Cineworld thinks new Universal/AMC Theatre deal is bad for business

Last Updated on August 2, 2021

Universal Pictures and AMC Theatres may have made a new historic pact to shrink the theatrical window down to a mere 17 days but don't expect Cineworld to follow suit. Cineworld, which owns Regal Cinemas, won't be following in the footsteps of AMC Theatres, at least according to Cineworld CEO Mooky Greidinger.

Greidinger, who oversees the world’s second-largest chain, told "Deadline" that "We do not see any business sense in this model" in regards to Universal and AMC's agreement for a 17-day theatrical window for movies, with an option to go on PVOD thereafter:

While we don’t know the full details and we are always analyzing any move in the industry, we will analyze it. People need to be aware that the first big movie from Universal is coming only in six months so there is no pressure here. But we clearly see this as a wrong move at the wrong time. Clearly we are not changing our policy with regards to showing only movies that are respecting the theatrical window.

Cineworld's response really should come as no surprise considering it echoes their response back in April when Universal and AMC were publicly fighting about the theatrical to PVOD window. During that time Greidinger said, "We make it clear again that we will not be showing movies that fail to respect the windows." Cineworld not being down with this new deal is significant because they own Regal Cinemas, which is the second-largest chain in the U.S. with 7,155 screens in 542 theaters in 42 states. Overall, Cineworld operates in 10 countries with 787 sites, counting 9,500 screens. If anyone thought other theater chains would be hopping on board with AMC on this new business model, they were sorely mistaken. Cinemark has yet to comment on the new deal but I have a feeling they will be on the side of Cineworld and Regal Cinemas. Back in June, Cinemark CEO Mark Zoradi mentioned on an earnings call that "We’re open to talking with studio partners about alternatives we can consider" in regards to theatrical and PVOD windows but they also said that "The big movies, the ones that really count, these movies from a financial standpoint have to go theatrical. It’s a $40 billion-plus business. In fact, in 2019, it was $42 billion worldwide. And in some cases half, or more than half of the revenue stream on big theatrical movies is coming from worldwide theatrical. You can’t just cut that out and think the economics are going to work. And honestly, the studios recognize that. Disney clearly does, Warners does, and I think Universal does on their big movies. And that’s why movies like F9, Jurassic World: Dominion and Minions: The Rise of Gru, these are all going theatrical because they want that high per cap revenue that they get out of theatrical."

I figured that the other theater chains wouldn't be down with this deal and that it would be one exclusively struck between Universal Pictures and AMC Theatres. It will be interesting to see if the business model does end up working and it makes other chains change their mind on it but I have a feeling it will continue to be a bone of contention as theaters reopen and new releases started hitting the big screen.

Do YOU agree wth Cineworld about their deal being bad for business?