Cineplex Shrinks First-Quarter Loss Amid Box Office Recovery
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Cineplex CEO Ellis Jacob doesn’t see Hollywood studios returning to releasing tentpoles in cinemas and in the home on the same day anytime soon.
“I would say all the studios are pretty well there as far as saying, even if we have streaming content, we are better off releasing it theatrically,” Jacob told The Hollywood Reporter after returning from CinemaCon in Las Vegas.
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Following the release of Cineplex’s first-quarter financial results Friday, with a shrunken loss and a surge in theatrical revenue for his Canadian theaters, Jacob said the major studios’ experiment with day-and-date releases to grow their streaming services had been overtaken by their traditional embrace of the exclusive theatrical window.
“We’re the engine that drives the trains. So it helps the studios and maximizes their profits and Disney said that yesterday when they released their results,” he added. And the multiplex has continuing appeal for moviegoers as they return to cinema screens as the pandemic wanes.
“How do people remember content? It’s because of the theaters. You don’t talk about movies that are watched when you stream them,” Jacob argued. During its latest financial quarter Cineplex saw a box office rebound for its Canadian movie theaters as patrons flocked to see The Batman and Spider-Man: No Way Home.
Cineplex more than halved its first-quarter loss at $42.2 million in its latest quarter, compared to a year-earlier loss of $89.7 million. And overall revenue jumped 450 percent to $2,28.7 million, against $41.4 million in the same period of 2021.
The cinema giant saw first-quarter theater attendance soar to 6.7 million, compared with a year-earlier 415,000 patrons when Cineplex faced widespread cinema closures and capacity restrictions in response to the COVID-19 crisis.
As Hollywood increased its tentpole releases, box office revenue per patron increased 30 percent to $12, against $9.20 in 2021, as guests embraced premium screens with higher ticket prices during the latest financial quarter. And concession revenue per patron hit $8.82, up 44 percent from $6.12 in the year-ago period when Cineplex relied on discounting ticket pricing and classic films to draw moviegoers to the local cineplex.
Jacob on a morning post-earnings release call with analysts touted a strong Hollywood tentpole pipeline for the rest of the year, including Tom Cruise’s Top Gun: Maverick and the Avatar: The Way of Water sequel in 3D, as evidence of a continuing box office rebound for 2022 and into next year.
He said last weekend’s opening on Cineplex screens for Marvel Studios’ Doctor Strange in the Multiverse of Madness was the company’s sixth largest ever. “We achieved 125 percent of the comparable box office period in 2019,” Ellis added as he underlined how families were returning to the multiplex in increasing numbers for films like Sonic the Hedgehog 2 and the adventure comedy The Bad Guys.
The Cineplex chief also updated investors on the favorable ruling from an Ontario court over a breach of contract lawsuit brought against Regal owner Cineworld Group PLC. Jacob said the Regal owner’s appeal of the Canadian court decision — which includes awarded damages of $1.236 billion in lost synergies from an abandoned takeover deal and $5.5 million in transaction costs — will be heard Oct. 12 and Oct. 13.
And after Cineplex played the finale episode of HBO’s Game of Thrones at selected cinemas in 2019, Jacob said his company is holding talks with streaming platforms about showing more series on its big screens as part of its event cinema initiatives.
