Cinemark CEO Mark Zoradi Sees CA Movie Theaters Reopening In 2 To 4 Weeks, Big Summer Releases Could Help “Light Up These Theaters Again”

Mark Zoradi, CEO of major exhibitor Cinemark and a former longtime Disney executive, sees some familiar elements on the summer release calendar, which he sees as a potential Covid-19 recovery turning point.

“The last weekend in May, in that traditional beginning of summer, you have Cruella from Disney and you have F9 from Universal and you have Infinite from Paramount,” he said. “So, you’ve got three big movies.” The July Fourth weekend, he added, has Minions and Top Gun: Maverick. “I expect both of those movies to be highly successful.

With studio commitments, declining infection rates and ramped-up vaccinations, he said, “We’re optimistic that we’re going to be able to light up these theaters again come this summer.”

Zoradi and COO and CFO Sean Gamble highlighted the various aspects of the initiative during a conference call with Wall Street analysts this morning. One obvious key is getting more theaters open again. New York City locations will reopen their doors next week, and Zoradi said he expects California to follow suit in the next two to four weeks. New York and LA together account for 15% of total domestic box office.

Before the call, the company reported fourth-quarter results that vividly illustrated the brutal toll of Covid-19. Total revenue of $98.2 million, down from $788.8 million in the same period a year earlier, with a diluted net loss of $2.03 per share, compared with a profit of 22 cents in the 2019 quarter.

A major topic during the call was a series of dramatic changes in theatrical release windows recently due to the industry’s increasing emphasis on streaming. Zoradi called out Paramount’s commitment to theatrical during the ViacomCBS showcase this week for rebranded streaming service Paramount+. Asked to project the impact of shifting windows on Cinemark’s results, he demurred, saying it is too early to tell, especially during a pandemic environment.

Asked about the viability of Cinemark booking films from non-traditional distributors like Netflix, Apple or Amazon, Zoradi said the company is in “active talks” with several of them. It conducted a series of tests with Netflix for films like The Christmas Chronicles 2, which had an abbreviated run on Cinemark screens a week before heading to streaming.

For all of 2020, total revenue plummeted to $686.3 million from a record of nearly $3.3 billion in 2019. Attendance for the full year was 54.3 million moviegoers, who paid an average ticket price was $6.57 and spent an average of $4.26 on concessions.

The circuit ended 2020 with 75% of its North American locations open, which was much higher than the industrywide level of 45%.

Zoradi said private watch parties — which enable customers to rent out entire auditoriums — accounted for 24% of attendance and box office in the fourth quarter. More than half of the films watched in these rentals were library content (especially holiday staple Elf). These films “could have been enjoyed on the couch at home,” Zoradi pointed out, but the fact that people wanted to experience them on the big screen attests to pent-up demand.

Perhaps the most encouraging statistic in the quarterly report was per-capita spending on concessions, which totaled $5.42, which Zoradi said was on par with the same period in 2019.

In the quarter, Cinemark said it benefited from shutdowns of rivals like Regal Cinemas and others, growing its share of total North American box office to 20% from 13% in the same period in 2019. Zoradi said the company will be pushing to retain as much of the “share-shift” as possible once all theaters are back up and running.

Gamble said Cinemark had a cash balance of $655.3 million at the end of 2020, and its cash burn of $65 million a month came in below the company’s previous estimate of $75 million.

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