Exhibitors and distributors despair as cinemas close

Applications have opened for the government's $20 million Supporting Cinemas’ Retention Endurance and Enhancement of Neighbourhoods (SCREEN) Fund.

The closure of Australian cinemas and entertainment venues as well as licensed clubs, hotels and pubs, casinos and nightclubs is a body blow to Village Roadshow Ltd (VRL) and the broader exhibition and distribution sector.

After warning of the prospect of closures last week, VRL told investors today it is implementing contingency plans including employee stand downs and further cost savings such as reducing the cost of leases, deferral of government taxes and ceasing capital expenditure.

It said only employees in business-critical functions would continue working.

VRL CEO Clark Kirby said: “We have made this decision with heavy hearts but we know it is the right thing for the safety and well-being of our employees, patrons and the community.

“We are grateful for the support of our employees and will adopt strategies to reduce the financial impact on them as much as possible.

“We will plan for our businesses to open once again once it is safe and prudent to do so.”

The exhibition industry employs more than 17,000 people including casuals. The cinema shutdown will be acutely felt in regional areas, where 80 per cent of the 154 sites represented by Independent Cinemas Australia are located.

Event Hospitality and Entertainment said its circuit will close until the end of May, when the group will assess the situation. The State Theatre and its chains in Germany and New Zealand are also shuttered.

It will stand down the majority of its cinema employees from this Friday. Over the past month CEO Jane Hastings and senior staff agreed to wage cuts and the board reduced their fees.

Hastings said today: “We are deploying all measures to reduce the impact and ensure the safety of our people and customers.

“We are confident that when the immediate coronavirus impact has passed, with such a strong film line-up customers will return to cinemas seeking escapism and entertainment and we will return to employing staff in local communities.”

Noting this is the first time in Hoyts’ 111-year history that its cinemas in Australia and NZ have closed [apart from 1919 during the Spanish flu epidemic], Hoyts CEO Damian Keogh said: “We sincerely thank our guests and crew for their support and look forward to welcoming them back as soon as it safe to do so.”

Michael Hawkins, executive director of the National Association of Cinema Operators, summed up the industry’s resilience when he said: “The movie business has faced off against many adversaries over the years – world wars, depressions, the GCC, television, video and DVD and piracy to name a few – and has not just survived but thrived, for one simple reason: the cinema experience is unique.

“The coronavirus pandemic is unprecedented in its scale and impact but this too shall pass – and when it is safe to reopen and populate our cinemas, there will be a raft of excellent movies for our patrons to enjoy.

“Our thoughts are with our 17,000 employees and their families at this challenging time. Likewise, we acknowledge the many industries affiliated with cinemas in Australia and impacted by our closure – film distribution companies, trade and equipment suppliers, cleaners, landlords, cafés trading outside cinema complexes – some 93,000 people or more.”