PORT Stephens residents have been disappointed by the news that Majestic Cinemas – the company that has owned and operated the Nelson Bay Cinema – have been forced to close the doors of the local movie house for good.

On Wednesday 31 January Majestic circulated a press release which was rapidly posted and reposted on the pages of local social media groups.

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Majestic announced that, due to the myriad factors adversely affecting the cinema industry both past and present, they had chosen to enter voluntary administration.

In doing so Majestic has allowed an external party to assume control over the business and engage with creditors in the hope of finding a viable plan to continue operating.

Majestic Cinemas has been in business since 2002 and until this most recent announcement was operating eleven cinemas in NSW and Queensland.

The statement outlined some of the core issues that had led to this insolvency process, with much of the problem understandably starting with the global pandemic.

“Support from the government, banks and many of our landlords helped us get through the initial Covid-19 period,” the statement read.

“Unfortunately, while many industries bounced back from Covid-19 in 2022, we have faced additional challenges caused by the pause in movie production on the back of Covid-19 restrictions, reducing major movie releases by about 30 percent, with revenue also being reduced by the same amount.”

These issues have been further complicated by a lengthy industrial action involving the Writers Guild of America and the Screen Actors Guild.

“While 2023 promised to be a better year, the timing of the strikes in Hollywood by the writers and actors in the second half of the year was unfortunate and had a significant impact on the release of major movies, and the effects will continue to be felt in the cinema industry for some time.”

Where major cinema chains have been able to weather much of these stresses – in part by pioneering novel cinema events such as screenings of concerts, theatrical productions and an increased profile for foreign films (particularly the Bollywood productions of South East Asia) – regional cinemas have struggled to maintain interest in the movie-going experience.

Nelson Bay had barely one week to consider this development, when a second statement was circulated.

Referring to the previous announcement, the statement then addressed the situation for Nelson Bay specifically.

“Unfortunately, during the process we were unable to come to terms with the owners of the building and as such it has become clear to the administrators that there was no longer a reasonable prospect of being able to operate this cinema complex profitably and sustainably into the future.”

Majestic Cinemas CEO Kieran Dell made clear his disappointment on the development.

“It’s really a shame that we couldn’t find a way to move forward at this location,” he said.

“I think regional cinemas are a really important part of local communities.”

When asked about the factors that specifically impacted Nelson Bay, forcing the decision to shut down, Mr Dell said, “At the end of the day it’s because the landlords were not willing to negotiate any further.”

“Majestic operates in eleven locations, and in all but three we have been able to reach some kind of agreement with property owners that has allowed us to continue.”

Mr Dell confirmed that the Majestic Cinemas at Singleton and in Nambour, Queensland, were also closing their doors.

A representative from Pure Property Management has reflected on the difficulty of the negotiations.

“There was an offer made, but it was not going to cover the cost of the outgoings for the owners.

“It’s just not a workable situation, unfortunately.”

Speaking in support of the owners is the previous business operator Neil Merrin, who sold to Majestic in 2022 and stepped back entirely in December 2023.

Addressing unfavourable comments about the property owners from some residents on social media, Neil said, “When Covid forced the cinema to close March 2020, the landlord immediately suspended the rent and only required me to pay the outgoings which was an effective reduction of about 80 percent.

”As Covid continued to keep us closed, this arrangement was extended to the end of 2020 with no claw back.

“For 2021, they gave us a 50 percent reduction for the whole year, and this contributed in a big way to keeping the cinema operating in Nelson Bay.

“They are massive contributors to our community with their developments and should be applauded for their support over recent years of the cinema and of Nelson Bay.”

By Lindsay HALL