The rise and fall of the global cinema chain Cineworld (LSE: CINE) is also the story of the rise and fall of Israel’s Greidinger family – Moshe (Mooky) and his brother Israel – the grandsons of the family founder, and today’s top managers. The Greidinger family built the world’s second biggest cinema chain, after starting out in Israel, but Covid has destroyed the global company., which might now declare bankruptcy.
Building on the cinema chain their grandfather Moshe Greidinger founded in Haifa, the Greidinger brothers’ power began in Israel, where they own Israel Theaters and its Rav Chen and Yes Planet cinema chains, and the Forum Films distribution company, which has agreements with the likes of MGM, Disney and Sony. Through mergers and acquisitions, they built the worldwide chain of Cineworld. But the Covid pandemic destroyed what they built over decades and there is currently real concern that Cineworld may declare bankruptcy. Over the past year Cineworld’s share price has lost 94% on the London Stock Exchange, leaving the company with a market cap of just £56 million ($65 million).
In 1930, Moshe Greidinger, grandfather of the current Moshe Greidinger, invested in the Ein Dor cinema in the Hadar neighborhood of Haifa. An immigrant from Romania, Moshe Greidinger senior, had business interests in food, shipping and real estate and identified a business opportunity in the Haifa cinema. In 1935 he opened Haifa’s Armon cinema.
Moshe Greidinger senior died in 1946 and his son Kalman expanded the cinema part of his later father’s business portfolio by buying the Chen cinema in Tel Aviv, which became the flagship cinema of the Rav Chen multi-screen cinema chain in Israel.
The push abroad began in 1997 when the Greidingers established Cinema City International N.V. (CCI) and opened their first overseas cinema in Budapest, Hungary. By December 2006 when Cinema City held its IPO in Poland, the company had dozens of multi-screen cinemas in Hungary, Poland, the Czech Republic, Slovakia, Bulgaria and Romania and soon after the company owned a flourishing movie distribution firm. Despite the name, the Greidingers have no connection to the Cinema City chain in Israel.
The really big change came in January 2014 when the Greidinger’s Cinema City merged with the UK chain’s Cineworld to form a business with an enterprise value of £503 million. Cineworld had 1,500 cinema screens in the UK and the Greidingers had a 29% stake in the merged company and assumed the senior management positions. In 2017, Cineworld became the world’s number two chain with the acquisition of the Regal chain in the US for $3.6 billion. The acquisition added 550 cinemas with 7,300 screens to the Greidinger’s fast growing empire.
On the eve of the outbreak of the Covid pandemic in 2020, Cineworld managed 11,000 cinemas worldwide had over 37,000 employees and was worth $3.65 billion.
In early 2020, Cineworld had also agreed to buy the Canadian Cineplex chain which would have made it the world’s largest cinema chain and in December 2021, a Canadian court ruled that Cineworld must pay Cineplex $1.6 billion for not completing the deal. Cineworld is appealing the ruling.
In 2021, Cineworld saw revenue jump 100% to $1.8 billion but the company lost $566 million, after losing $2.65 billion in 2020. The company currently has commitments of $1.56 billion against assets of just $533 million.
Published by Globes, Israel business news –– on August 21, 2022.
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