Cineworld/Regal Cinemas

Cineworld's 2022 bankruptcy dragged its Regal Cinemas subsidiary into restructuring, demonstrating how the theatrical exhibition industry faced existential challenge from streaming. The company was the world's second-largest theater chain; even that scale couldn't survive COVID-19 closures, streaming competition, and debt from the 2018 Regal acquisition. The mechanism failure was acquisition debt meeting demand shock. Cineworld had acquired Regal for $3.6 billion in 2018, just before the streaming era accelerated and three years before COVID-19. The debt service from that acquisition consumed resources needed to survive extended closures. When theaters reopened, attendance remained depressed as consumers had habituated to streaming. The company attempted to restructure in bankruptcy, closing underperforming locations and renegotiating leases. Theater exhibition may survive as a business, but it will be smaller—fewer screens, fewer showings, more premium experiences. Cineworld's bankruptcy accelerated the consolidation that the pandemic began.