Multiplexes incur huge losses due to Covid-19

For a richer cinema experience, most moviegoers prefer a multiplex over its smaller counterpart – the traditional cinema. At a cineplex, the halls are usually cleaner, the food is better and the movies shown often appeal to a global audience. But all of that requires big investment, which means that when halls stay empty for months at a stretch, the losses are also proportionate.

The three multiplexes in the country have been incurring huge financial losses as they have been closed since March 18, along with other cinema halls of the country, due to the Covid-19 pandemic.

Owners of the multiplexes have been facing serious pressure as some of them have to pay instalments for huge bank loans.

Star Cineplex, the first multiplex of the country, opened 16 years ago at Level-8 of the Bashundhara City shopping mall in Dhaka. The second one, Jamuna Blockbuster Cinemas, opened a few years ago at the Jamuna Future Park mall. Silver Screen, another multiplex cinema hall, was inaugurated in Chattogram two years back.

All three were doing well before Covid-19 hit the country. But right now, they are facing a severe crisis.

Around 500 employees work in these three multiplexes combined. Though some have already lost their jobs, the owners have been paying salaries to most of the employees. They are also trying to pay off their bank loans. But how long will they be able to survive if the crisis continues?

The Business Standard reached out to the authorities of the multiplexes on July 20.

Mahbub Rahman Ruhel, chairman of Star Cineplex, said, "We opened two branches of Star Cineplex last year – one in Dhanmondi's Shimanto Square in January and another in Mohakhali's SKS Tower at the end of the year. We had a plan to inaugurate a branch in Mirpur this year in March. But we later postponed that because of the coronavirus."

He said they had invested around Tk20 crore on these three branches, Tk15 crore of which came from bank loans.

"Everything is closed now. But I have been paying the rent of these four branches, salaries to the employees, bank interest, etc. I am not getting any new loans," he added.

Ruhel said that around 350 staff of Star Cineplex have been paid for three months and no staff had been laid off.

"But I am not sure about what will happen in the future because the Bashundhara authorities served us a notice two days ago to leave the floor for unpaid rent.

"I thought we would get help from the Bashundhara authorities and that they would consider the rent. But they have provided us with several notices in the last few months because we could not pay rent," he added.

Ruhel said the building authorities of other branches have been cooperative so far.

As all cinema halls in Bangladesh were closed on March 18, the owners missed festivals like Pahela Baishakh and Eid-ul-Fitr. No new films have been released in the meantime due to the closure of the cinemas worldwide.

An official of Star Cineplex, on condition of anonymity, said majority of the business in the whole year is done during the few days of these festivals. That is why missing these two festivals have resulted in major financial loss.

"Three branches of Star Cineplex had been open before the pandemic. There had been huge crowds in the 12 halls of these branches," he added.

Star Cineplex Chairman Ruhel said he had lost around Tk25 crore to the pandemic.

"Still, we are ready to reopen maintaining health guidelines without increasing the ticket price. We only need the content and we expect that the government will consider the matter of our taxes. We think that entertainment is necessary for health too."

Blockbuster Cinemas has also suffered financial loss amid the pandemic.

Zakir Hussain, director of Jamuna Group, said they had invested Tk120 crore on multiplex.

"Now it seems that the entire investment was a waste. In the last four months, we suffered a loss of Tk30 crore, including the booking cost of the cinemas that were meant to be screened throughout this year. We paid money to the foreign production companies at the beginning of the year," he stated.

Zakir said around 100 employees worked in seven halls at Blockbuster, but 10 percent of the workforce had to be laid off due to the pandemic.

Silver Screen, the only multiplex in Chattogram, has not laid off any employees despite the financial losses it has been suffering. The cineplex, located in Sholoshohor, has two halls – the Platinum hall with 72 seats and the Business Class with 16 seats.

"In the last four months, we have suffered a loss of around Tk50 lakh. So far, we have been surviving without laying off any staff. We will reopen it if we get a green signal from the government," said Faruk Ahmed, one of the partners of Silver Screen.

Right now, they are concerned about the content because the entertainment sector around the world has not fully opened yet.

"It will take time to start shooting new movies. We are wondering if we will get any viewers immediately after reopening," he said.

The concern has been echoed by other multiplex authorities too. Even if the viewers come maintaining all health and safety guidelines, what will they watch?

Star Cineplex Chairman Ruhel said there are no good Bangla movies right now. "And it is uncertain when the next Hollywood movie will be released. To overcome the content crisis, we need permission to import movies from different countries. Otherwise, it would be hard for us to survive."

The multiplexes in China, the birthplace of Covid-19, have already reopened. Other countries around the world are also preparing to reopen movie theatres. Some news outlets reported that India could reopen cineplexes in the middle of August.