☀️Inside the Movie Theater stock market drama yesterday
ABC orders Milo Ventimiglia series / GOT Dragons set HBO record / Costner adds Luke Wilson to WB Western
Mornin! This is Sean McNulty and here’s the Hollywood + Media news to know on TUESDAY August 23, 2022.
Where a toast 🥂 goes out to WB and Baz Luhrmann for making “Elvis” his top grossing US pic ever yesterday. #SorryLeo (although “Gatsby” still has the King by about $80 Million globally).
Both the film and marketing campaign delivered the goods, making a real movie theater experience as hoped for, and overcoming questions from folks like yours truly about whether enough folks would show up for an “Elvis” pic in 2022.
Enjoy your well-deserved bonuses! 😁
IN THIS EDITION
A look at what’s behind the varying degrees Movie Theater chain stock dives right now - from mild to whoa, and what lies ahead for the rest of the year.
Francis Ford Coppola adds to cast of “Megalopolis”
PEACOCK is giving “The Resort” a NBC primetime shot
DISNEY+HOTSTAR gets a new leader, and more
📽 THE SILVER SCREEN
JUST 5 THINGS
DISNEYFOX sets Owen Teague (“It”) to play the lead primate in the “Planet of the Apes” reboot or continuation or whatever it’s gonna be from writer / director Wes Ball (“Maze Runner” pics). /Deadline
Frances Ford Coppola adds Aubrey Plaza to next pic “Megalopolis”, starring Adam Driver, Forest Whitaker, Laurence Fishburne and more. /Deadline
NETFLIX will premiere the “Knives Out” sequel on Fri Dec 23. Movie theater plan listed as “TBA”.
Kevin Costner adds Luke Wilson to his new Civil War-era Western pic “Horizons”, to be distributed by WB. Sienna Miller and Sam Worthington already on board. /Deadline
A24 sets Harris Dickinson (“Where The Crawdads Sing”) to star with Zac Efron in decades-long wrestling family dynasty pic “The Iron Claw”. Sean Durkin (“Martha Marcy May Marlene”) is directing. /Deadline
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📺 THE TV SET
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HBO gets 10 Million viewers for “House of the Dragons” premiere across platforms
Not that we need NIELSEN numbers when we have TIKTOK 👆 (so who’s gonna volunteer to stand outside that building at 9pm on Thurs Sept 1 btw? 👀#LOTR).
Biggest series premiere in HBO history. Although granted - also HBO’s first spin-off series to my recollection until someone embarrassingly emails me otherwise 🧐. “Entourage” and “Ballers” being spiritual bros at best.
No breakout of HBOMAX #s vs Linear numbers yet because… well now that wouldn’t get two days worth of free press now would it? /THR
Although I’m sure this is already more detail than we’ll get from AMAZON on “LOTR”… and this is where the whole “Dragons face-off” thing falls apart. I stand by this assessment:
Connected TV viewership counter SAMBA TV put the US streaming viewership at 2.6 Million accounts on Sunday. That’s only representative from their sampling of 3 Million households who watch via smart TV’s, does not include mobile, etc. /Deadline
ABC orders new Milo Ventimiglia drama “The Company You Keep” for midseason
Shades of “Out of Sight” - A con man & CIA agent have a super hot one night hookup that leads to the feels…🥰 but they’re unknowingly gonna interact professionally as well, as he looks to ramp up the family con biz so he can get out of it… and she closes in on the guy whom his family owes a lotta cash.
From showrunner Julia Cohen (”A Million Little Things”). /THR
ALSO IN TV
NBCU is airing PEACOCK series pilot for “The Resort” at 9p tomorrow night on NBC after the live-results “AGT” show. /THR
Juliana Margulies is returning for “The Morning Show” season 3 at APPLE TV+. /Variety
NETFLIX adds Debi Mazar to contemporary Greek mythology series “Kaos” with Jeff Goldblum (Zeus), Janet McTeer and David Thewlis. Debi is playing Medusa. Show is from Charlie Covell (“End of the F***ing World”) and now shooting. /Deadline
HULU adds Merritt Weaver & Michaela Watkins to “Tiny Beautiful Things” series based on Cheryl Strayed’s best seller. Kathryn Hahn already set to star. Liz Tigelaar (“Little Fires Everywhere”) is showrunning, Reese Witherspoon and Laura Dern are among the producers. /Deadline
FOX NEWS’s Streaming service FOX NATION is getting into the TV movie biz to provide a little something just for the ladies apparently. Launching 4 pics, starting on Sept 1. /THR
IN THE GLOBAL EXECUTIVE SUITE
DISNEY+HOTSTAR has a new leader - Sajith Sivanandan is coming over from GOOGLE after 15 years, where he led GOOGLE PAY and was a Managing Director. He’ll report into DISNEY Int’l Chairman Rebecca Campbell. /Deadline
💻 THE MEDIA BIZ
A bad day for the top 2 Movie Theater chain stocks…
Well two in particular, AMC (-41%) and of course CINEWORLD aka REGAL CINEMAS (-27%).
