The latest Investing Matters Podcast episode featuring financial educator and author Jared Dillian has been released. Listen here.
Also is it just £10/month or is it
-£10/month Netflix
-£8/month Disney+
-£20/month NOW TV
-£10/month Prime
Etc etc
1. Cinema tickets are not £20 unless you’re spending £16 on a 4DX interactive and immersive ticket which cannot be replicated in the home
2. Monthly subscription services with cineworld are £10-15/month for unlimited movies
3. Peak demographic for cinema is 12-24 year old and likely living with parents who would ordinarily be paying for streaming services. No streaming services, desire to go out. Ergo go to the cinema to watch the latest blockbuster that seem to be reverting back to windows. Disney Thor 4, 45 days. Dr Strange 2, 65 days. Black Panther 2, 81 days.
JohnknowsNoTHing that was a very anecdotal post. You really know nothing other than speculation.
Similarly, I do not know for certain that Amazon will acquire CINE but I can assume they are a potential bidder, but I won't go as far as to say as to post that I can assure that a particular outcome will take place.
CINE have a month for various news outlets to hypothesise and I can only imagine we will be hearing of numerous rumours along the way that will drown out your one narrative.
Good post, WB.
"The international norm is to allow interest and other financing expenses to be deducted for tax purposes. In takeovers
and mergers, it has always been a crucial feature to ensure that the finance costs associated with the acquisition debt
qualify for tax relief."
https://www.cliffordchance.com/content/dam/cliffordchance/Feature_topics/PDFs/tax_and_global_M_and_A.pdf
I see it wanting to reach 4p next week but technical aside, it is all about the news stream and what we hear about bids, rumours etc
Did someone post earlier that there was $800m of tax write-offs Cineworld have?
Happy to be corrected and educated on how that can be extracted to maximise any aquisition.
More here https://www.consultancy.uk/news/33128/one-third-of-consumers-to-scale-back-streaming-subscriptions
This can only be encouraging for the return of traditional distribution formats like cinema, right?
Amazon or any suitor doesn't have to pay cash and settle the debt, it has to honour it - must like Cine did back in 2018/2019 when it acquired Regal and accumulated the $4bn of the $5bn debt it originally had (appreciating it has now increased to $6bn, minus lease commitments).
JohnknowsNoTHing is a very apt name for you :D
Back in 2020, Amazon and AMC were in talks.
I believe Amazon to be a strong candidate for a takeover of Cineworld.
Think about the opportunity for Prime customers, rewards, retail kiosks within cinemas, parcel pick-up and return facilities and upselling retail items.
No secret that Amazon has pledged to spend $1bn on theatrical movies each year - with that kind of investment, does it make sense to preserve full box office receipts rather than split with an exhibitioner? Particularly one that is actively looking for a buyer?
https://www.cnbc.com/2022/11/23/amazon-to-spend-1-billion-on-theatrical-releases-boosting-cinema-stocks.html
"Amazon is circling the troubled owner of Odeon Cinemas, The Mail on Sunday can reveal.
Sources said the online shopping and technology giant, run by billionaire Jeff Bezos, has run the rule over America's AMC Theatres, the world's largest cinema chain, which also owns Odeon in the UK.
The duo are thought to have held talks about a potential takeover of AMC by Amazon. However, it is not clear if the discussions are still active or if they will lead to a deal, sources said."
https://www.thisismoney.co.uk/money/markets/article-8303833/Could-Amazon-local-cinema.html
This could get interesting.
Hearing date moved from March 6th to April 13 2023.
We will begin to see streaming and television return to be an ancillary format.
Older catalogues and movies will be shown in it rather than premier or big budget.
So far Netflix is the only one doing that but with account sharing being blocked and price hikes they will see a growing churn rate.
Theatrical will always be used to absorb and recoup big budget but we are also seeing more modest movies particular horror doing well.
