Vue’s founder and chief executive Tim Richards has acknowledged he personally lost “an unimaginable amount of money” as a result of the challenges caused by the pandemic at Europe’s largest cinema operator, which he said had “been to hell and back”.
Richards calculated he personally forfeited an “eight figure” number when the equity held by Vue’s owners was wiped out as a result of the recent debt restructuring at the company. But he told Screen this week he is confident the chain will survive.
Last month, rating agency S&P Global Ratings downgraded Vue’s credit rating to ‘CC’, given to companies which are already struggling to cover all their debt commitments and are at risk of further problems if economic conditions worsen. S&P Global Ratings described Vue’s proposed debt restructuring as “distressed and tantamount to a default” under its criteria.
“We are where we are right now,” Richards told Screen. “We have survived the pandemic, we have been through a painful restructuring but the company has been saved. Ten thousand jobs have been saved and the company right now has a strong balance sheet and cash to move forward.
“We could not be in a stronger position. In a way what the ratings agencies are saying is almost academic. We have been to hell and back but you have to look at where the company is today. We are in the strongest position of any exhibitor right now. We have got a highly respected management team and supportive shareholders and we will take advantage of it.”
When the pandemic hit, Richards said he set himself two goals: to save the company and save “every single employee who helped build the company”. Those goals have been reached, he said.
Tough year ahead
However, Richards again acknowledged that 2024 is going to be a tough year following 2023’s writers and actors’ strikes.
“In September, we were looking to put our budget together for 2024 and we were really struggling with the releases that were coming out. There are some amazing movies coming out this year but there are just not enough of them,” Richards said.
“I remember sitting down with my film team and going through it [the release schedule] at a very granular level and I actually said to them, ‘Where is next year’s Barbie?’ We always have a Barbie, we always have an Oppenheimer but we just couldn’t find it.”
Vue’s film team sat down with its shareholders last autumn and warned them that 2024 was going to be a “very, very tough year”.
“Thanks to the huge support of the shareholders who not only believe in the industry but in the company and management team, they agreed to inject another £50m of cash to continue with everything we want to do in 2024.”
Richards, who is also the outgoing chair of the British Film Institute, described 2024 as being “a foundation-laying year, the last year where we are all fighting as an industry to survive”. Nonetheless, he predicted that the industry will bounce back next year.
“The UK has been a little slower to return than other continental markets,” Richards stated.
Vue’s modelling is that the UK will return to 85% of the admissions average for the three-year pre-pandemic period of 2017-2019, whereas continental Europe will return to 90%. Local films have been doing strong business in Poland, Italy and the Netherlands – but less so in the UK.
The Vue head predicted: “There is going to be a period of consolidation globally, not just in the UK. That’s just for companies to get together, take costs out and become more efficient so we can all survive for the next generation.”
Richards also said there was still space in the UK marketplace for all three of the major exhibitors, Vue, Odeon and Cineworld.
Richards pointed out Vue had been number one in the UK for box office and attendance for over six months. Vue, which was founded in 2003, has recently “picked up” two new sites, in Swindon and Basildon, both part of the old Empire circuit. He also welcomed Irish operator Omniplex’s entry into the UK market. “I have a lot of respect for Omniplex, they’ve done a great job in Ireland.”
Responding to recent controversy about cinema customers bringing their own food and drink into cinemas, Richards dismissed this as a non-story.
“There has been no change at Vue in 20 years in our policies or enforcement… we do not search people. We do not discourage people. If our customers would like to bring in their own food, that’s absolutely fine. There are some obvious legal issues. If people are bringing in alcohol, that’s a problem and if someone was to bring in a five-course hot gourmet meal, that might be an issue but under any reasonable circumstances, no [problem]. We want our customers to enjoy their visit.”
No comments yet