All right. Great. We're gonna get started. Happy to have back at the conference, from Cinemark, Sean Gamble, President and CEO. Sean, thanks for being here.
Thank you very much for having us. I really appreciate it.
Sure. Sean, we're about midway through your second year as CEO at Cinemark. At least so far in 2023, you're operating in a much healthier environment relative to last year, I'd say. How are you kind of setting priorities as the industry continues to rebound?
Well, look, as you said, I think, we're very encouraged by the progress that both our industry and company continue to make rebounding from the pandemic. As we set out for this year in 2023, I'd categorize our priorities really into three buckets. First is just continuing to effectively navigate this ongoing period of recovery, so being mindful about cash management, expense management, staying flexible and nimble with some of the dynamics we're still dealing with and just keeping employee morale up. Second is expanding our pipeline of content and audiences, so working proactively with our studio partners to get more of that content back on screen, activating new sources of content and using our industry-leading marketing and loyalty program capabilities to attract more people to our theaters and keep them coming back for more after they come.
Finally is just positioning Cinemark for ongoing growth and stability in this evolving media and entertainment landscape. Making sure that we continue to deliver AAA experience to our guests, finding new and diversified sources of revenue growth, and then being very aggressive with productivity and efficiencies of our operations.
Got it. Okay. We are, we're coming off Fast X last weekend, Guardians earlier in the month. As we look ahead, Little Mermaid in a few days and pretty much, you know, straight through to the August doldrums, usual August doldrums, I'd say. Very strong lineup of content. You know, what's kind of your confidence for the market, demand to absorb this slate?
Look, we're very. We have a lot of high confidence in the market's ability to handle a lot of product. I mean, again, we're recovering back towards where we were. We've seen from history, the market can certainly absorb a lot of quality films. I think, you know, certainly we've seen significant sustained consumer enthusiasm for these larger than life cinematic types of experiences we provide to enjoy films. That's cut across all genres of films, all audiences. We've seen it throughout the year. So it's been evidenced by record after record being set across so many films now over the past two years. We certainly think there is an ability to absorb a greater volume of films as we get through the summer period here.
Ultimately, you know, it's really gonna depend on just the quality of titles, you know, how well they resonate with moviegoers. I would say, based on what we recently saw at our industry trade event at CinemaCon, look, we're really encouraged about the potential for these movies that are coming up over the next several months.
Got it. I would certainly agree, right, when it comes to, you know, the franchises or the tentpoles that they could perform to pre-pandemic levels. I think there's been ample evidence of that. I think when it comes to the, you know, mid-range or smaller budget films, it's probably more of a debate. You know, recently we've seen a bit more of a mixed performance. I don't know. I mean, some of that you could attribute to quality or marketing. You can do that for any film, probably, but wanted to get your take on this.
Well, I'd take on that debate because I don't think there is much of a debate because there's been so many examples of smaller and mid-tier films that have been delivering exceptional results. I mean, you look at the first quarter alone, you had adult dramas like A Man Called Otto and 80 for Brady. You had a horror film in M3GAN. You had, like, a mid-budget comedy suspense with Cocaine Bear. You had animation, you know, animated film, Puss in Boots. Obviously, there was the big Avatar film. We've seen those types of movies coming. Whether it's adult dramas, comedies, specialty films, even romantic comedies have made a bit of a resurgence here with Ticket to Paradise and Lost City earlier in the year.
I think, what we're seeing is when compelling films are coming to our theaters, of, you know, good quality, they're working, and it doesn't matter whether they're large films or small films. I think, I think that's been a good sign. I mean, we can talk about it, but I think some of the evolution of the way these films are being distributed and the distribution models have actually lent themselves to a better risk proposition for the studios. I think that will allow for more and more of these films to come to our screens.
Got it. I could debate the box forever, but, you know, we'll move on.
Data will tell the tale in time.
No, no. For sure. Yeah. I guess as it pertains to kind of film supply, I think you said 110 films are dated for this year at this point. That's still below the 130-ish run rate pre-pandemic. I'm interested, you know, how much do you attribute that gap to prior production shutdowns, you know, studio consolidations or bankruptcies? Kind of what gets that figure back to where it was?
Well, as we've looked at the key drivers of that, certainly the bulk of the impact has come from the effect COVID had on the production cycle of movies, right? With the film productions being shut down, and these movies generally take 2 to 3-plus years to make. That stalled that whole process for that period, and it obviously lagged even into the recovery cycle a bit. On top of that, obviously, there was that momentary situation where you had some of the studios, mining their backlog of films to support their new streaming platforms as they needed content for those platforms. I mean, that dynamic has now evolved and changed. We're not seeing as much of that. Lesser so, to a degree, to any consolidation. There's perhaps a little bit of that.
