Escondido Stadium 16, Imax closing, Regal Cinemas says

Bad news, Escondido lovers of the cinema. Regal Cinemas has included the Escondido Stadium 16 and Imax at 350 W. Valley Parkway in its list of 39 US theaters to close due to the corporation’s bankruptcy filing. Parkway Plaza Stadium 18 and Imax at El Cajon also was scheduled for closing.

Regal Cinemas, the second-largest chain of movie theaters in the U.S., will close 39 locations after its parent company Cineworld filed for bankruptcyin September, according to legal filings obtained by Variety.

Cineworld will reject the leases beginning Feb. 15. Amid a massive decline in the domestic box office during the COVID-19 pandemic, the monthly rent per theater increased by nearly 30% from 2019 to 2022, according to the latest bankruptcy filing.

“In total, the Debtors estimate that rejecting the Leases will save their estates approximately $22 million annually,” the document states. Any personal property of little value remaining at the locations will be abandoned.

Cineworld detailed the plan to reject the leases starting February 15 in a new bankruptcy filing on Tuesday. Regal is the second-largest cinema chain in the US, behind AMC, with over 500 theaters.

Bob Petrich, a commercial real estate broker with KW Commercial Real Estate, the leasing agent for the shopping center where the Escondido theater is located, said to the San Diego Union Tribune that the center’s landlord is trying to work with the theater chain to keep the theater in operation.

“They’re making every effort,” Petrich said.

If the theater does close, city officials are hopeful that a new tenant can be secured for the space, whether it’s a movie theater or another type of business, said Jennifer Schoeneck, deputy director of economic development with Escondido.

The company’s plan to close locations during its bankruptcy is fairly routine. The Chapter 11 process makes it easier for companies to walk away from leases without incurring major penalties and to press landlords for better terms.

“The debtors are hopeful that these negotiations will lead to lease concessions and modifications that will obviate the need for rejection and enable additional theater sites to remain open,” Cineworld said in the filing.

An attorney for Cineworld did not immediately respond to requests for comment by Business Insider on Wednesday afternoon.

Cineworld filed for bankruptcy at a time when the larger theatrical industry is struggling to fully rebound from the pandemic. The North American box office hit $7.4 billion in 2022, according to Comscore, down from over $11 billion in 2019 and 2018.

Cineworld operates 747 locations with 9,139 screens in 10 countries, with roughly 500 of those theaters in the U.S. Theatrical moviegoing has taken a huge hit during the pandemic, with the 2022 domestic box office tapping out at $7.5 billion, an approximate 30% decrease from the $11.4 billion in 2019 pre-COVID. The company took a loss of $3 billion in 2020, as many theaters remained shuttered, and a $708.3 million loss before tax in 2021. The net debt, excluding lease liabilities, was $4.84 billion.

Here are the 39 locations will be closed, via Business Insider, which first reported the news.