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UPDATE 5-Cineworld brings down curtain on U.S., UK theaters; 45,000 jobs hit

Mon, 5th Oct 2020 20:00

* Cineworld temporarily shuts all U.S., UK theaters

*

* 45,000 jobs to be affected

* All additional liquidity options being considered

* Shares plunge as much as 60% to a record low
(Adds CEO quotes)

By Muvija M and Yadarisa Shabong

Oct 5 (Reuters) - Cineworld, the world's
second-biggest cinema chain, will close its UK and U.S. movie
theaters this week, leaving as many as 45,000 workers unemployed
for the foreseeable future as it fights to survive a coronavirus
collapse in film-making and cinema-going.

The company said the reluctance of studios to go ahead with
major releases such as the new James Bond film had left it no
choice but to close all 536 Regal theaters in the U.S. and its
127 Cineworld and Picturehouse theaters in the UK from Oct. 8.

Its statement follows a grim evaluation by ratings agency
S&P's of rival AMC Entertainment on Friday which gave
the U.S.-based company six months unless it is able to raise
more capital.

Cineworld's announcement on Monday detailed the scale of job
losses from its move, which affects thousands of ancillary staff
including cleaners and security as well as its own employees.

In an interview, Cineworld Chief Executive Mooky Greidinger
said the closures were temporary, and he did not expect any
locations to shutter permanently due to the pandemic. He said he
saw mid-December as the "best-case scenario" for reopening but
acknowledged it could be later.

The key, he said, is that authorities must allow theaters to
open in New York and more widely in California. Studios have
told cinema operators they will not release major films without
those markets, he said.

Theaters need to know they will have a slate of new films to
show for six to eight weeks after "Wonder Woman 1984," which is
currently scheduled to open on Christmas.

"We need a clear lineup to follow," Greidinger said. "We
will not take the risk again to (reopen) and there will be no
movies afterward."

Shares, which have plummeted more than 80% this year,
dropped as much as 60% to an all-time low within 10 minutes of
the opening bell on Monday as Cineworld said it was looking at
all ways of raising additional funds. The stock closed 36%
lower.

The entertainment industry has been among the heaviest hit
by social distancing and other restrictions, with Walt Disney
last week announcing plans to lay off roughly 28,000
employees, mostly at its U.S. theme parks.

Cineworld began reopening in July after virus-related
restrictions started to ease. But release of the James Bond film
"No Time To Die," which had been postponed from April to
November, was pushed back further to April 2021. Delays with
other films including Marvel's "Black Widow" have left the
months ahead looking barren.

"Without these new releases, Cineworld cannot provide
customers in both the U.S. and the UK... with the breadth of
strong commercial films necessary for them to consider coming
back to theaters," it said.

While some cinemas in China, the world's second-largest
movie market, have reopened, they too are hurt by a scarcity of
major movies to draw consumers to watch on the big screen.
Studios have chosen to release some of this year's planned
blockbusters on Netflix or the Disney+ streaming platform and
have delayed others until 2021.

Vue cinemas boss Tim Richards told BBC Radio: "Our problem
right now is we have no movies, and this was a big blow for us."

"We are likely going to make it through. I'm concerned about
the independents and the small regional operators right now that
are going to really struggle, and when they close, they may not
reopen."

Britain has slid into a fresh round of lockdowns and
tightened social restrictions in the past month. Other major UK
operator Odeon declined to comment in response to Reuters'
questions about its moves in response to the crisis, while AMC
did not reply to a request for comment.

"Although the delay of the latest 007 blockbuster prompted
the decision, Bond isn't the villain in this piece," Hargreaves
Lansdown analyst Susannah Streeter said.

"The spread of COVID-19 around the world has been a horror
movie for the industry and the fresh wave of infections is the
latest installment in what's been a devastating story for cinema
chains."
(Reporting by Muvija M and Yadarisa Shabong in Bengaluru, Sarah
Young in London, Alicia Powell in New York and Lisa Richwine in
Los Angeles; Editing by Krishna Chandra Eluri, Patrick Graham,
Jan Harvey and Cynthia Osterman)

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