Cinemark CEO Criticizes AMC Release-Window Pact with Universal; Expects Company’s Box Office Results to Stabilize by 2022

Cinemark expects 2021 to be a “transition year”, with things to normalize the year after

Unlike its rival AMC Theatres, Cinemark is not on-board for narrowing the gap between theatrical exhibition and home video release. This comes on the heels of AMC’s pact with Universal to experiment with theatrical release windows as short as 17 days.

“We believe an exclusive theatrical window is critically important,” said the company’s CEO Mark Zoradi. “An aggressive shortened theatrical window could have an adverse impact on the mid- to tail-end of a film’s life.”

Zoradi says that Cinemark is open to talks with Universal and other studios about altering the theatrical release window. However, no details on those Cinemark-led discussions were given at this time.

Pact Details

The multi-year agreement between AMC and Universal would come with limitations. For instance, if Universal decides to release a film to video-on-demand at the 17-day mark, it would need to do so at the premium price (about $20) and hold to it for 90 days after the film’s initial theatrical release. In addition, the 17-day exclusivity won’t be a blanket strategy for every film. AMC and Universal can decide to alter the window depending on the lucrativeness of the title at hand. (Variety’s Brent Lang and Rebecca Rubin cite next year’s Jurassic World: Dominion and F9 as potential examples for such an extension.)

This is quite a turnaround from AMC’s original hardline for the theatrical release window – particularly with Universal, after the studio scrapped the theatrical release of Trolls World Tour and AMC banned Universal films in their venues.

Speculation around this deal is if AMC made it in response to seeing the writing on the wall. The theater chain has been in debt for years before the COVID-19 pandemic, and the prolonged closure has forced them to restructure their debt to avoid bankruptcy.

But AMC has faith in the public’s love of the moviegoing experience and is confident that this pact isn’t the death blow its critics are making it out to be.

“As people enjoy getting out of their homes, we believe the mystical escape and magical communal experience offered at our theaters will always be a compelling draw, including as it does our big screens, big sound and big seats,” lamented AMC CEO Adam Aron.

Cinemark Standings

Cinemark has been dealt its own financial hardships in the wake of the novel coronavirus pandemic. The shuttering of its locations throughout the U.S. has resulted in a net profit of only $9M for 2020, leading to a net loss of nearly $170M. They are also burning through their reserves at about $50M a month, a rate similar to their U.K.-based rivals Cineworld (and their U.S. branch, Regal Cinemas).

However, the company’s COO and CFO Sean Gamble says they have nearly $525M in cash balance that should get them “well into 2021” if necessary.

“…[But] we do not see that scenario as likely,” Gamble assured in the company’s earnings call. “[especially] based on how our industry is progressing toward a large-scale reopening,”

Prepping for the Future

Over the past few weekends, Cinemark has utilized “test-and-learn” reopenings at single locations staggered throughout the country. They’ve used these temporary openings to test new sanitation protocols (dubbed the “Cinemark Standard”) and monitor their effectiveness. They’ve also been measuring the returning customers’ responses to these protocols, which reportedly skew mostly positive.

Cinemark will use these tests as they prepare for a wider reopening on the weekend of August 21, 2020. The opening will still be staggered (only one-third of its venues per week) with the hopes of them all being open by September 3 for the stateside release of Tenet. Of course, this will also be dependent on the local jurisdictions and whether or not wider authorizations for the reopening of entertainment venues will be put in place.

Estimates suggest that the reopening rollout will accrue Cinemark a $10-12M one-time cost, while the maintenance of the Cinemark Standard will result in an additional monthly cost of $5M.

Zoradi is optimistic about the company’s near future, seeing the postponement of studio tentpoles to late 2020 and 2021 as an overall benefit.

“We think 2021 is more of a transition year, with really strong product coming from both ’20 and ’21, and ’22 is going to be the year where it more normalizes,” he said. “If we can do our job of convincing people that we have a safe and healthy environment, moms and dads are coming back with kids to enjoy an afternoon out.”

Leave your thoughts on Cinemark’s response to the AMC and Universal release window pact, as well as their own financial standing and reopening procedures (via Variety [1, 2] and Deadline) and this article below and in the comments section. Readers seeking to support this type of content can visit our Patreon Page and become one of FilmBook’s patrons. Readers seeking more movie news can visit our Movie News Page and our Movie News Twitter Page. Want up-to-the-minute notifications? FilmBook staff members publish articles by Email, Twitter, Instagram, Tumblr, Pinterest, and Flipboard.