The two sole commercial theaters in Park City, Utah designated as exclusive screening locations for movies from the Sundance Film Festival are on the precipice of closing down after the company in charge filed for bankruptcy.
Said organization is the Los Angeles-based Metropolitan Theatres Corporation, which operates the Redstone 8 Cinemas, located near Kimball Junction, and the Holiday Village 4 Cinemas, which stands north of the city.
The Chapter 11 bankruptcy was filed by the company last Feb, 29, citing the pandemic, writer and actor strikes, and lackluster box office performances as the reasons behind the decision.
According to the US Courts, under this type of bankruptcy declaration, businesses can continue their operations while forming a plan to counteract the mounting financial troubles with counsel from their creditors.
Behind the Metropolitan Theatres Corporation's Declaration of Bankruptcy
As per court documents quoted by the Salt Lake publication KSL, the century-old company and its subsidiaries have a total of "16 theaters and 87 screens" in their historic and innovative collection of multiplexes across California, Colorado, and Utah.
In addition, the company is currently employing 12 full-time and 240 part-time workers, and in 2022, it reportedly dropped a pair of underperforming theatres in Aspen, Colorado, and Hailey, Idaho as the venues' leases reached their expiration.
As stated in the bankruptcy filing, the company dropped the two film spaces in anticipation of "operating losses" that were projected in the "foreseeable future."
Indeed, such a "drought" came for the company as their January to September report last year exhibited a net loss of more than $3 million.
This is despite receiving more than $2.5 million in Paycheck Protection Program forgivable loans given to businesses that had to temporarily close down due to COVID-19 restrictions, which affected the company through the forced shuttering of all its theaters around March 2020.
By the end of 2021, the theatre company was back in operational shape and had also received over $9 million from a separate global pandemic-related Shuttered Venue Operator Grant.
In June of the same year, the Metropolitan Theatres Corporation accrued around $500,000, which it increased starting from a $150,000 COVID-19 Economic Injury Disaster Loan balance.
Metropolitan Theatres Corporation's Current Predicament
Now, it owes more than $300,000 in rent to a host of landlords, and as per the court documents, the company pays roughly $2.6 million every year just to lease its numerous theatre locations.
This same situation has been seen across the industry in recent years and has been exacerbated by the integration of streaming platforms as the two mediums sometimes fight for audiences during simultaneous releases, giving in-person venues less time to generate income.
As per the Salt Lake-based publication, the Metropolitan Theatres Corporation said that they are hoping to negotiate some kind of deal with its landlord partners because many of their current leases are "above-market."
