Imax Corp. Chief Financial Officer Natasha Fernandes said the company is “not as exposed” as other Cineworld business partners to the bankruptcy filing of parent company Regal Cinemas.
The world number 2 exhibitor made the long-awaited move this morning, citing the impact of Covid on his business.
Speaking at the 2022 Bank of America Media, Communications and Entertainment Conference, Fernandes credited the nature of the leasing deals, as well as Imax’s presence in top-grossing markets. “Imax has a great long-standing partnership” with Cineworld, he said, and “we have a strong cash position and a flexible business model, so we can maneuver and navigate changes in the exhibition landscape.”
Imax theaters operate under a master lease, he continued. “What that means is that we don’t have unique deals for every screen. We have an agreement that governs them all. … You’re not as exposed from that perspective.”
As for the way forward for Cineworld, he said, the bankruptcy process will allow the exhibitor to “clean up its balance sheet and move forward and continue operating in the future. So if they are going to operate, they are going to operate the best complexes. So, [they will] clean up underperforming complexes and sell them or do something with them. But that’s not where the Imax screens are – all the Imax screens are at the higher performing complexes.”
Heather Anthony Boyriven, director of business transformation for Imax, appeared on stage with Fernandes. When she was asked how the company defines itself in the post-Covid market, the executive said: “We still see ourselves as the most immersive cinematic experience in the world. That’s who we are and that’s what we focus on”, not only in large format auditoriums, but also in cameras and other technologies used in film making and exhibitions.
Pressed by inflationary pressure and how the company’s premium price offerings will fare in the future, Fernandes said box office receipts have grown for the past seven consecutive recessions. In 2008, in the midst of the global financial crisis, Imax experienced the most significant growth in its history. “When you think about the disposable income of moviegoers, they are going to eliminate vacations, sporting events, concerts. But they won’t necessarily cut a movie, because a movie is still within the limits of affordability. They will still want to go out and experience something.”
After Fernandes touted releases in the fourth quarter, especially the long-awaited sequel to James Cameron’s Avatar, he also acknowledged a high degree of uncertainty about which films Chinese government officials would allow to screen in the country. “We hope it comes in,” she said. However, as coverage and a long-term strategic adaptation, Imax has been emphasizing “many local language titles” in China and other markets.