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Movie theaters bet on continued box office recovery
Sep 12, 2024
Doom and gloom has turned into hope that the movie theater industry can survive the aftermath of the pandemic and labor strikes.
Why it matters: The lack of consistent new movies and competition from streaming has created financial havoc for many of the major theater chains.
State of play: The stronger-than-expected finish to the summer movie season has led to cautious optimism, especially given how the summer started.
- Summer got off to a slow start, including the weakest Memorial Day weekend in nearly three decades, but the box office has rallied with a string of hits since.
- "Inside Out 2" became the highest-grossing animated movie ever, giving Pixar its first hit in years. "Deadpool & Wolverine" became the highest-grossing R-rated film ever and reenergized Marvel Studios.
- Films like "Twisters," "Longlegs" and "It Ends With Us" also overperformed.
- The third-quarter box office, which includes the strong debut of Tim Burton's "Beetlejuice" sequel setting September records last weekend, is now expected to come in above projections from research firm B. Riley.
Follow the money: A stronger box office is coming as most of the major theater chains are on better financial footing.
- Cinemark, the third-biggest theater chain in the U.S., has seen its stock more than double this year. Regal, whose parent Cineworld emerged out of bankruptcy, raised $250 million to upgrade more than 30 of its locations.
- Even AMC, which has flirted with bankruptcy, was able to restructure more than $2 billion of its debt.
- "AMC is probably the only one that has a little concern," B. Riley's Eric Wold tells Axios. "Being able to push out their debt maturities from '26 to '29 and '30 was a great lifeline."
Reality check: The box office still trails last year by almost 14%, and it's an open question if it can ever get back to the $10-billion-a-year industry it was before the COVID shutdowns.
- "Next summer will be a very clear window into where the industry is at compared to where we left off in 2019," Jeff Bock, senior box office analyst for Exhibitor Relations, says. "There will be no excuses."
- Wold argues, however, that the push toward more expensive premium viewing formats and cost-cutting measures can make up for declines. "They can get back to their pre-pandemic earnings and EBITDA, even if attendance isn't back in all the way back."
