Cineplex CEO optimistic about near-term future of movie business despite tariff talk

Ellis Jacob, CEO of Cineplex, discusses Q1 earnings and his outlook fpr the Canadian entertainment sector, as the company reports $36.6m in loss during Q1.

Just days after U.S. President Donald Trump started making threats to impose 100 per cent tariffs on foreign-made films, the head of Canada’s biggest cinema chain surprisingly had some pep in his voice.

Cineplex Inc. CEO Ellis Jacob attributed his instantly obvious excitement to the packed, upcoming spring and summer film slates.

They feature a buzzy Formula One movie, a “Lilo & Stitch” sequel, the upcoming “Superman” flick and the potential conclusion of the three-decade long “Mission: Impossible” series — all movies he said have him feeling the best he’s felt in a few years about the theatre business.

“We basically feel COVID and the strikes are behind us now,” Jacob said in a Friday interview, referring to the pandemic that closed theatres for months and 2023 labour action from actors and writers that kept film sets dark and upended several major 2024 releases.

“We are very excited by the fact that guests are coming back and they want to enjoy that cinema experience.”

But as the rebound Jacob has long awaited takes shape, the movie business is staring down a new threat: the U.S. president.

Donald Trump’s Sunday social media musings promised a 100 per cent tariff “on any and all Movies coming into our Country that are produced in Foreign Lands.”

His inspiration appeared to be the U.S. movie industry he sees as “DYING a very fast death” because other countries “are offering all sorts of incentives to draw” film production away from the U.S.

In the greater Los Angeles area, production last year was down 5.6 per cent from 2023, according to FilmLA, second only to 2020, the peak of the pandemic.

Tariffs would attack the studios and distributors Cineplex works with, but Jacob isn’t racked with fear.

“I was kind of more worried on Monday than I am today because I’ve spoken with the studio leaders and they basically said this is something that will have to play out,” he said.

“We’ll have to see where things end up and I don’t want to speculate on it.”

Part of the optimism comes from the complexity of film production. Often a movie is shot in one or several countries and then edited and augmented with sound and visual effects elsewhere.

“Sometimes you need different views for that particular movie, like Tom Cruise’s movies, Mission Impossible, they are filmed in a lot of places,” Jacob added.

“It would be ... very hard to initiate a tariff that would be able to be measured.”

Rather than tariffs, it’s possible the U.S. will take another tact.

Last October, California Gov. Gavin Newsom proposed expanding his state’s film and television tax credit program to US$750 million annually, up from US$330 million.

Canadian cities and provinces offer some of their own incentives and Jacob said the country has “great production facilities in places like Vancouver, Toronto and Montreal.”

His remarks came just after Cineplex reported a loss of $36.6 million in its latest quarter as its revenue fell 10 per cent compared with a year ago due to a weaker film slate.

The company said the loss amounted to 58 cents per diluted share for the quarter ended March 31.

The result compared with a profit of $5.2 million or eight cents per share a year ago when it sold its Player One Amusement Group Inc. business.

Its loss from continuing operations for its latest quarter was 58 cents per diluted share compared with a loss of 99 cents per diluted share in the first quarter of 2024.

Revenue for the quarter totalled $264.3 million, down from $294.8 million a year ago.

Theatre attendance amounted to 8.4 million, down from 9.8 million in the same quarter last year.

Tara Deschamps, The Canadian Press

With files from The Associated Press