M3GAN, Smile etc all cheap low budget movies that have done 10x multipliers before landing on ancillary formats.
The projections looks strong.
1. Creed 3 is headed for an opening weekend in the $38 million to $40 million range. If Creed 3 opens to anything above $35.5 million, it would be a record-high debut for the Rocky franchise.
2. The early projections for the opening weekend of John Wick: Chapter 4 show the sequel pulling in a box office gross between $60 and $70 million, which would be the strongest opening of the entire franchise.
Safe to say, theatrical is back and booming.
Gradually audiences have been conditioned to return.
Top Gun Maverick and Avatar 2 have helped older demographics return.
All we can do is chat.
The numbers will do the talking.
Question is where will Cine be in this?
The later the better. Andrew Bailey is suggesting interest rates may have peaked. Too many macro market headwind to forecast accurately at this point.
The news is, underlying profit has doubled year on year.
This is a recovery and growth sector as more motorists are priced off the road and rail users switch to alternative modes of public transportation to commute.
I do agree that cross generational wealth will always exist. Look at Willy landing the Dutchy of Cornwall. Assets over £1bn and not a penny in inheritance tax to pay for them unlike us serfs.
But inheritance for the target demographic of cinema goers is not due for 30 years plus so they will always need to find an outlet to escape to.
Now Defence Secretary, Ben Wallace has openly stated the Ukraine war will last at least another year, if not longer, we are not going to see supply chain and inflation thwarted anytime soon.
@Wolf what I have posted is indeed speculative as I don't have enough data to confirm, neither of us do.
We will need to see the restructure plan, which I believe is due tomorrow now.
Not much longer to find out if there is something for existing shareholders or not.
The era of cheap credit is well and truly over. We had over a decade of cheap money which enabled cheap PCP lease deals for Audis and Mercedes for the working man. Inflated property prices which were offset with cheap mortgage deals. I see more moving back in with their parents or an entirely new generation and cinema demographic (Gen Z) staying with their parents a lot longer and wanting an out of the home experience. This is where I see the recovery path for cinema existing. When you are mooching off the parents, I imagine you have more disposable income and more willing to spend it on an out of the home experience.
The question that remains is will existing shareholders of Cineworld benefit to that or be wiped out entirely when the newCorp is stood-up?
@wolf
1. Yes it was a refinance earlier provided by Barc and HSBC.
2. It does not state that this was a personal loan and what the financing was earlier used for
3. The $213m convertible loan was quoted as being made up of a group of lenders Inc sand grove
Goldman Sachs hosted an invite-only call with a group of prospective investors to gauge interest in an upsize of Cineworld Group plc’s recently announced $213 million convertible bond due 2025, according to sources.
The convertible bond, announced yesterday, March 25, was provided by a group of investors including Centerbridge Partners and Sand Grove Capital Management, based on an inbound request they sent to the company, the sources added.
Cineworld declined to comment. Goldman Sachs, Sand Grove and Centerbridge did not immediately respond to requests for comment.
“Sand Grove Capital Management LLP ("Sand Grove") will refinance the secured corporate loan facility previously provided to GCT by Barclays Bank PLC and HSBC Bank PLC”
It clearly states corporate loan. I do not see reference to where this was a personal loan. It was used as capital to support business expenditure and investment/recovery.
That FT link merely highlighted the discrepancy between the holding companies.
Cineworld said the Greidinger family owns 276 million shares in the company. Of these, one million shares are owned by Global City Holdings BV and 275 million shares are owned by Global City Theatres BV, both of which are owned by trusts for the benefit of the children of Moshe Greidinger and Israel Greidinger.
However in its 2021 annual report, Cineworld stated that its largest shareholder is Dutch holding firm Global City Holdings, who only owns about 0.1% of the cinema operator's stock.
As for the short hedge, Sand Grove held or holds a 0.5% short position.
Sand Grove was one of the funds that provided the $213m credit facility with a maturity of 2025.