What gives us confidence as we look ahead, is really threefold, in terms of the recovery of content back to levels that it was pre-pandemic. First and foremost is that's what our studio partners are telling us their intent is, right? Their expressed intent is to get back to where they were, and in case of at least a couple of studios, they've actually expressed an intent to go beyond that and do a couple more. Second, you know, key driver is just the performance of these movies. You know, the value that they're delivering to content creators, right? Not only from a theatrical financial performance, but also the lift that they continue to have in all their downstream revenue channels. You know, not just on streaming platforms where they're certainly seeing a lift there, but across the board.
I think the third bucket is now we're obviously starting to see significantly into the game with Amazon and Apple expressing an intent to deliver content at the level of a major studio. When you put all that together, we see content recovering to levels consistent with pre-pandemic, if not even a touch higher as we look forward. It's really a question of how long that trajectory takes to get there.
Yeah. Let's touch on that last point with the, with the streamers. 'Cause I'm interested to know how you think they'll gauge success in theatrical maybe differently than traditional, right? You take a film like Air, we don't have to talk about Air if you don't want to, but, you know, is Amazon focused primarily on, you know, viewer lift that they'll get in Prime from the, from having a theatrical window and box office gross as like a secondary consideration in so far as it makes back its marketing budget?
Sure. Well, look, I mean, Air was a phenomenal film. I mean, I'll be happy to speak... I don't wanna speak on Amazon's behalf, but we know-
Yeah
-they've been very pleased with the results of that film. I think to your question on the way they're looking at it, there maybe, every studio has a little bit of a different angle, but I think they're similar in many respects. I mean, there seems that their primary interest is gonna be to create a greater interest in those titles for their streaming platforms down the line to create greater engagement with those streaming platforms. Obviously, they are also interested in improving the financial results of those films as well as creating value for their consumers. You know, many of these consumers want to see these films on the big screen. When you look at what we're seeing, I mean, the good thing is for theatrical is we're really hitting on all those areas.
You know, the movies, the data is now showing that the movies that are being released theatrically, those are the movies that are being sought out more by consumers on the streaming platforms. They're leading to increased engagement, increased retention, which is exactly in line with what they're aiming to achieve. I think, you know, it's tested. The increased scale that they're expressing they plan to pursue is a testament to that. I think the data will continue. If the current data continues to hold, I think that's just gonna be more and more encouraging for them to put more of these films out theatrically, 'cause it's gonna serve that promotional and financial value that they're seeking that helps their platforms.
Have you gotten a sense of the types of film slates that the streamers might bring to the market, or is it just gonna be varied like a traditional studio?
Well, what has been expressed to us is, somewhat of a varied slate.
Right.
Some larger films, some mid-tier films, some smaller films. It will have a range. I think you look at the scale, I think I mentioned it, the scale that they're talking about investing, it's at a level comparable to a major studio. They've got that potential. You look at Apple's upcoming releases with the Killers of the Flower Moon and Napoleon. These are big, epic-scale films with Martin Scorsese and Ridley Scott, you know, producing and directing these films. These are big, big things. You have a range of that. Air was more of a mid-tier-
Yeah
-type of film with some good star power and, you know, great story. I think it's gonna run the range of and be a nice diverse set of titles.
Got it. Sean, you bring a bit of a unique perspective having sat on the studio and the theatrical side. Interested to know in your conversations with studio execs, how they kind of view that shortened, you know, usually it's around 45 day window, or in some case, a little shorter than that. Like, what does that mean for them economically relative to the old system? What's then the read-through on supply?
Well, I think they're viewing it positively. I mean, based on the discussions we're having, they see this as a positive advancement in the evolution of the window. I would say really more of a flexible window versus this rigid film. What they really didn't like before was this big gap period that existed where a film ran its course in theatrical, then there was this dark zone before-
Yeah
-it came out in theaters. I think there's an overall recognition that there needs to be enough time in the theaters for the theatrical release to do its job in terms of creating that cultural event, building that promotional value, and delivering the financial upside. Then, you know, a shorter window, it's all kinda leaning towards 45 days, you know, as a starting point, that enables it to then get into the home and still ride that momentum in the home and have a good lift there.
The flexible scenario where a movie starts at 45 days in general, and can flex up in success and allow the studios to capture more upside and also flex down a bit if it just doesn't connect with audiences and allow them to minimize their downside, I mean, that creates a better risk model for the studios. You know, getting back to the content discussion, what we're seeing is it enables them to take more chances. We've had multiple films now. You look at a film like Smile or Magic Mike or Evil Dead Rise, like there's been a series of these titles that were designed for streaming that they've put out now theatrically because they said, "Oh, there's a model here that works now for this type of content." I think that can lead to a resurgence of those types of films.
All that is leading to a financial equation that's better. In some cases, we're actually hearing from some studios that their overall film results are performing better now than they ever have, even pre-pandemic.
