Is regal going out of business? Regal Cinemas (formerly Regal Entertainment Group) is a movie theater chain based in Knoxville, Tennessee. Regal, a subsidiary of Cineworld, operated the second-largest theater circuit in the United States, with over 7,200 screens in 549 theaters. Regal Entertainment Group operates three major theater brands: Regal Cinemas, Edwards Theatres, and United Artists Theatres. Regal Cinemas was founded in 1989 by Mike Campbell. Its first location was the Titusville Searstown Cinema. Regal began to expand quickly, opening larger cinemas in suburban areas. Many featured a “premium” cafe, later renamed Cafe Del Moro, and a more upscale appearance than typical theaters.
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Did Regal get bought out?
Cineworld, which purchased Regal in 2017 for approximately $4 billion in debt and approximately $2.3 billion in stock, declared bankruptcy with approximately $5 billion in debt. Its lenders keep the company afloat during the chapter 11 process and have a significant say in its post-bankruptcy future. Chapter 11 of the United States Bankruptcy Code (Title 11 of the United States Code) allows for reorganization under U.S. bankruptcy laws. This type of reorganization, known as “Chapter 11 bankruptcy,” is available to all businesses, whether they are organized as a corporation, partnership, or sole proprietorship, as well as to individuals. However, it is most commonly used by corporations.
Is Regal going out of business?
The Wall Street Journal reported in August 2022 that Cineworld would declare bankruptcy after struggling to rebuild attendance and incurring debts totaling more than $4.8 billion during the pandemic. Cineworld confirmed that Regal Cinemas would continue to operate while the company reviewed its financial strategies. Cineworld announced its Chapter 11 bankruptcy filing on September 7, 2022. Cineworld intends to emerge from Chapter 11 in the first quarter of 2023 and will pursue “a real estate optimization strategy,” including the closure or sale of theaters and other discussions with landlords about its cinema lease terms with Regal.
The Wall Street Journal reported on September 28, 2022, that Canadian exhibitor Cineplex was considering a merger with Regal; Cineworld attempted to acquire Cineplex in 2020 but was forced to pay US$1 billion in damages for breach of contract after backing out of the deal. The Ontario Superior Court of Justice denied Cineworld’s appeal after ruling in favor of Cineplex in the related legal dispute.
Regal cinemas seek bankruptcy protection
The London-based company announced that it and its subsidiaries had filed for bankruptcy in the United States Bankruptcy Court for the Southern District of Texas to reduce their debts. Cineworld said it had secured $1.94 billion in new financing from existing lenders to ensure operations continued during the restructuring. However, it warned that the debt restructuring would result in a “significant dilution” of shareholders’ investments.
In a statement, Cineworld Chief Executive Mooky Greidinger said, “The pandemic was a very challenging time for our business, with the forced shutdown of cinemas and tremendous disruption to film schedules that has led us to this point.” “This most recent procedure is part of our ongoing efforts to strengthen our financial position and is in pursuit of an economic contraction that will produce a more stable capital structure and a successful business,” continues.
The move represents a drastic retreat for the rapidly expanding Regal, which owns the Edwards and United Artists movie theater brands and has a long history of operating renowned theaters in Southern California.
Regal closes its 12 U.S. cinemas
It makes sense that Regal has closed 12 of its 542 theaters while parent company Cineworld remains in Chapter 11 bankruptcy.
The 12 closed Regal multiplexes are Anaheim Hills 14, Calabasas Stadium 6, Westpark 8 in the Los Angeles market; Crow Canyon Stadium 6 in the San Francisco area; the Broadway Faire in Fresno, CA; Richland Crossing Stadium in the Philadelphia area; Parkway Plaza Stadium 12 in the Seattle-Tacoma market; Greenville Grande Stadium in North Carolina; Middleburg Town Square Stadium 16 in Cleveland-Akron; Colonnade Stadium 14 in Las Vegas; Amarillo Star Stadium 14 in Texas and Sherwood Stadium 10 in Portland, OR.
According to sources, many of these theaters are older and run-down, and it’s not surprising to see them close. Given the upscale location, we hear an exhibitor may make a bid for the lease of Calabasas Stadium. AMC has been ecstatic. How does that sound? Caruso Management is the Calabasas Stadium 6 landlord, and they already work with the No. 1 exhibitor at The Grove in Los Angeles and The Americana in Glendale, CA.
It’s also worth noting that all of the closed venues are among the 20 leases Regal has rejected in its Chapter 11 filing. Even if leases are rejected in a Chapter 11 filing, Regal does not necessarily abandon the properties; they may still work out a deal with the landlord. A closed theater, however, is a closed theater.
Two highly anticipated remakes are set to hit theaters over the holidays: “Black Panther: Wakanda Forever” in November and “Avatar: The Way of the Water” in December. According to Comscore’s senior media analyst Paul Dergarabedian, holiday ticket sales should boost the year’s box office to $7 billion or $7.5 billion in the United States and Canada.
“This has been a difficult stage for Cineworld due to the unusual impact of the COVID-19 pandemic on our business and its slowing down and persisting disturbance to film schedules,” said Mooky Greidinger, CEO of Cineworld.