Palace clears COVID hurdles, but movie industry strikes a new threat
Theatre operator Palace Amusement Company has, for the first time in three years, spun out of losses associated with the COVID-19 pandemic to record earnings of $228 million, three times more than the pre-pandemic levels.
The numbers indicate that the movie theatre operator, which was forced into debt to survive the decimated cinema market when the health crisis hit, is now in the clear, but there are new headwinds external to the company that could derail those gains heading into the busy Christmas period.
“I’m very hopeful about our performance over the next few months, but my only concern is when the actors will go back to work, because that would of course negatively impact us if the strike continues,” Marketing Manager Melanie Graham told the Financial Gleaner.
Some 11,500 Hollywood writers, represented by the Writers Guild of America, walked off the job on May 2, marking the beginning of months-long strike actions. That was followed by 160,000 actors under the Screen Actors Guild and American Federation of Television and Radio Artists going on strike as well on July 14.
Both were stuck in contract negotiations with the Alliance of Motion Picture and Television Producers, which represents Hollywood studios and production companies, until earlier this week when Hollywood writers voted almost unanimously to approve the contract agreement reached by their union leaders.
The agreement, which has been described as a win by industry analysts, speaks to gains in payment for writers, the size of show staffs, and control over artificial intelligence in scripts. It brought to an end the writers’ strike actions after nearly five months; however, the actors remain in negotiations.
“It was a serious strike, there are very little pictures coming out. But I know that negotiations are happening and hopefully, there will be a resolution very shortly,” Graham said.
In the meantime, Graham is banking on current movies such as The Expend4bles, Paw Patrol the Mighty Movie, The Nun 2, The Collective, The Equalizer 3 and The Creator to keep Palace’s financial performance steady over the upcoming festive season.
The October to December period is peak season for the movie theatre operator.
Ahead of the disruptions in the industry and up to the close of its financial year in June 2023, Palace Amusement revenues swelled to $1.5 billion across its four movie houses in Jamaica, more than doubling its 2022 revenues of $649 million. Profit also soared to $228 million, compared to losses of $260 million a year earlier.
The breakdown of results showed that the flagship Carib Cinema in Cross Roads, Kingston, still holds its place as the largest revenue contributor at $567 million, and is trailed by four-year-old Sunshine Place in Portmore at $380 million. The New Kingston-based Palace Cineplex and Montego Bay’s Palace Multiplex raked in revenues of $202 million and $312 million, respectively. Meanwhile, the now-closed New Kingston Drive-in operation made contributions of $4.2 million.
In all instances, the individual operations have more than doubled revenues made for the comparative period of 2022, except for the drive-in cinema.
Palace’s stock, which was split 600 for one earlier this year, was trading at $1.40 intra-day on Thursday.