There was an article recently on the deal falling through between Cineplex and Cineworld group in wifihifi. So what’s next for Cineplex?
The article stated that Cineworld Group decided to end the conversations stating that Cineplex had breached part of the arrangement. Cineplex of course has come back saying that is not the case. A quote from Cineworld states “a material adverse effect has occurred with respect to Cineplex. As a consequence of these matters and Cineplex’s unwillingness to cure the breaches, Cineworld has notified Cineplex that it has terminated the Arrangement Agreement with immediate effect. The Acquisition will therefore not proceed.”
Cineplex is rebutting saying that not only was there no breach. They also claim that Cineworld has failed to hold up their end of the bargain as it relates to the Acquisition under the Investment Canada Act. Cineplex has been on defence since COVID hit and has been leaning on the relief that the government has provided to stay a float.
There must be something here that I am missing. We are all aware of what happened back in March when our government took safety precautions in order to keep us all healthy. In the meantime, some businesses have been able to pivot and remain profitable while some haven’t. I don’t claim to be an expert, however I feel that there was a better solution.
Cineplex has multiple contracts and relationships with multiple studios. It feels like when all this happened there was no other option other than to shut it all down. However Cineplex has a streaming app. They have a streaming app where your Scene points can be used and accumulated. It baffles me that Cineplex did not stream new releases for a premium (the way we have seen Apple TV do with a couple of titles). I realize that this won’t help the sales of confection and other various revenues that the theatre enjoys, however it is a short term solution. Charging a premium for a new release for a couple of weeks would allow the relationship between the studios and Cineplex to remain strong. Even if their revenue is cut substantially it would seem that a certain percentage of something is better than 100% of nothing.
One day we will look back and have learned a lot through these times of pandemic. We will go back to the theatre and enjoy the experience that Cineplex brings us. There is nothing wrong however, with entertaining a new release digitally in the meantime and then giving people the opportunity to see it again when they open back up.