Coronavirus: Cineworld directors waive salaries as virus impact hits
Bosses of cinema chain Cineworld have waived salaries and bonuses as it struggles with a downturn in business due to coronavirus restrictions.
The world’s second largest cinema chain has closed its 787 cinemas in 10 countries because of the virus.
The UK-based firm is also suspending dividend payments, and is in talks with lenders and film studios about mitigating the impact on trading.
Meanwhile, theatres are also reporting difficulties as shows are cancelled.
Some theatres have asked customers to donate ticket costs or exchange tickets for cancelled shows. While they are also offering refunds, they point out that the money from tickets is crucial to their survival.
For example, London’s Shaftesbury Theatre emailed ticket buyers to say: “This is a very difficult time for the Shaftesbury Theatre and for the company.
“Because of this, we would like to ask you to strongly consider exchanging your ticket for a later performance rather than requesting a refund.”
Shakespeare’s Globe had similar sentiments, telling customers: “As a charity, the Globe survives entirely on ticket sales and supporters. We receive no annual government subsidy.”
In a statement, Cineworld said the current situation was “impossible to imagine a few months ago”.
It added: “This has obviously been extremely challenging in many respects. Every effort is being made to mitigate the effect of the closures, to assist our employees and to preserve cash.
“Until there is greater clarity on the prevailing circumstances and given the impact of Covid-19 on many of our employees, the executive directors have voluntarily agreed to defer payment of their full salaries and any bonuses to which they are entitled.
“Similarly, during this period the non-executive directors will defer their fees.”
Russ Mould, investment director at AJ Bell, said that Cineworld’s “admission that government-mandated closure of cinemas has been ‘extremely challenging’ ranks up there with ‘Houston we have a problem’ in terms of understatement”.
Richard Green, leisure partner at lawyers Gowling WLG, said: “This is a sad reflection of the obvious effect of current circumstances on the leisure market, but it need not be the end of the story as far as the brand goes.
“It is important to look closely at the business model and utilise in-house innovation to ensure it is as well placed as it can be when the lockdown ends.”
Cinemas and theatres across the UK, as well as pubs, restaurants, gyms and other public meetings places were ordered to close last month to help prevent the spread of coronavirus.
Some had started shutting their doors a week earlier when Prime Minister Boris Johnson advised people to avoid public venues, without ordering their closure.
Takings in the UK and Ireland had already started to fall before that, with takings for the second full weekend in March down 50% on the previous weekend.
Many new films, including the new James Bond film, had also had their release dates put back.