#3 chain CINEMARK was also -6% and IMAX -4%… but this is really a CINEWORLD problem. And it’s big.
AMC is essentially getting caught in collateral damage given its meme-stock investor base, but they still have their own set of issues #StockDilution
IS THE MOVIE THEATER BUSINESS OK?
OK? Yes. Great? No.
Remember no one turned a profit in Q2 even with “Top Gun”, “Jurassic World”, “Sonic 2” and plenty of other top performing pics so… that’s a problem.
And Q3 is gonna be is already very dark… and while the Anime pic was a nice small boost this weekend, Q3 will need some surprise hits to emerge in Sept to salvage something.
For context:
AMC THEATERS: 7600 screens, 600 theaters in US
LONG TERM DEBT: $5.4 Billion
Q2 LOSS: -$121 Million on Revenue of $1.2 Billion
OTHER:
US is about 80% of business, Int’l 20%
Had negative Q2 Cash Flow
REGAL CINEMAS (CINEWORLD): 7k screens, 530 theaters in US
LONG TERM DEBT: $5 Billion
OTHER:
Big UK presence (US is about 65% of biz, UK about 20%)
This is a UK company so their financial reporting schedules are different/no Q2 reporting specifically.
CINEMARK: 4400 screens, 320 theaters in US
LONG TERM DEBT: $2.5 Billion
Q2 LOSS: -$74 Million on $744 Million of Revenue
OTHER:
Q2 did have a decent one-time impairment charge altering profitability.
Had positive Q2 Cash Flow
Also has big Latin America presence, about 20% of their biz
IMAX: 360 US screens (but near 1600 globally)
Q2 REVENUE: $74 Million, LOSS: $3 Million
And then there are a handful of much smaller players domestically (MARCUS etc) and numerous independent cinemas of course.
OK IMAX and CINEMARK first
Their financial situations still look to be relatively fine to get them thru til Q4 (oh 👋 “Black Panther 2” and “Avatar 2” - although THANKSGIVING is looking a little 😯).
So traditional moviegoing headwinds exist but certainly will live another day, and IMAX had a good Summer.
SO WHAT’S AMC’S STORY
Well it depends on how closely you want to dive into the wacky world that AMC CEO Adam Aron has fostered (thankfully Bloomberg did that this week already).
As you probably know, it’s been an extremely volatile stock ever since it became a ‘meme stock’ (a la GAME STOP but not as insane) at the top of the pandemic.
So - shocks like the CINEWORLD situation can cause a lot of panic that… isn’t entirely related. CINEWORLD is a mess. AMC’s a circus.
Predicting AMC’s stock is a fool’s errand. It could easily catch fire further from the CINEWORLD embers and cause real damage here, but today’s carnage is likely contained for the moment. Likely.
But the bigger picture issue is that AMC has issued millions of shares in the past 2 years, so while the stock price is still healthy, it’s shareholder value is heavily diluted.
Analyst Rich Greenfield puts this succinctly, and in a uniquely Rich way of course:
Aron also issued something called an AMC “APE” stock yesterday, which is kinda like a bonus for his meme-stock fanboys… or a stock-split (aka further dilution) depending on your POV, but even I’m bored by this so I’ll leave it to CNBC to explain.
So their -42% drop was part due to this new APE stock issuance seen as a dilution of shareholder value, and part picking the absoulte worst day in 2022 to issue said stock with CINEWORLD saying bankruptcy is “possible”.
Overall, AMC THEATERS is still losing money, and has a horrible Q3 ahead like everyone, but there’s little reason to believe there is imminent danger here - save for anything insanely unforseen that comes from the meme-stock investor cult base that Aron has fostered.
