Regal Cinemas parent company plans to file for bankruptcy protection, per report

The parent company of Regal Cinemas is preparing to file for bankruptcy amid consumers' slow return to movie theaters, according to a report from the Wall Street Journal.

With its U.S. headquarters in Knoxville, Regal is one of East Tennessee's most prominent national brands.

The company said in a statement Friday that all Cineworld and Regal theaters are open for business as usual.

Regal closed its theaters across the country and furloughed 40,000 employees for months when the COVID-19 pandemic hit.

Like for all movie theater chains, attendance was slow to bounce back once theaters reopened, and the seemingly endless array of streaming options remain stiff competition.

Regal's U.K.-based owner, Cineworld, is expected to file a chapter 11 petition in the U.S., according to the Wall Street Journal.

"As we announced earlier this week, we are proactively evaluating strategic options to ensure we have the balance sheet strength and flexibility to adapt to market conditions, and that process remains ongoing," according to the Cineworld statement. "We are committed to our customers’ experience and to being the 'Best Place to Watch a Movie.'"

Cineworld reported $4.84 billion in debt in its 2021 annual report. Shares of Cineworld dropped more than 80% after the Wall Street Journal report published Friday.

Regal previously went through the bankruptcy process in the early 2000s.

Cineworld completed its $5.8 billion acquisition of Regal in 2018 and became the second largest cinema business in the world, based on number of screens.

Regal operates 6,787 screens in 505 theaters in 42 states along with American Samoa, the District of Columbia, Guam and Saipan, the company said as of April 30.

Regal's distinct headquarters are located just south of downtown Knoxville along the Tennessee River. It reported 664 East Tennessee employees to the Knox.biz 2022 Book of Lists. Cineworld says it employs 28,000 people.

Cineworld: ticket sales below expectations

Cineworld said Wednesday that ticket sales had been below expectations, which it attributed to a limited number of films hitting theaters, according to Variety.

That was a far cry from its optimistic outlook in a March update to investors, which said the business was “now well positioned to benefit from the strong movie slate in 2022 and beyond.”

Recovery is happening, albeit slowly and painfully. It reported a $565.8 million loss after tax in 2021, compared to a $2.651 billion loss in 2020, according to its 2021 annual report.

Cineworld reported 95.3 million tickets sold in 2021, compared to 54.4 million the year before. That's a far cry from the 275 million admissions Cineworld reported for 2019.

The National Association of Theatre Owners estimated in 2020 that 70% of theaters in the U.S. could file for bankruptcy or close by 2021.

"They're gonna have to figure out ways to entertain us ... engage us, bring us into the movie theaters and reimagine what it means to consume beverages and food in the theaters,"  J. Christopher Hamilton, professor of television, radio and film at Syracuse University, told Knox News in October 2020.

Regal furloughed thousands in 2020

Founded in Knoxville in 1989, Regal has made key real estate investments in Knoxville since it was sold to Cineworld.

It renovated West Town Mall 9 into Cinebarre in July 2018, a full-service restaurant and bar with in-theater food delivery. Regal reopened Regal Pinnacle 18 in August 2020 with an updated lobby design, bar, premium food and ticket kiosks.

Other local properties are Riviera on Gay Street and Downtown West Cinema.

The road to reopening was a winding one for Regal.

After a brief attempt to reopen theaters in August 2020, Regal again closed its locations in early October 2020 after the James Bond film "No Time to Die" and other blockbusters were postponed again, this time to 2021.

It furloughed 40,000 U.S. employees at that time, most of whom worked at theater locations.

Despite enhanced safety policies and restricted seating capacities, Regal couldn't overcome consumers' fears of returning to the movies and a lackluster slate of films.

March 16, 2020: Regal is the first of the country's top three movie chains to announce it would close its theaters around the country until further notice.

Aug. 21, 2020: Regal reopens two Knoxville theaters with new safety and seating regulations. It also marks the reopening of Pinnacle 18 after it was remodeled to be just one of a handful of Regal theaters in the U.S. with a futuristic new lobby. 

Go deeper: Inside Regal's battle for 'hearts and minds' of movie goers and studios

Oct. 5, 2020: Regal announces it will temporarily close all of its U.S. movie theaters, citing "an increasingly challenging theatrical landscape and sustained key market closures due to the COVID-19 pandemic."

April 2, 2021: Regal reopens Pinnacle at Turkey Creek, just in time for "Godzilla vs. Kong."

May 21, 2021: Regal reopens the rest of its Knoxville theaters, along with a wave of theaters nationwide.

Growth and Development Editor Brenna McDermott can be reached at brenna.mcdermott@knoxnews.com. Support our local news efforts by becoming a Knox News subscriber. 

This article originally appeared on Knoxville News Sentinel: Regal Cinemas parent company Cineworld to file for bankruptcy