Baek Byung-yeul is a journalist at The Korea Times focused on cultural content, including films and cultural events in South Korea. You can contact him at baekby@koreatimes.co.kr to share your insights.
Megabox crisis raises concerns over future of Korean cinema
A person walks past a Megabox theater in Seoul, June 22, 2022. Newsis
By Baek Byung-yeul
The financial crisis facing Megabox JoongAng is raising concern across Korea's film industry, with filmmakers and distributors warning that the problems extend far beyond a single theater chain.
As one of the country's three major multiplex operators and a leading film investor through Plus M Entertainment, Megabox has become deeply embedded in the Korean movie business.
Industry officials said any disruption to its operations could impact filmmaking and distribution at a time when the sector is already struggling to recover from the pandemic and the rise of streaming platforms.
On June 12, Megabox JoongAng was among five affiliates of JoongAng Group that filed for corporate rehabilitation with the Seoul Bankruptcy Court. The move came days after JTBC, the group’s flagship broadcaster, declared a default on 20.6 billion won ($13.5 million) in debt repayments.
While Megabox theaters continue to operate normally, the filing has sent shockwaves to the industry.
For more than two decades, Megabox has stood alongside CGV and Lotte Cinema as one of Korea's three major multiplex chains. Through its division Plus M Entertainment, it has also been one of key players in film investment and distribution. The company is also preparing for the July release of director Na Hong-jin's highly anticipated science fiction thriller “Hope.”
Industry officials said the company's importance extends far beyond movie screenings.
"If Megabox runs into serious difficulties, the impact will not stop at theaters," an official from a local movie company said on condition of anonymity. "Distributors, production companies, marketing firms and even film crews could all be affected. The entire ecosystem is connected."
One immediate concern involves settlement payments between theaters and distributors.
Another official said anxiety has grown over whether distributors and producers will continue receiving payments on schedule as court proceedings move forward.
"There is a lot of uncertainty in the industry right now," the official who requested anonymity said. "People are worried about whether payments will be made normally and whether future projects will be affected."
The concerns come as Korea's theater business continues to struggle with changing viewing habits.
According to the Korean Film Council, total theater revenue reached 1.05 trillion won in 2025, down 12.4 percent from a year earlier. The figure was only 57.3 percent of the average level recorded between 2017 and 2019, before the pandemic.
The number of movie admissions is seeing a similar decline. The number of theatergoers reached 106 million last year, less than half of the pre-pandemic average.
The numbers highlight the industry's challenges, with Megabox in the weakest position.
In the first quarter of 2026, CGV posted sales of 573.4 billion won and an operating profit of 8.7 billion won. Lotte Cultureworks, operator of Lotte Cinema, reported sales of 124.6 billion won and an operating profit of 7.9 billion won.
Megabox JoongAng reported sales of 61.8 billion won but remained in the red with an operating loss of 1.4 billion won.
The crisis has also cast uncertainty over the proposed merger between Megabox and Lotte Cinema, a deal that many in the industry have viewed as a potential lifeline for Korea's struggling theater business.
The two companies have been in merger talks since last year, with their initial agreement set to expire on June 30. Despite the complications from the rehabilitation filing, discussions are likely to continue under court supervision.