Cineplex Revenue Slows As It Looks to Bigger Year Ahead

Canadian exhibitor Cineplex outpaced its 2019 overall revenues during the third quarter, even as it swung to a loss on a $39.2 million provision for a deceptive marketing practices fine imposed by a market regulator.

Cineplex reported $395.6 million in revenues, down 4.6 percent from year-earlier revenues at $463.5 million when Barbie, Oppenheimer and Mission Impossible: Dead Reckoning played on its screens. Cineplex did exceed Q3 2019 revenues of $373.7 million as the exhibitor continues to benefit from a Hollywood box office rebound.

At the same time, Cineplex reported a net loss at $24.7 million, against a year-earlier profit of $29.7 million. During the latest quarter, Cineplex recorded the one-time charge of $39.2 million as a provision for a Competition Tribunal penalty for deceptive marketing practices.

Cineplex is appealing the decision by the federal Competition Bureau that ruled the exhibitor misled patrons by not presenting up front the full price of a movie ticket when the Cineplex.com page was used to purchase theater seats. The exhibitor included a $1.50 online booking fee charge that was discounted for Scene+ loyalty program members and CineClub members had the fee waived.

The Canadian exhibitor filed an appeal with the Federal Court of Appeal on Oct. 23 to toss the Competition Tribunal decision. Cineplex CEO Ellis Jacob told analysts during a morning call that changes to the company's website will be made to comply with the Competition Bureau ruling.

"As a reminder, this ruling has no impact on our ability to charge the online booking fee and we will continue to offer the optional value-added convenience of advanced online seat selection to our guests," Jacob added.

During the third quarter, Cineplex posted box office revenues of $174.9 million, down 7.1 percent from $188.2 million for the same period of 2023 when the company got a Barbieheimer boost. The Canadian exhibitor, which has around a 75 percent share of Canadian box office revenues, saw theater attendance fall 15.5 percent to 13.2 million ticket buyers during the three months to Sept. 30, 2024.

After the analyst call, Jacob told The Hollywood Reporter that the steady return of recent tentpoles like Inside Out 2, Deadpool & Wolverine and Beetlejuice Beetlejuice and sustained enthusiasm by consumers for the multiplex bodes well for future performance of the exhibition industry. "We are seeing the studios getting their movies back into the cinema. And when you look at 2025, there's a lot of strong product and we will continue to see more and more additions as we go forward," Jacob argued.

He pointed to tech giant Amazon committing to releasing around 10 movies next year in theaters as their own bet on the big screen. Jacob also pointed to a rival streamer, Apple, also leaning into theatrical releases, despite changing the release pattern for Wolfs.

The Brad Pitt and George Clooney-starrer was originally expected to get a wide release, but in August Apple announced that it would instead have a one-week theatrical release before heading to the streamer. A sequel was also announced at the same time.

"They are basically testing out the market and looking to what direction they want to go," Jacob said of Apple. Shares in Cineplex fell by 29 cents, or just under 3 percent, to $10.49 during late morning trading on news of the deceptive marketing fine provision.