As it stands, Cineworld has closed 23 of its theaters and has reached new agreements with around 25% of its landlords. But given that they operate thousands of screens, that is a relatively small percentage. Of note, last year, the company was granted access to special financing that can be used to help them restructure the business. The problem? They were already around $9 billion in debt at the time. So yes, the situation is dire and Isgur is probably right to want to see results, given the state of the company.
Cineworld’s bankruptcy attorney Josh Sussberg said that “The management team has made it clear time and time again it is willing to close additional theaters absent landlord engagement [so] we encourage everyone to come together.” The company is also running a sale process, which could lead to parts of the business being divested to interested parties. Rumors recently began circulating that AMC had talks about acquiring some of the chain’s theaters, though nothing came to pass. Isgur, speaking further, emphasized that the leadership needs to focus on making a business plan for the future, while acknowledging the challenges the industry is facing.
“[Make sure the restructuring plan] gets this right…gets the debt levels right, the footprint of locations right. To put the company on a path to success. We don’t want to take half measures here. It looks like this industry, more than most, is in a state of major flux and [that] would have occurred at some point with or without Covid. And people need to figure out what is the future of the industry. Guesswork by very smart people who are good at guessing. And we are not going to be in a world of certainty in this case.”
Uncertainty be damned, Cineworld has some tough choices to make, and they have to start making them fast.