Regal movie theaters in Anaheim Hills, Irvine and Calabasas will close later this month as owner Cineworld Group reorganizes the chain and its leases in bankruptcy court.
The London-based company filed a motion Sept. 7 in U.S. Bankruptcy Court in Texas, listing a total of 24 Cineworld-owned theaters set for closure as the company reorganizes its operations amid a severe slowdown in business.
The action allows the company to reject its leases at the properties. Locally, they include:
— Anaheim Hills 14, 8030 E. Santa Ana Canyon Road, Anaheim Hills (closing Thursday, Sept. 22)
— Westpark 8, 3735 Alton Parkway, Irvine (closing Thursday, Sept. 22)
— Calabasas Stadium 6, 4767 Commons Way, Calabasas (closing Friday, Sept. 30)
An industry erosion
The movie theater business has continued to erode as more and more consumers turn to Netflix, Hulu, Amazon Prime and other home-streaming services for entertainment — a trend was exacerbated by the COVID-19 pandemic.
“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 Chief Executive Mooky Greidinger said in a statement.
The company was forced to close its theaters worldwide during the early days of the pandemic. It reported losses of $2.7 billion in 2020, and $566 million in 2021.
Cineworld says it has secured $1.94 billion in new financing from existing lenders, which will ensure its operations continue during the reorganization. It expects to emerge from Chapter 11 during the first quarter of 2023, but it warned that shareholder investments will take a hit.
The bankruptcy will give the business a chance to renegotiate with its landlords in the U.S. and ask for better deals.
No. 2 in the world
Cineworld acquired Regal Entertainment Group (now Regal Cinemas) in 2018 for $3.6 billion, making it the second largest theater chain in the world, with more than 500 theaters across the U.S alone.
Cineworld’s website shows that, as of Dec. 31, it had 751 theaters worldwide, with 9,189 screens. They operate under several banners, including Regal, Cineworld, Cinema City, Yes Planet and Picturehouse.
AMC Theatres is the largest chain with more than 1,000 theaters worldwide and more than 11,000 screens, according to Zippia.
Greidinger said Cineworld’s bankruptcy is part of the company’s “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.”
A financial restructuring, he said, “is in the best interests of the group and its stakeholders, taken as a whole, in the long term.”
The Anaheim Hills 14-screen theater has been in operation since 1998 under a lease agreement between OTR and Edwards Theatres Circuit Inc.
Westpark 8 has operated since 1994 under a lease between Irvine Retail Properties Co. and Edwards Theatres Circuit. Calabasas Stadium 6 has been open since 1997 under a lease agreement between Century Investments Inc., CRM Properties Inc. and Edwards Megaplex Holdings LLC.
Other bankruptcy filings
Cineword isn’t the only theater chain to seek bankruptcy protection.
Last year, Pacific Theatres Exhibition Corp. opted to shutter all 16 of its ArcLight Cinemas and Pacific Theatres locations. The company filed for Chapter 7 bankruptcy to liqudate its remaining assets for its creditors, according to The Hollywood Reporter.
In its Chapter 7 filing, Pacific Theatres indicated it had liabilities of more than $69 million.
Leases to those theaters have since been picked up by larger chains, including Regal, which took over the ArcLight at the Sherman Oaks Galleria in 2021.
Austin-based Alamo Drafthouse also filed for bankruptcy protection, as well as Dallas-based Studio Movie Grill, although have since emerged from bankruptcy.
Laemmle Theatres a Los Angeles-based art-house cinema chain, has also given up leases to some of its properties.