Despite their overall revenue remaining relatively stable, the beleaguered National CineMedia group has managed to grow its fourth-quarter profit off the back of a strong Q4 performance from the domestic box office despite recent bankruptcy proceedings. Brandon Blake, our entertainment attorney from Blake & Wang P.A., looks deeper into the reasons behind this welcome boost.
National Advertising Revenue Growth
This growth in national advertising amounted to 2%, or $72M. This growth offset a fractional decrease in their regional/local ad revenue. National CineMedia’s net income came in at $23.7M for the final quarter of 2023. That’s quite an improvement on the $6.1M of the comparable quarter in 2022! Their overall revenue held remarkably steady at $90.9M (vs $91.7M in the same period for the previous year.
This renewed interest in theatrical advertising comes as marketers have realized the importance of a strong cinematic release in boosting overall profits, including subsequent streaming releases.
Post-Restructuring Plans
This will be welcome news in the wake of National CineMedia’s Chapter 11 bankruptcy filing and financial restructuring, which was completed in August 2023. This reduced their staggering $1.1B debt load to roughly $10M currently. Most of these losses were accumulated during the pandemic lockdowns and subsequent slow Hollywood recovery, which saw severe impacts on on-screen advertising.
Despite the many successes of the 2023 box office, 2024 content pipeline disruptions due to last year’s dual strike actions could result in a slower 2024 box office and reduced release slates. The wider ad market remains soft, too. However, consumer demand for the theatrical market remains high, and audiences have returned to the theater in far higher numbers than was initially predicted post-pandemic. Let’s hope to hear more good news comes from the theatrical industry throughout 2024.
