Cineworld Announces Warner Bros Deal That Shortens Exclusivity
(Bloomberg) -- Cineworld Group Plc’s new, multiyear deal for AT&T Inc.’s Warner Bros. films dramatically shortens the time before theaters have to cede movies to home viewers, showing the growing strength of streaming services.
Cineworld theaters will have exclusivity for 45 days in the U.S. and 31 in the U.K., extended to 45 days for bigger films, the world’s second-biggest cinema chain said in a statement Tuesday. Rights for previous movies were generally longer than two months. The arrangement comes into effect from 2022.
“This cements an industrywide shortening of the window, a negative for exhibitors and reflecting of increased” risk from streaming and video-on-demand providers, analysts at Morgan Stanley said in a note on Tuesday. Similar deals are likely to follow, with Universal Studios Inc. demanding shorter windows from Cineworld’s peers, they said.
The London-based company also said it plans to re-open most of its theaters in the coming weeks after the coronavirus pandemic forced them to shut down for six months in October. Some U.S. cinemas will start to open on April 2 with the release of “Godzilla vs. Kong”, with more on April 16 alongside “Mortal Kombat.” It plans for British theaters to open in May, in line with government rules.
Cineworld closed its 536 Regal theaters in the U.S. and 127 British locations in October to conserve cash as social distancing measures made business harder and delays to blockbuster titles like the newest James Bond movie pushed income out of reach. It obtained a rescue loan from creditors the following month.
“With capacity restrictions expanding to 50% or more across most U.S. states, we will be able to operate profitably in our biggest markets,” said Chief Executive Officer Mooky Greidinger.
Cineworld’s U.S. Regal cinemas make up three quarters of its sales. The company says it will report full-year financial results on Thursday.
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