Got it. I think one of the things that stood out to us in your results recently is market share. That sustained nicely at levels above pre-pandemic. You know, how much do you attribute some of this to film mix, right? 'Cause what, you know, horror, faith, family, tentpoles, those are all performing really well versus the factors that are more in your control?
You know, we're gonna have ebbs and flows quarter to quarter based on content mix. I think first quarter is an example where we perhaps got a little bit of a benefit from some of the mix profile of content and how it played well for our circuit. As we've looked at the key drivers of that share improvement, there's a range of factors that we think are really the core drivers. One was just being the first circuit to reopen in the U.S. ahead of other circuits. I mean, that gave us exposure to consumers who may not have been coming to Cinemark before, and now we've been able to keep them. Second thing is Talk, I mentioned earlier, just our marketing and loyalty capabilities.
Like, we, you know, we have the ability to really get out there and attract more consumers to our theaters and then keep them there with our loyalty programs. We can do things that others can't. Also, our showtime management processes, we've spent a lot of time working on the sophistication of that to make sure we've got the shows that we're showing at the right times and in the right auditoriums to maximize the opportunity for attendance and box office. Our pricing strategies, we feel like we've been driving those in a direction that have led to upside there.
Finally, I'd just say this, our focus on the overall experience that guests have when they come to our theaters from a guest service standpoint, from a premium amenity standpoint, we still have the highest penetration of recliner theaters with almost two-thirds of our circuit reclined of the major circuits. Those are the types of theaters that have rebounded and held the best coming out of the pandemic as consumers have sought more of these types of premium experiences.
Got it. You touched upon this a second ago, right? Part of the market share gain, price optimization strategies, I don't know if there's anything you can kind of share on that. Maybe secondarily, do you kind of expect the industry more broadly at some point to follow through with price increases, as supply and demand trends normalize?
Well, when we think about pricing opportunities, for us, it's really more about sophistication of our pricing capabilities as it pertains to honing, demand and elasticity curves. You know, certainly, there can be opportunities to increase price, but you gotta be careful with that. It really cuts both ways. In some circumstances, it could be increasing pricing, but if you go too aggressive, that can work against you. In other cases, it's actually reducing pricing. It's really just honing that ability. We know from years and years of research that the number 1 reason that consumers start or stop coming to the movies as frequently is when they think that it costs too much.
We place a great emphasis on the perception of value for our consumers, and that factors into the way we think about how we're pricing to best optimize attendance, box office, and food and beverage incidence, and we go. We think there's a lot of opportunity. We're in the early phases of really ramping up some of the increased sophistication we have around using data and analytics and all that in terms of the way we manage our overall pricing across the circuit. 'Cause it gets very discreet by market, by time of year, by day, you know-
Yeah
-by film. There's a lot of opportunity there. I do think the industry as a whole will start to proceed a bit more down that path. It's not just necessarily increasing pricing as the only way it goes. It's, you know, to really maximize value, it goes both ways.
Right. If you look at the industry, I think, right, price increases was a regular part of box office growth for a long time. There's logical reasons why you would hold back on that during the pandemic, but.
Yeah
W ould you think that we would get back to the sort of that price increase pace at some point?
Yeah. I think, we were seeing before the pandemic, average prices were increasing about 2% a year.
Yeah.
It was roughly in line with inflation.
Yeah.
Obviously, inflation has been a bit higher right now.
Yeah.
we've had the competing forces of, like, well, do you try to match that while at the same time you're trying to stimulate increased, you know, attendance and growth of people coming back?
Yeah.
Those are competing forces a bit. It's been a little bit of a balancing act. I do think we'll get back to a place where you will see just the normal type of inflationary price increases in over time.
Got it.
by the way, as more premium amenities enter the equation where there's opportunities, that also has a mix factor that also takes price up a bit as well, 'cause those have a higher cost with them.
Yeah. You touched upon this a bit, but, some of the price actions that you've done in the concessions fees, concession space, can you just speak to some of the strategies you've deployed there, how you've been able to execute that without disrupting incidents too much?
Yeah. Well, actually, it comes back to what we were talking about a moment ago. We've been very careful with our pricing, both for tickets as well as for food and beverage. Actually when we came back from the pandemic, we implemented some discount pricing. We saw a great lift in that in terms of overall incidents, we've been careful in how we've scaled that up, and it's had great benefit. I mean, we think the tactics we've deployed have been well received by consumers. When you look at our per cap performance, the growth we've seen, which has been significant, you know, in excess of 30% since 2019, 75% of that has come from volume, from incidence growth versus price.
By and large, those tactics to, you know, do that in a more careful, staged, slow way, have actually played out very well in terms of increased consumption from our audiences.
