Exhib eyes reorg as UA takes over NY leases
NEW YORK — Ailing Regal Cinemas, the nation’s largest exhib, has pulled out of the Gotham market into which it had entered with much fanare a year ago.
The exhib has extricated itself from a handful of leases that have been taken up by smaller competitor United Artists. The theaters include a state-of-the-art multiplex in Battery Park City in Manhattan as well as locations in Astoria, Queens; Brooklyn; and North Bergen, N.J. Three of the locations were built about a year ago. The Astoria theater is slightly older.
“We worked out a mutually agreed upon lease termination with our landlord” — in this case, big New York developer Forest City Ratner — said Regal spokesman Dick Westerling. Move is part of an ongoing restructuring as Regal and other exhibs seek to cut costs and pare down their screen totals.
“New York is an important market to us, and we wanted to continue to focus on the five boroughs,” UA topper Kurt Hall told Daily Variety. UA’s Gotham properties include the high grossing United Artists Union Square.
As the exhibition biz has buckled under crushing debt and red ink, theater owners have focused on ways to rid themselves of leases on underperforming locations. Landlords, as in this case, will turn the leases over to other exhibitors who feel they can run a location more profitably.
In other instances, landlords may avoid long-term leases in favor of short-term agreements, taking a cut of the revenue as they explore other uses for a property.
In any case, Regal and UA may soon be part of the same family.
Regal is reportedly working with entertainment entrepreneur Philip Anschutz on a pre-packaged bankruptcy reorganization filing. Anschutz took control of UA earlier this year and has also snapped up several other exhibitors.
Regal is expected to file for Chapter 11 bankruptcy before Labor Day, with Anschutz likely to gain formal control of the circuit in subsequent court proceedings.