feel like walking toward the podium and doing “à la Will Smith” and get rewarded after that, of course:)
3 Likes
Anybody can come with any upgrade on the current situation of CINE?
And what are you’re thoughts for the short/long term?
Many thanks 
With the debt they have and that debt is continually growing the writing is on the wall
In my opinion, Short term unless you are willing to invest a huge amount and then hope for a good day, then I would suggest there’s very little there in the way of prospects.
Medium/long term is harder to judge. The company is operating at a cash surplus, so is making profit now and covering costs,(Though these are rising like everywhere) but there are 2 or 3 things on the horizon that I think make predictions hard.
Firstly they still don’t appear to have a lot of working capitol/ready cash, hence trying to delay the 170USD owed to regal shareholders.
Then they have (And I could be slightly wrong on this, I don’t have 100% accurate info) I believe, 2 credit/loans/overdrafts that are due to mature/be repaid in the next 18 months or so, which would need settling or renegotiating, I’m not sure how much for in total, but enough that they are considered likely to default if they can’t renegotiate these terms.
Then, they have this massive Cineplex fine/Court appeal to deal with. Which is the thing really holding them back.
If, (in bold letters) they can increase cash holdings, renegotiate the debts due and win their appeal on the cineplex deal, then you would expect decent growth while the company continues to make profit.
A lot of the debt is long term and tied to leases and agreed loans, so is only an issue when it can’t be serviced.
Currently the whole company is valued at around £400m, which I’m surprised isn’t at least being looked at for a more hostile takeover by a larger company. An Apple, Disney or Amazon could swallow the debt in months and have access to the the second biggest exhibitor in the world.
4 Likes
With the recent drop in streaming subscribers, especially with Netflix loosening 1m in the last quarter.
I believe it could turn out to be positive news for the movie theatre business…
That sounds like wishful thinking/confirmation bias.
If people cancel because £10 is too expensive for thousands of films and series, they won’t pay more to see a single film.
If people cancel because they don’t find anything interesting to see, they will have watched the interesting new films in theatres before as well.
5 Likes
well said and money getting tighter so £10 for Netflix will go towards something else no doubt or cutting back in general
Cineworld barely made money before the pandemic, they’ve loaded up with debt and now look like they’ll make less.
They need a reboot of what going to the cinema is, it needs to be an experience. Of the time spent I. The cinema’s 95% is monetizable ie the film. Adding restaurants that serve themed food to the latest film is an example of extending someone’s stay and providing a service they’re likely to be doing elsewhere.
2 Likes
There are other factors too which I probably failed to say due to lack of time.
During pandemic, there was huge optimism for streaming services and not so much for theatre that new films will be released much quicker to streaming platforms, people did not want to gather in crowds. At that time, all these bad news was priced in for the share price to go lower.
Now it’s a different story - blockbuster movies are not being released that quickly to streaming platforms, on the top of that there are so many movies I would personally watch in theatre first over streaming. Movies like Dune, 1917, Top Gun. for 90% of the movie watching audience, they just don’t get the same experience at home compared with cinema.
So times are changing now and people are happy to collect in a crowded room to watch. If it was last year I would have agreed with you.
2 Likes
I think people sometimes confuse the fact that streaming and cinema, despite appearing very similar are in fact very different industries, with completely different business models and what makes one successful doesn’t necessarily impact the other (Of course at times it also does but understanding why is more nuanced).
Cinemas are, in general, significantly more profitable than restaurants and cafes, so while those industry sectors are able to continue trading then there will be a future for cinema in some form.
Cineworlds financial performance was actually very good in 2019 and due to improve significantly had covid not hit as the synergy’s from the Regal takeover were still coming online.
It’s also clear in this day and age that a share price doesn’t always reflect a businesses actual financial performance or future viability and ‘amateur’ investors such as ourselves (General assumption, I obviously don’t know anyone) are more likely to make decisions informed on superficial assumptions which will in turn cause more volatile prices, especially as there are now more of us!
None of this makes Cineworld any less of a risk to invest in than people clearly believe it is right now, but the reasoning should not be put down to headlines about streaming.
2 Likes
Its hard to ignore the two as a separate business, because back in 2020 and the major part of 2021, the rise of streaming was one of the major factor in decline of share price for the theatre business.
Many who were betting against the stock were sold on this fact that no one will turn up to the cinema because we have streaming services and most people will enjoy cinema from home. I am happy that this is not the case anymore.
I partially agree, over next three years patterns will emerge and we will learn how these two are working together, and maybe at that time, it will be a good time to see both business from different lens, for now… it can’t be overlooked.
1 Like
Sorry, but this make no sense.
2020 and 2021 were years of a global pandemic, nothing to do with switches in preference for streaming vs. theatres.
People were literally not allowed to visit theatres for a significant part of each year.
The whole cinema industry had large problems before the pandemic already. They are so indebted now that this investment has almost no possible upside.
4 Likes
sorry to suggest this, but a quick google search on “cinema vs streaming” will give a much better insight than I could type here. You will probably observe articles written back in those hard times and how the tones have changed recently.
1 Like
Ignoring the amounts of confirmation bias occurring, I can’t add too much to others good posts, but will highlight something that I saw a little while ago
The thing mentioned earlier about films not being released to streaming platforms quickly is somewhat incorrect, the theatrical window has been getting shortened for decades and is now down to less than 6 weeks in a lot of cases compared to 6 months in the past, this shortens the timeframe that cinemas can make revenue/profits during an exclusivity period - Why movie theaters aren't dead yet - YouTube
It’s entirely correct as mentioned above that streaming isn’t a sole cause for the woes, it might be better framed as “technological advancement” (DVDs, Blu-ray, VOD and Streaming) has severely impacted cinema businesses ability to generate revenue/profit alongside the reduced theatrical window
I don’t think they’ll necessarily go away as companies (or at least not all of them), but it might end up with lots of consolidation and reductions in locations and some reframing of the “experience”
3 Likes
I bring your attention to Top Gun Maverick.
This has a 120 day cinema only release and that was a great decision.
Crowds are still flocking to see it. Making loads of money.
Movie studios will see this. Next thing you know all big movies will have the same window.
The entire industry is very fluid since the pandemic. But it is starting to find its feet again
1 Like
And what pricing power do Cineworld have? The movie companies would own their own cinemas if they felt there was any value in it. They don’t because they set the price and Cineworld can’t negotiate.
A quick search also tells us that it’s looking like it’s shortened to 90 days with a VOD listing
Sounds like Tom Cruise has a bit of say in the exclusivity period.
Cineworld themselves acknowledged (under heading - Industry fundamentals and respect for the theatrical window) -
In 2022, we anticipate movies will be released with windows that are anywhere between 20 to 60 days and subject to each movie’s potential. - London Stock Exchange | London Stock Exchange
The fact that the film studios are able to modify this exclusivity period/theatrical window (presumably with some form of penalty/penalties or maybe none at all, not read too much into this) as they have done shows you who holds the pricing power
2 Likes
if i may interject something in this group discussion. I like cinemas and i used to like Cineworld a lot; not so much now. If they change their board members and change strategy; who knows. To get back to earlier points: it is only very recently; that film studios can buy cinemas in the US at least. Food for thought.
4 Likes
