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PARK CITY — The only two commercial movie theaters near Park City, which are regular screening locations for the Sundance Film Festival, are in danger of closing after the company filed for bankruptcy.
The Los Angeles-based Metropolitan Theatres Corporation, which runs the Redstone 8 Cinemas near Kimball Junction and the Holiday Village 4 Cinemas just north of Park City, filed for Chapter 11 bankruptcy on Feb. 29, blaming the pandemic, writer and actor strikes and disappointing box office sales.
A Chapter 11 bankruptcy is known as a "reorganization" bankruptcy, according to the U.S. Courts, during which the business continues to operate, and forms a new plan of reorganization with input from its creditors.
The 100-year-old company and its subsidiaries "operate a diverse collection of historic properties and state-of-the-art multiplexes among their 16 theaters and 87 screens in California, Colorado and Utah," with 12 full-time and 240 part-time employees, according to court documents. In 2022, the company dropped two poorly performing theatres in Aspen, Colorado, and Hailey, Idaho, when their leases expired, because "operating losses were projected for the foreseeable future," the bankruptcy filing states.
From January 2023 to September 2023, it showed a net loss of over $3 million, according to a financial report submitted to the court.
Metropolitan Theatres had to temporarily close all theaters in March of 2020 due to COVID-19 restrictions, and received more than $2.5 million in Paycheck Protection Program forgivable loans between 2020 and 2021, to help alleviate the burdens of these closures. By Dec. 31, 2021, the company's theaters were back open, according to the filing. They also received over $9 million from another pandemic-related Shuttered Venue Operator Grant.
The company has an outstanding balance on a $150,000 COVID-19 Economic Injury Disaster Loan, which it increased to $500,000 in June 2021.
Court documents show the company owes over $300,000 to various landlords for rent, and pays around $2.6 million annually to lease its theaters.
Katherine Wang, executive director of Park City Film, says these two are the only commercial theaters in the area and have been important staples for the Sundance Film Festival for at least 20 years. Wang, who oversees the single screen Jim Santy Auditorium at the Park City Library, says, "We see exactly what Metro has seen."
Industrywide, film exhibition has not bounced back in the same way live performance has, with streaming making the situation extra challenging. What used to be a 90-day window for venues to show newly-released movies has been whittled down to, in some cases, simultaneous digital and in-person release dates.
Wang's nonprofit organization has different mechanisms for support than a typical commercial theater, which has been a boon in these hard times, allowing them to focus programing on what provides community value, hosting content people can't get at home. Commercial theaters have responded by "eventizing cinema," according to Wang, like the Taylor Swift Era's Tour screenings.
Metropolitan Theatres hopes to negotiate rent with its many landlords, saying "many of its leases are above-market."
The Arcadia Management Group manages the Holiday Village 4 for a Miami-based property owner. The group declined to comment on its relationships with tenants. The Boyer Company, headquartered in Salt Lake City, owns the Redstone property and said it did not have any information to provide about the bankruptcy but "will consider all options" if the property becomes available to lease.
Metropolitan Theatres and Sundance did not immediately respond to a request for comment.
