and its already strained debt load.
In August, there were four major wide releases, or films that opened in more than 2,000 locations, compared to eight in 2021 and 12 in 2019, according to analytics firm Comscore.
In response to Cineworld, AMC Theatres CEO Adam Aron, head of the largest theater chain in the world, also spoke of a “relatively weak” film slate in the third quarter, but said he was “quite optimistic” about demand in the last quarter of the year and in 2023.
That’s generally the position of many smaller theaters and chains across the country. And after the pandemic, which put many of the theaters out of operation for close to a year, this downturn is not as concerning.
“This is a slower than normal slow period, but it’s not a catastrophic crater,” said Tim League, executive chairman and founder of Alamo Drafthouse, which has more than 30 locations across the U.S.
Since theaters have reopened, attendance has been picking up across the industry, helped by the releases of films such as Top Gun: Maverick — now the No. 9 top-grossing film of all time with more than $1.4 billion global ticket sales — and Spider-Man: No Way Home, along with summer tentpoles including Minions: the Rise of Gru and Jurassic World Dominion. And on the indie side, the blockbuster film Everything Everywhere All at Once amazed with more than $68 million in ticket sales domestically. Theaters also have been able to capitalize on that upward swing, and many smaller venues were also supported by federal Shuttered Venue Operators Grants, which covered expenses for several months and helped build somewhat of a financial cushion for leaner months.
Cinemas traditionally budget for an expected fall downturn, but this year, some are taking additional steps to mitigate it. Jeff Brein, managing partner of Far Away Entertainment, which operates seven theaters in Western Washington, said he plans to reduce weekday show times and therefore, staffing levels more than usual for this time of year, in order to cut down on expenses. The weekend hours will remain the same.
“We don’t have much control over what the studios give us and when they give it to us. All we can do is control our operations and respond and react accordingly,” Brein said.
The reduced hours will kick in after Labor Day and last until the beginning of November, ahead of several wide releases. However, Brein said he’ll monitor the situation over the next few months and may return back to normal hours during that time period if demand is there.
Theaters are also leaning into more of their back catalogs and alternative content. Greg Laemmle, CEO of the Los-Angeles based Laemmle Theatres, said his theaters are extending specialty films that have been gaining momentum, such as Mrs. Harris Goes to Paris, the documentaries Hallelujah: Leonard Cohen, A Journey, A Song and Fire of Love, as well as the Bollywood film RRR, a title which Alamo Drafthouse also plans to extend due to the high level of interest at the theaters.
“We’re hoping to be creative and find ways to minimize the impact,” Laemmle said, noting that this short downturn is something his theaters can withstand.
Alamo Drafthouse is also planning to lean more into its indie slate, as well as its classic film repertory, which typically makes up 10 percent of its box office, but will now grow to make up for the shortfall in wide releases (Wide releases typically make up 70 percent of Alamo’s box office, while indie films make up 20 percent). The theater chain’s classic repertoire will include a deep dive into the films of Francis Ford Coppola at all of its theaters, with Triangle of Sadness slated as a major upcoming indie film.
Fathom Events has seen increased demand for its alternative content at the major theater chains, with Regal recently adding 150 locations for screenings of the 1982 film Star Trek II: The Wrath of Khan in early September. The re-releases of Spider-Man: No Way Home on Sept. 2 as well as a remastered Avatar on Sept. 23, could also help boost box office.
There’s a feeling among theater owners that some of the other upcoming films, while not wide releases, have the potential to become sleeper hits, or at least bring back audience members. Theaters have a particular eye to the September release of Don’t Worry Darling, starring Florence Pugh and Harry Styles, among other specialty films, many of whom are vying for a place in the awards space.
And October will heat up on in terms of high-profile studio releases with DC Comics film Black Adam and Ticket to Paradise, a romantic comedy starring Julia Roberts and George Clooney, among others.
The sum of these titles, rather than one big blockbuster, could help hold over theaters until the release of Black Panther: Wakanda Forever in November.
“If we’re looking for a $100 million opener, we have to wait ‘till November, but hopefully these movies will bridge the gap and collectively add a lot to the bottom line for theaters,” said Paul Dergarabedian, senior media analyst at Comscore.
With the expected return of patrons for the highly anticipated Black Panther sequel and then the expectation of higher numbers leading into the holidays, theater owners say they do not believe the fall blip will disrupt the improving trends of patrons returning to the theaters.
“I’m really not alarmed or losing a lot of sleep over the slate, as it is, for us and for the industry,” Brein said.
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