Cinemex Holdings USA, the parent company that controls CMX Cinemas, has filed for bankruptcy. This comes as movie theaters in the U.S. have been shut down for weeks with little hope of having mass re-openings in the immediate future. Though, some states have been testing the water in terms of getting things back up and running. But CMX couldn’t hold out and is now facing an uncertain future.
CMX Cinemas operates 40 theaters throughout the U.S. with locations in Florida, Georgia, Illinois and one in New York. The company had been negotiating with its creditors in an attempt to reduce fixed costs during the shutdown, to no avail. With that, Cinemex Holdings USA was forced to file for Chapter 11 bankruptcy. In a statement, CMX had this to say.
“We are in a state of complete uncertainty as to when we can re-open our theaters and when our customers will feel safe and secure in returning to them…We cannot forecast when, if ever, customer numbers will return to pre-crisis levels.”
The concern right now within the industry is whether or not people will return to movie theaters like they used to before the current situation at hand unfolded. Will they feel safe enough? Will people have gotten so used to watching movies at home that they don’t feel the need to go to a theater anymore? It is difficult to say what the future holds but, at the very least, there will be a long period of adjustment for exhibitors.
Things have gotten a little ugly in the meantime. Studios have started releasing new movies on premium VOD to generate revenue. Universal Pictures’ Trolls World Tour did exceedingly well, with the studio saying they intend to do more premium VOD releases in the future. That led AMC Theatres, the largest chain in the country, to say they won’t be showing any Universal movies in the future. CMX further explained that they feel the relationship between studios and exhibitors will need to change going forward to make things work for both sides.
“The studios will continue to need the revenues and publicity generated by theater companies notwithstanding digital distribution, and mall landlords will become even more reliant on movie theaters as retailers continue to migrate to the internet. A viable rebalancing would result in (1) studios getting a maximum of 40 percent of theater companies’ revenues; and (2) mall landlords providing the same terms to movie theaters that they currently provide to anchor tenants such as department stores. Movie theaters are increasingly the anchor tenants and landlords should treat them as such.”
As it stands, studios keep anywhere between 50 to 65 percent of ticket revenue. CMX is suggesting they take a significantly smaller cut to help keep theaters afloat. Before the shutdown, CMX had been looking to acquire Star Cinema Grill, which operates 11 locations and is based out of Houston. The deal would have made them the seventh-largest chain in the U.S. This news was previously reported by The Wrap.