Cineplex CEO: Theatrical at “Pivotal Point” in Post-Strike Recovery

Canadian exhibition giant Cineplex highlighted the significant impact of the 2023 actors and writers strikes on its Hollywood movie supply as it released its second quarter financial results on Friday.

Cineplex experienced a 30 percent drop in box office revenue to $114.5 million. Theater attendance in April and May was notably down by nearly 32 percent to 8.7 million moviegoers for the quarter. This decline was largely due to the post-strike disruption, which resulted in a reduced supply of new movie releases.

However, the box office saw a rebound in June, starting with the release of “Inside Out 2,” followed by the successful performances of “Despicable Me 4” and “Twisters.” Despite this late recovery, the prolonged impact of last year’s Los Angeles labor action had already made its mark.

As a result, Cineplex swung to a second-quarter loss of $21.4 million, compared to a profit of $176.5 million in the same period last year. Overall, revenue fell by 25 percent to $277.3 million.

Despite these challenges, Cineplex CEO Ellis Jacob expressed optimism, noting that the second quarter represented a turning point for the exhibition sector as the company gears up to open new venues. “We believe we’ve reached a pivotal point in the post-strike rebound, with a variety of content hitting the big screen on a consistent basis to keep movie-goers on the edge of their seats,” Jacob told analysts during a morning call in prepared remarks.

“The pipeline of blockbusters over the next several years is truly remarkable. This is a promising moment for our business and shareholders,” he added.

In the latest quarter, the box office revenue per patron rose to $13.11 compared to $12.84 from the previous year. Concession revenue per person also saw an increase, reaching $9.56, up from $9.21 in the same period last year. Both of these figures represented all-time records for the company.

Jacob emphasized that the rise in these key metrics demonstrates how consumers tend to opt for more affordable entertainment options like the local multiplex during economic downturns. “When we’ve been through recessions before, hard economic times, the actual spend of the guests increases and the attendance increases because they cut back on more expensive activities like concerts and sporting events, and movies are a nice form of reasonable entertainment for guests and their families,” he told The Hollywood Reporter.

Jacob also noted that the increase in per patron revenue was partly driven by movie-goers upgrading to premium theater offerings like Imax. He stressed that much of the company’s success depends on the quality of the movies shown in Cineplex theaters.

“I feel strongly and I’m very optimistic, based on the product coming up, and what we’ve had in July and August. ‘Deadpool’ was incredible,” Jacob said, referring to the opening box office success of Marvel Studios’ “Deadpool & Wolverine,” the third entry in the superhero series.