Canada’s movie theatre monarch has a new CEO, and could soon have a new owner.
What happened: Cineplex chose Bill Walker as its new CEO yesterday, immediately taking the place of Ellis Jacob, who was in charge for more than two decades. Walker’s first order of business: overseeing a strategic review that could lead to a sale of the company. Cineplex has secured the services of Goldman Sachs and TD Securities to conduct the review.
Earlier this year, Bloomberg reported that the company was evaluating the interest of foreign theater chains Cinemark and Cineworld and considering a sale. The latter actually agreed to buy Cineplex in 2019, but reneged due to the pandemic. Cineworld was ordered to pay $1.24 billion, but never did due to a bankruptcy filing.
Why it is taking place: Cineplex wants to sell as many tickets as possible after a phenomenal year for movies. The surprise smashes Obsession and Backrooms demonstrated that Gen Z audiences are now key drivers of cinemagoing and restored hopes that not every hit must be IP-driven, while Spider-Man: Brand New Day and The Odyssey set box office records. Why it matters: In Canada, Cineplex controls the moviegoing industry. It still controls approximately three quarters of Canada’s box office revenues, despite the rise of independent cinemas. A monopoly in foreign hands sounds even worse than a de facto monopoly. Zoom out: Cineplex’s iron grip made national headlines last month after a Toronto theatre was forced to cancel screenings of Tony after the movie’s distributor cited a longstanding industry practice essentially giving Cineplex exclusive exhibition rights in a geographic area.
