Greg Marcus, CEO of Marcus Corp., was shocked when Arclight Cinemas and Pacific Theatres went dark. “I happened to notice that. It caught my attention,” he joked. “I said, ‘What? Arclight is not reopening?’ Arclight’s reopening. I’ll take that bet with anybody who wants to bet me on that. Those theaters are so productive nationally that they will reopen. I just don’t know who will control them. We certainly welcome those discussions.”
“There’s nothing to report right this second, but we are open and available for discussions,” he told investors on a call to discuss first quarter earnings where execs stressed that as the economy reopens, Marcus is looking for opportunities to grow its theater network.
Decurian, owner of the Arclight Cinemas and Pacific Theatres announced last month the chain won’t be reopening even as Los Angeles is. Its crown jewel is the Hollywood Arclight on Sunset Boulevard, one of the highest-grossing movie theaters in the nation, and the adjacent Cinerama Dome beloved by filmmakers.
“We are in the world of experimentation. Obviously, it’s a very short window,” Marcus said.
He sees OTT players eventually extending, and theaters perhaps taking, an abundance of films “at more advantageous terms” that could help offset shorter windows.
“The Oscars were challenged this year because nobody knew the movies. It gets harder every single day, jumping between apps. Things just disappear quickly. In theaters, we can’t have unlimited product at any given time … so you get a halo put over certain pieces of content.”
“The historic studios have known that forever. I think the over-the-top gang can start to recognize that as well.”
Marcus, which owns a hotel group along with the nation’s fourth largest theater chain, saw losses widen to $28 million from $19 million – including a state government grant of $1.3 million — on revenue of $50.7 million versus $159.5 million in the year earlier quarter. It was the last quarter that Marcus, and other exhibitors, will show such painful comps.
Attendance was down 81%. Marcus said that was better than an overall box office drop for the March quarter of nearly 90%. Per capita revenue for concessions jumped, driven by digital pre-orders that execs said may be more lucrative than imagined since shorter lines are always better for business.
“The app won’t ever miss the up-sell opportunity. The human standing there, a kid in a line ten deep, is worrying about filling the popcorn buckets, not saying, ‘Do you want to go from a medium to a large soda?'” The chain also touted sales from Marcus Private Cinema. Guests reserving an entire auditorium has a performed really well for exhibitors during Covid.
Marcus 52% of its theaters were open on Jan. 1. As of this coming Friday, nearly 89% will be rolling as new films are released and demand ramps up.
“With restrictions loosening in markets like New York and California, studios are showing an increased willingness to begin releasing new films to theatres,” said Marcus Theatres CEO Rolando Rodriguez. He cited Raya and the Last Dragon, Tom and Jerry, The Croods: A New Age, Wonder Woman 1984 and The Little Things for last quarter and the subsequent releases of Godzilla vs. Kong, Mortal Kombat and Demon Slayer — the best performing films since the onset of the pandemic, underscoring pent-up demand.
Highly anticipated new films include Cruella, Quiet Place II, Conjuring: The Devil Made Me Do It, In the Heights and Fast & Furious 9 and a busy film slate with Black Widow, Space Jam: The New Legacy, Hotel Transylvania: Transformania, The Suicide Squad, Free Guy, Venom: Let There Be Carnage, Dune,” “No Time to Die, Top Gun: Maverick, West Side Story and Spider Man: No Way Home.