Cinemark Sees Movie Theaters Slowly Reopening in July

(Bloomberg) --

The U.S. may start going back to the movies in July, though the experience will probably look different, according to Cinemark Holdings Inc., the country’s third-largest theater chain.

Cinemark, which closed all of its theaters in March to stem the spread of coronavirus, might start limited showings of older films in late June, executives said Wednesday on a call with investors. The company could widely reopen on July 1, with some restrictions for about three months, including empty seats between guests and limited hours.

“We would not be in a scenario where we would be inclined to bring back everything day one,” Chief Financial Officer Sean Gamble said. “It would be more a dip-our-toe type of approach.”

The chain is navigating a crisis unlike any that’s hit the entertainment industry, and is preserving cash in case theatergoers remain cautious about venturing back into the public. The company suspended its dividend, raised $250 million in a bond sale and laid off 17,500 hourly employees. Cinemark also cut executive pay and asked landlords for rent relief.

The company, which operates more than 6,100 screens, said it can survive with theaters closed until 2021, but management hopes audiences will start to feel comfortable at the cinema in time for some summer blockbusters. The reopening plans are based on statements from health officials and conversations with studios, the company said.

Cinemark still expects Warner Bros. to release the new Christopher Nolan action film “Tenet” on July 17, which will serve as a litmus test for the industry. The company also expects a big July 24 opening for Walt Disney Co.’s “Mulan,” which was originally scheduled for release in March.

“There clearly is a strong backlog of content building,” said Gamble.

Still, Cinemark will probably only allow theaters to be half full when audiences return. To space out customers, the chain plans to either halt advance sales of reserved seats or only sell every other seat in its auditoriums for indefinite period of time. Gamble said the company can still be profitable with social distancing rules because even in peak periods, its theaters are on average one-fifth to one-third full.

©2020 Bloomberg L.P.