New Bond Film’s Delayed Release Pushes Cineworld to Close its Doors Across the UK

Photo: REUTERS/Henry Nicholls

Cineworld to close its UK cinemas until Hollywood confirms a fuller release list that will attract audiences. Britain’s biggest cinema and the world’s second-largest cinema operator will announce the closure of its 128 cinemas in the UK and Ireland as well as 543 Regal cinemas in the US.

The group announced that they loss $1.6 billion (£1.3 billion) pre-tax across the first six months of this year. Cinemas reopened from August this year following the lockdown, yet the continual social distancing measures and delayed releases have aided in the drop in filmgoers.

The unexpected announcement that the anticipated No Time to Die 007 film will hit cinemas in April 2021, rather than 12 November, was a disappointment. Cinema operators hoped that the Bond film would help to revitalise and boost attendance.

Why does this matter?

5,500 jobs are at risk (with 30,000 worldwide taking into account its global cinema bases). The group claims that the majority of its UK staff will be asked to accept redundancy, with possible incentives to re-join in 2021 when they plan to hopefully reopen their doors.

Photo: Matthew Horwood

The decision was also taken in light of the relative lacklustre box office results from the highly anticipated sci-fi Tenet. However, it made £10 million in its second week in early September and was the seventh highest-grossing film of the year so far.

Therefore, with the postponed Bond film and the next big release to draw larger audiences will be Warner Bros’ Dune and Wonder Woman 1984 in late December, thus Cineworld bosses have decided it is best to keep their doors shut until next year.

The news coincides with the end of the government’s current furlough scheme on 31 October and increases the fears of the mass unemployment, which is predicted to rise to 3.5 million.

The growth of online streaming platforms

The popularity of streaming platforms like Disney+ has not helped the situation as it chose to premiere its highly anticipated films such as the live-action Mulan and the upcoming Onwards on its online platform.

These films can be enjoyed from the comfort of our homes and not subject to coronavirus pandemic restrictions.

“For some it is understandable concerns about the risks of COVID-19, but first it is about the lack of available films”.

Who does this affect?

(1) Cineworld workers: mass redundancies are unemployment is expected, with Cineworld planning to announce the details later this week. Some workers were brought back over the summer in the hope that the economy would bounce back but will now find themselves unemployed and uncertain as to when or if their jobs will return.

(2) The cinema industry: The other two large cinema theatre operators, the Odeon and Vue, have not commented on their cinemas. However, The Peckhamplex, an independent cinema operator in south-east London, notified customers last month that it would close its doors on 25 September due to poor sales. The Cinema Association estimates that 70% of the 150 smaller cinema operators that run 350 of the 800 cinemas theatres in the UK were open. The rest planned to reopen with the Bond film’s release. The delay could potentially lead to further closures and the 30% remaining shut. John Reiss, the chairman of the Peckhamplex, stated “[f]or some it is the understandable concerns about the risks of COVID-19, but first, it is about the lack of available films”.

(3) The UK recently heightened the social distancing rules to curb the rise in coronavirus cases across the country. The apparent U-turn has seen plans for workers to return to their offices paused and a return to working from home. Additionally, the current 10 pm curfew for restaurants and bars along with the biggest cinema closing down could force many to be confined to their homes, even without a formal lockdown. Likewise, the impact on the economic recovery will be further dampened as it means fewer incentives for the nation to go out and spend money.

(4) The failed acquisition. Cineworld cancelled its $2.3 billion acquisition of Canada’s Cineplex, which Cineworld withdrew from in June. Cineworld claimed that Cineplex breached terms within their contract, which said its debt should not exceed $725 million. Cineplex debt was reported to be $625 in February. Cineplex also claims that it has not breached terms and Cineworld has broken terms as it failed to comply with requirements to receive approval from the Canadian competition authorities.

The legal perspective

The proposed redundancies planned by Cineworld have been criticised by the Cineworld Action Group, ran by employees of the cinema. They claimed, there was “no consultation with staff whatsoever”. On Twitter the group posted, “[w]e have found out vital information about our jobs from the media throughout the pandemic. Workers have been left out of discussions that should've included our voices”. They also alleged that in March that some employees were sacked via scripted phone calls. Also, health and safety concerns were “consistently ignored”. Employees could raise claims against Cineworld for failing to follow redundancy procedures and not complying with the coronavirus safety rules. If those claims are substantiated, it could potentially make Cineworld liable to provide compensation to affected employees.

Regarding the Cineplex acquisition, both parties are set to litigate the matter. Cineplex started the litigation in July. It is not the only contentious court case as a result of the pandemic. LVMH and Tiffany will go to court in the US over the former reneging on the $16 billion acquisition of the latter.

This story is another blow to the UK’s economic recovery, further shows the deep-rooted consequences of the pandemic, the lockdown and recent restrictions on people and businesses. Although it is unfortunate to see Cineworld close its doors, it might be for the best if it helps to save the business and subsequently future jobs in the medium-term. It is unknown what the other major cinema providers will decide. Meanwhile, Cineworld and Cineplex will head to court over their failed acquisition; it will be interesting to see its result. However, let us remember that within the mist of the drawn-out legal battle will be ordinary people’s livelihoods at stake.