OK SO… YEAH, ABOUT CINEWORLD / REGAL CINEMAS
Yeah this is grim. $CNNWF stock is trading at 4 cents. The market value is just $63 Million total.
If the stock keeps on falling double digit% a day… this fire sale will happen real quick and be ugly. Or well I guess uglier.
Either way, selling off or more likely closing low-performing theaters is a real possibility here, so some small US markets could lose their theaters. Many of whom likely contributed to making a movie like “Elvis” a hit this Summer.
But CINEWORLD’s severe issues are pretty much isolated to CINEWORLD… even when a bankruptcy / debt restructure / sale or new investor happens etc, REGAL will (very likely) live on… with some very worse for the experience investors in its wake.
But given its pure size, whatever form the company and its theaters emerge in… the US Movie Theater ownership will be decidedly altered when the savior 4th Quarter kicks into high gear.
TAKEAWAY
Q3 will continue to be terrible, we knew it would be terrible and CINEWORLD’s safety rope has just run out. But if big movie theater companies can’t turn a profit in Q4 (or come very close) then we really need to start talking.
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🏦 STOCK NOTES
Not great day all around
DISH -5% ($17.46)
PARAMOUNT -5% ($24.56)
NETFLIX -6% ($226.54)
AMC NETWORKS -7% ($26.16)
WBD -7% ($12.71)
ALTICE -7% ($9.90)
BUZZFEED -13% ($1.57)
👩💻 NEW TO WATCH:
“Top Gun: Maverick” now avail for Digital download purchase
🎥 TRAILER HOUSE
NETFLIX “Lou” movie trailer - Allison Janney goes all Liam Neeson on us as a woman with a mysterious past and a particular set of skills who’s living off the grid, when she’s enlisted by rural neighbor Jurnee Smolett to help find her daughter when she’s kidnapped… potentially leading to a much bigger secret. PREMIERES FRI SEPT 23
NETFLIX “Sheng Wang: Sweet and Juicy” comedy special trailer - Directed by Ali Wong, this trailer is all in one section/topic but - some good laughs here. PREMIERES TUE SEPT 6
NETFLIX “Love is Blind: After the Altar” Season 2 trailer - PREMIERES FRI SEPT 16
NETFLIX “The Anthrax Attacks” docu trailer - Reliving the early 2000s Anthrax in the mail adventures the country went thru about 20 years ago, along with some dramatic re-enactments of things.
A D’OH and a Clarification
🤦♂️ - “DC’s Secret Life of Pets” global gross so far is $130 Million, not $30 Million. Always helps to hit the ‘1’.
😬 - My phrasing wasn’t ideal in the OWN execs item yesterday - The scripted series future at OWN appears to be over, not at HARPO naturally.
🎧 PLAYING ME OFF
New MAISIE PETERS “Good Enough” - Yeah, think we’ve all been in dating situations like this at one point in our lives and had this realization. This is great. Tough, but great 👏.
If you need some new tunes:
Email me anytime at seanmcnultynyc@gmail.com or connect here on LINKED IN.
-SEAN MCNULTY
@theseanmac on TWITTER
@TheWakeupNews on INSTAGRAM
Nice rundown, as always.
"Either way, selling off or more likely closing low-performing theaters is a real possibility here, so some small US markets could lose their theaters. Many of whom likely contributed to making a movie like “Elvis” a hit this Summer."
It's basically a certainty that they'll sell off and close a number of theaters. Rather than smaller markets losing exposure entirely, seems like it will be focused on areas where there are just too many massive multiplexes on top of one another or just with difficult lease arrangements, including major markets.
Regal had already closed their Court Street (Brooklyn) location which was their 6th highest grossing location in 2019. They've got a location in Staten Island that's only running at about 40% of 2019 sales recently (while having multiple other locations in that area competing with a dominant AMC Dine-In and a newly opened Alamo Drafthouse).
If they handle their Chapter 11 well, they can come out of it stronger and more focused. Not sure how Cineworld's ongoing lawsuit with Cineplex will be affected, though. Once AMC's shenanigans can't sustain them any longer, they'll likely have to go through a similar process or at least close locations as well.
From a more optimistic lens, perhaps contracting to more reasonable location and screen counts can help them focus on quality and guest experience in the venues that remain. The industry needs them to succeed. Or maybe they'll just issues APES 2.0 and call it a day