Cineworld brings down curtain on US, UK theaters; 45,000 jobs hit

Cineworld, the world's second-biggest cinema chain, will close its UK and US movie theaters this week, leaving as many as 45,000 workers unemployed for the foreseeable future as it fights to survive a coronavirus collapse in film-making and cinema-going.

The company said the reluctance of studios to go ahead with major releases such as the new James Bond film had left it no choice but to close all 536 Regal theaters in the US and its 127 Cineworld and Picturehouse theaters in the UK from Oct. 8.

Its statement follows a grim evaluation by ratings agency S&P's of rival AMC Entertainment on Friday which gave the US-based company six months unless it is able to raise more capital.

Cineworld's announcement on Monday detailed the scale of job losses from its move, which affects thousands of ancillary staff including cleaners and security as well as its own employees.

In an interview, Cineworld Chief Executive Mooky Greidinger said the closures were temporary, and he did not expect any locations to shutter permanently due to the pandemic. He said he saw mid-December as the "best-case scenario" for reopening but acknowledged it could be later.

The key, he said, is that authorities must allow theaters to open in New York and more widely in California. Studios have told cinema operators they will not release major films without those markets, he said.

Theaters need to know they will have a slate of new films to show for six to eight weeks after "Wonder Woman 1984," which is currently scheduled to open on Christmas.

"We need a clear lineup to follow," Greidinger said. "We will not take the risk again to (reopen) and there will be no movies afterward."

Shares, which have plummeted more than 80% this year, dropped as much as 60% to an all-time low within 10 minutes of the opening bell on Monday as Cineworld said it was looking at all ways of raising additional funds. The stock closed 36% lower.

The entertainment industry has been among the heaviest hit by social distancing and other restrictions, with Walt Disney last week announcing plans to lay off roughly 28,000 employees, mostly at its US theme parks.

Cineworld began reopening in July after virus-related restrictions started to ease. But release of the James Bond film "No Time To Die," which had been postponed from April to November, was pushed back further to April 2021. Delays with other films including Marvel's "Black Widow" have left the months ahead looking barren.

"Without these new releases, Cineworld cannot provide customers in both the US and the UK... with the breadth of strong commercial films necessary for them to consider coming back to theaters," it said.

While some cinemas in China, the world's second-largest movie market, have reopened, they too are hurt by a scarcity of major movies to draw consumers to watch on the big screen.

Studios have chosen to release some of this year's planned blockbusters on Netflix or the Disney+ streaming platform and have delayed others until 2021.

Vue cinemas boss Tim Richards told BBC Radio: "Our problem right now is we have no movies, and this was a big blow for us." "We are likely going to make it through. I'm concerned about the independents and the small regional operators right now that are going to really struggle, and when they close, they may not reopen."

Britain has slid into a fresh round of lockdowns and tightened social restrictions in the past month. Other major UK operator Odeon declined to comment in response to Reuters' questions about its moves in response to the crisis, while AMC did not reply to a request for comment.

"Although the delay of the latest 007 blockbuster prompted the decision, Bond isn't the villain in this piece," Hargreaves Lansdown analyst Susannah Streeter said.

"The spread of Covid-19 around the world has been a horror movie for the industry and the fresh wave of infections is the latest installment in what's been a devastating story for cinema chains."