With the closure of movie theaters nationwide out of safety during the coronavirus, layoffs have been rampant, however, the big three exhibitors have been contending with these atrocious times in varying degrees of severity.
Word began to spread last week among distribution folks that Regal had been the most acerbic out of the three chains in the wake of shuttering its 542 sites in 42 states last Tuesday, furloughing an estimated 24K of its 25K employees including both cinemas staffers and corporate film buyers as well. Essentially, Deadline heard Regal staffers received no pay, and one month of COBRA, with sources painting a similar scenario to what went on with Regal’s parent company Cineworld in its handling of UK staff which entailed those with less than 18 months of service receiving no pay, and those at three years of service or more landing 40% of their pay.
Similar to those Cineworld employees who issued a public note to the chain’s boss Mooky Greidinger, condemning the exhibitor for the massive layoff, a Change.org petition sprouted up demanding that Regal pay its employees during the crisis; their accusation being that the chain let them go without any disaster relief pay, which was specifically outlined in their employee manuals. You can see the details below. Regal had no comment on the situation. The petition counts around 8,5K signatures.
In response to the loss of its stateside staff, Regal is partnering with grocery store chain Albertsons, which is looking to hire over 30K employees nationwide. The chain will reportedly be waiving the interview process for furloughed Regal employees so as to conduct a swift hire for all applicants. In addition, Regal, like many other exhibitors, continues to work with the National Association of Theatre Owners to lobby Congress so that they’re included in the the federal aid package. The chain is reportedly working on additional financial aid opportunities for its furloughed employees.
By comparison, we hear Cinemark was far less severe in their handling of layoffs, furloughing hourly theater employees at 345 locations, but not corporate. Returning employees will have to reapply. While Cinemark did not confirm, Deadline heard those let go received two weeks pay (as opposed to no pay), use of vacation days and one month of COBRA.
AMC Entertainment, I hear, has furloughed 26K of its 27K employees, with a big question surrounding corporate staff. In a CNBC interview last Thursday, AMC chief Adam Aron said “We’re paying them as much as we can possibly afford to pay them. For those in the health plan, we’re keeping them in the health plan with their benefits active for the full time that we’re shut. But my focus is as much making sure there’s a company for them to come back to…I’d like to make sure that this company, which has been strong for 100 years, stays strong.”
NATO boss John Fithian told Deadline on Sunday that exhibition will be deemed a distressed industry by the U.S. Treasury and that exhibitors will be able to take part in the $2 Trillion stimulus package in regards to “loan guarantees from the federal government” which will enable movie theaters, both and big and small, to survive the coronavirus economic drought. The financial burden of exhibition remains their fixed costs and financial obligations during a time when there’s no revenue coming in.
As the Hollywood and Wall Street asses the survival prospects of exhibition in a no-revenue world, entertainment analyst Eric Handler – after a close look at the balance sheets – sees Imax best positioned, able to go for over 10 months with its cash on hand and starting to benefit from China’s nascent recovery. AMC Entertainment looks pretty strapped, with only about four months of liquidity plus lines of credit. In-theater advertising firm National CineMedia also has average average debt but – like Imax – doesn’t have to pay rents, which alleviates a lot of financial pressure. Cinemark is also better positioned than AMC to withstand months of shuttered theaters. With $488M of cash on hand and another $100M available through its credit line, Handler estimates the chain has more than six months of liquidity without having to go through any dramatic efforts to dig for additional capital. Handler said AMC has a total of about $600M and runs through it at the rate of about $155M a month.
Handler said he factored in some portion of fixed salaries in his model – but not much for compensation to theater workers once theaters close. However, his calculations didn’t include any government bailout. A shot of liquidity to see it through would be part of the massive aid package currently being debated in Congress.