Cineworld is now considering bankruptcy
Cineworld, a US cinema chain currently struggling with $5bn worth of debt, has confirmed that it is considering filing for bankruptcy in the US. The Picturehouse chain-owner has insisted that its cinemas will remain “open for business” and that there will be “no significant impact” on the jobs of its 28,000 employees worldwide.
So why is Cineworld suffering? Like many other cinema chains, it was hit especially hard by the Covid-19 pandemic, which forced many theatres to close their doors during the lockdowns and allow fewer customers to buy tickets when they were then reopened.
Chains like Cineworld hoped that blockbusters like Thor: Love & Thunder, Top Gun: Maverick and the latest James Bond movie would mark a return of audiences to pre-pandemic levels. Unfortunately, the company has said that it is still struggling to attract audiences and that this is greatly impacting admissions. 2022 box office earnings are currently down a third compared to 2019.
Another important factor is the competition cinemas have been facing from streaming services like Netflix, which saw a boom in business over the pandemic. Recently, of course, Netflix has been reporting a continuous fall in subscribers as the cost of living crisis continues to force people to cut back on non-vital expenditures.
Cineworld shares recently fell by 60% after The Wall Street Journal announced that the firm was looking to file for bankruptcy “within weeks”, though the company later said that it was looking at options for how to restructure the business. At the time, Cineworld would not clarify if it had plans to file for bankruptcy or shed light on how such a decision would affect its employees.
In a recent statement, the company wrote: “Cineworld would expect to maintain its operations in the ordinary course until and following any filing and ultimately to continue its business over the longer term with no significant impact upon its employees.” Cineworld currently has 128 cinemas in the UK and Ireland, with 9,186 screens in more than 750 locations across the globe.
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