Woman alone in cinema. Photo by Karen Zhao/Unsplash

John Sullivan makes “tough projections” for UK cinema

The impact of Covid-19 and social distancing measures has been devastating to the cinema industry. All screens are closed and income has reduced to zero. The industry is scrambling to establish what the future holds.

John Sullivan
John Sullivan
The cinema landlords I have spoken to are, on the whole, patient. In part this could be because of government legislation that prevents seizure of premises. Most of them also recognise that cinemas are purpose-built structures that have little other use. If cinemas globally are set to experience massive drops in income until both public confidence and film product return, then taking drastic measures against a tenant is not going to deliver landlords an improved position.

Landlords, tenants, bankers and government will need to come together on reopening plans and work out a solution, likely on a case-by-case basis, possibly with turnover-based rents being agreed.

The issue is not whether chains will reopen. They all have sites that are exceptional, others that are average and some that were struggling, and the likelihood is the struggling ones will not reopen. That could mean 20% to 30% of screens going dark.

However, it will be difficult to negotiate these closures as landlords will likely force the hand of the overall business operation. This will not benefit anyone and a compromise will need to be worked out.

When cinemas do reopen, it will probably be on the basis that social distancing regulations are applied. Measures may include blocking every alternate row of seats and every other seat. This will reduce capacity to 25% and have a dramatic impact on business…

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