Cineworld seeks to beat Covid-19 pandemic blues with Warner Bros deal

People enter a Cineworld cinema following the outbreak of the coronavirus disease near Manchester October 4, 2020. — Reuters pic
People enter a Cineworld cinema following the outbreak of the coronavirus disease near Manchester October 4, 2020. — Reuters pic

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LOS ANGELES, March 23 — US cinema chain Regal will reopen next month in time for big-budget release Godzilla vs. Kong, owner Cineworld said today, as it set out a deal to show Warner Bros films before they are made available for home streaming from 2022.

The world’s second-largest cinema group, whose reopening plans follow larger US rival AMC’s, said the multi-year deal with Warner Bros would let it show the studio’s movies in US cinemas with 45 days exclusivity, beginning next year.

AT&T-owned Warner Bros said in December that for 2021 it would release films at the same time to theatres and on its streaming service HBO Max.

Cineworld shares were down 7 per cent at 1100 GMT, however, with analysts noting the Warner Bros deal was still just half of the traditional 90-day exclusivity enjoyed by cinemas.

The deal is the latest sign of how cinemas and flourishing streaming platforms might co-exist in a post-pandemic world.

“This (Warner Bros) agreement shows the studio’s commitment to the theatrical business,” Cineworld CEO Mooky Greidinger said.

US-listed Cinemark signed a deal in November to allow Comcast-owned Universal Pictures to offer its movies to US homes as soon as 17 days after their theatre debut, while Universal has a similar agreement with AMC.

Limited capacity

With theatre capacity limits rising to 50 per cent or more across most US states, Cineworld will be able to operate profitably, Greidinger said.

However, brokerage Peel Hunt predicted a bumpy ride for cinemas.

“We expect leisure consumers will prioritise social activities over high-frequency cinema attendance,” it said, cutting its rating on Cineworld stock to ‘hold’ from ‘buy’.

Cineworld, which closed most of its nearly 800 sites last October, temporarily affecting 45,000 jobs, plans to reopen its UK cinemas in May, in line with government guidelines.

Analysts on average expect the company to post a US$1.29 billion (RM5.3 billion) loss for 2020, when it reports results on Thursday, according to per Eikon data. It made a profit of US$220.2 million in 2019. — Reuters

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