Axios Pro Exclusive Content

NATO chief: Movie theaters need more investment dollars

Apr 10, 2024
NATO CEO Michael O'Leary speaks on stage during Cinemacon in Las Vegas.

NATO CEO Michael O'Leary speaks on stage during CinemaCon in Las Vegas. Photo: Jerod Harris/Getty Images for CinemaCon.

CinemaCon kicked off its weeklong pep rally for the movie theater industry with a sobering message Tuesday: Theaters need to raise more money.

Why it matters: Audiences demand more than ever from their local theater, but budgets are strained after a three-year stretch that included pandemic-era closures and labor strikes.

State of play: Many theaters are in need of refurbishment and system upgrades, says Michael O'Leary, CEO of D.C.-based industry trade group National Association of Theater Owners.

  • "We're clearly going through a phase where, in order to meet consumer demand, we need to be more experiential, and there are costs associated with that," O'Leary told Tim during a press conference that followed his state of the industry address.
  • Theaters are also working to upgrade from digital projectors to laser.

Catch up quick: The two largest theater chains have been in financial turmoil ever since the pandemic hit.

  • Regal Cinemas owner Cineworld emerged from Chapter 11 bankruptcy last year as a private company with a smaller footprint.
  • AMC, the world's largest movie chain, faces continuing cash flow issues and bankruptcy fears stemming from its $4.5 billion debt load, despite raising tons of money during its memestock era.

Zoom out: The state of the box office continues to make life challenging for movie theaters.

  • Despite the Barbenheimer phenomenon, last year's box office was still kneecapped by the dual Hollywood strikes that resulted in numerous filming delays that are affecting the 2024 slate as well.
  • This year's box office is expected to reach $32.3 billion globally, according to film industry analytics firm Gower Street. That would be a 5% decline from last year, ending three straight years of gains.
Go deeper