You will be redirected back to your article in seconds

Regal loss flat for qtr.

Circuit holds red ink in check, eyes reorg

HOLLYWOOD — Regal Cinemas, which is working with entertainment entrepreneur Philip Anschutz on a pre-packaged bankruptcy reorganization filing, on Monday reported a roughly flat second-quarter loss as cost savings from theater shutdowns offset higher losses in continuing operations.

The Knoxville, Tenn.-based circuit posted $29 million in red ink for the latest quarter, compared to a $29.4 million loss in the same period last year.

Revenue rose 9% to $292.3 million, despite the shuttering of an unspecified number of venues over the last year. A $15 million gain on operating costs associated with the closed properties was roughly offset by increased operating expenses, with direct theater costs rising 7% to $238.3 million in the latest quarter.

Regal, owned since 1998 by investment firms Hicks, Muse, Tate & Furst and Kohlberg Kravis Roberts, reiterated concerns that debt pressures could cause a bankruptcy filing. Unofficially, it’s known that such a Chapter 11 filing is likely before Labor Day, with Anschutz expected to gain formal control of the circuit in subsequent court proceedings.

Anschutz and investment partner Oaktree Capital already control most Regal debt. Those holdings would convert to equity, an approach Anschutz used in taking over the United Artists Theaters chain earlier this year.

Price of expansion

UA, Regal and most other large exhibs are suffering the after-effects of an industrywide building binge of the last several years, which left circuits piled high with debt even as increased competish hampered their ability to meet obligations.

“The film exhibition industry continues to face severe financial challenges due primarily to the rapid building of state-of-the-art theater complexes that result in an unanticipated oversupply of screens,” Regal stated in a regulatory filing on second-quarter financial results. “The aggressive new build strategies generated significant competition in once stable markets and rendered many older theaters obsolete more rapidly than anticipated. This effect, together with the fact that the company leases many of these now obsolete theaters under long-term commitments, produced an oversupply of screens.”

Like other bankruptcy reorganization filers before it, Regal is expected to use Chapter 11 proceedings to accelerate the closure of many additional money-losing properties.

Popular on Variety

More Film

  • Slam

    Film Review: ‘Slam’

    The disappearance of a fearless female Palestinian-Australian slam poet triggers suspense and powerful social and political commentary in “Slam,” an outstanding slow-burn thriller by expat Indian filmmaker Partho Sen-Gupta (“Sunrise”). Starring Palestinian actor Adam Bakri (“Omar,” “Official Secrets”) as the missing woman’s conflicted brother, and leading Aussie performer Rachael Blake as a troubled cop, Opening [...]

  • Igo Kantor

    Igo Kantor, Producer and Post-Production Executive, Dies at 89

    Igo Kantor, whose Hollywood career took him from Howard Hughes’ projection room to supervising post-production on “Easy Rider” and producing B-movies like “Kingdom of the Spiders” and “Mutant,” died Oct. 15. He was 89. Kantor, who was born in Vienna and raised in Lisbon, met “Dillinger” director Max Nosseck on the ship to New York. [...]

  • The Lion King

    Average Movie Ticket Price Falls 4% in Third Quarter of 2019

    Average ticket prices for the third quarter have dropped 4% to $8.93, down from Q2’s $9.26, the National Association of Theatre Owners announced today. However, compared with the third quarter of 2018, ticket price has risen 1.1% from $8.83. The summer box office is down 2.13% from 2018, though the third quarter box office is [...]

  • Tilda Swinton to Preside Over The

    Tilda Swinton to Preside Over Marrakech Film Festival

    Tilda Swinton, the iconoclastic British actress and producer, is set to preside over the 18th edition of the Marrakech International Film Festival, succeeding to American director James Gray. Swinton, who won an Oscar and a BAFTA award for best supporting actress for “Michael Clayton,” has been leading an eclectic acting career. She has collaborated with [...]

  • The King Netflix

    Middleburg Film Festival Brings Hollywood to Virginia

    For the last seven years, audiences have flocked to the Middleburg Film Festival. Running October 17th – 21st, and situated in the wine-country hills of historic Middleburg, Virg., the festival usually highlights some of the year’s buzziest titles, and 2019 is no exception. “We’re a smaller festival with fewer overall screenings than other events, so we [...]

  • Kelly McCormick and David Leitch'Fast &

    'Wheelman' Director to Helm 'Versus' From David Leitch, Kelly McCormick (EXCLUSIVE)

    “Wheelman” director Jeremy Rush is in negotiations to helm the action movie “Versus,” with Kelly McCormick and David Leitch producing. Rush will direct the Universal movie from a script penned by “Three Musketeers” scribe Alex Litvak and “American Assassin” writer Mike Finch. Plot details are being kept under wraps, though it will follow the genre [...]

  • Taika Waititi Jojo Rabbit Premiere

    Why Director Taika Waititi Decided to Play Adolf Hitler in 'Jojo Rabbit'

    “Fox Searchlight blackmailed me into doing it,” Taika Waititi told Variety of playing Adolf Hilter in “Jojo Rabbit” at the film’s premiere at American Legion Post 43 on Tuesday night in Hollywood. Staying mum when asked which other actors had been on his wish list to play the role, Waititi explained why he eventually decided [...]

More From Our Brands

Access exclusive content