Got it. A topic we discussed with IMAX right before this session is just the general strength in PLF, right? Indexing is up across the industry weekend after weekend. First, what's kind of going on with the consumer interview? What's driving the premium demand? Secondly, how do you capitalize on that with XD?
Well, we've certainly seen an increase in demand for premium offerings coming out of the pandemic. That cuts across not just PLFs, but we've seen it-
Yeah.
-with recliners, with motion seats, with food and beverage, really across the board. It seems like that's a broad consumer trend, not limited to our industry, but across the board that just continues to hold. Specifically for our XDs which you asked about. I mean, we've been clearly leaning into that. Our XDs represent about 5% of our screens, and they've been generating about 14%-15% of our box office. That's, you know, that strong uptick that we've been seeing. What we're doing to try to further propagate that, we had put in a whole new marketing campaign around the value of those XDs, so we refreshed that. We've been adding XDs, second XDs and new XDs where we can, where the space and structure of our theaters allow it.
Like, we've been doing a range of things to try to reinforce those types of opportunities, for PLFs as well as many of these other types of premium amenities just 'cause we've seen how strong the response has been.
Got it. I wanna shift down on your income statement a bit to other revenue. A material portion of what you generate here is advertising that's based on your ESA with NCM.
Mm-hmm.
That company's in bankruptcy. It's a process that's complicated by another bankruptcy. Is there anything you can share about potential risks to that revenue stream when we might have some resolution on that?
Well, obviously bankruptcy is a complex process, and the process for NCM has really just been getting underway, so it's, you know, it's perhaps a bit premature to speculate on the overall impact that's gonna have on us and particularly our ESA. Certainly our focus is gonna be to maintain a fair market deal as we go through this process while we're trying to help NCM get back on their feet. I think the good news is the value of that screen time to advertisers is really unaffected by this deal, right? As box office continues to rebound and there's more and more people in our theaters, the value of those screen ads just continues to go up.
That by and large is the biggest driver of our revenue associated with NCM in that other revenue line item. We don't think that's gonna be affected. We're gonna obviously go through our process of sorting out how this deal is gonna look like longer term. In the near term, we're continuing to operate according to the existing contract that we've had in place.
Got it. Okay. Just before kind of moving on to costs, I wanna touch upon the writers' strike. We're 22 days in. Doesn't appear to be a whole lot of movement. That could get more complicated by an actors' strike at some point. How are you sort of thinking about potential risk to production, promotion, studios moving films around the sleeve?
Well, it's still a little hard to fully size up that risk at this point. I mean, it's clearly gonna depend on how long this strike progresses. I mean, look, obviously we're, you know, hopeful for a quick resolution, and certainly, you know, concerned for the impact it's having on all those involved. I think when you look back in time at some of the more recent longer strikes in history. We had the WGA strike back in 2007, 2008. That lasted for about 100 days, and it had relatively little impact on the flow of content.
What the studios did then and what they've done now in many cases is try to get out ahead of that, anticipating it, and then also be able to catch up after the fact. I think really we don't anticipate much of an impact on the majority of titles for this year and next, but it's ultimately gonna. It's also gonna boil down to how long this progresses and then if anything does kick in with any of these other guilds. It's we're just gonna have to kinda keep a close eye on that and see how it goes.
Got it. We have about 10 minutes left. Just if anyone in the room has a question, you can raise your hand, ask. No. Okay. On expenses, Sean, I was hoping you could- inda give us a sort of lay of the land. Where are you kind of seeing some easing cost pressures relative to last year? Where you may be seeing some certain costs pick up?
Well, I would say broadly speaking on the expense side, we've certainly seen improvements in some of the cost pressures that we were facing with a really tight labor market, I think retail in general was having a hard time filling the volume of bodies that it required, as well as a more challenging supply chain environment where things were disrupted in the flow of goods. That has certainly improved. We are clearly still contending with this higher inflationary environment, that still is persisting.
Probably the areas that are most notable, Again, even though they're improved, we're still seeing a slight uptick from where we were prior to the pandemic, would be in wage inflation for one, utilities, two, and then just various categories within food and beverage for our various inventory components. What we're doing to combat that is, you know, obviously lean more heavily into different productivity initiatives that we're working in general to try to improve margins. Looking for where we might be able to substitute products that have a better cost profile, and then looking at different types of suppliers where we can to source our products in a better, more efficient manner.
Okay. On the labor side, you said that's not so much a function of the market tightness so much as it is, you know, the mandates kind of...
Yeah. At this point, what we're dealing with, like at the end of 2021 and early 2022.
Mm-hmm
... was just a shortage of people going back to work, right? We couldn't get the bodies. That drove in a really elevated impact on wages just trying to get people in. That has normalized. Right now, in terms of getting the level of staff we need, we're in good shape in that respect. It's more just general market dynamics of a higher macroeconomic inflationary environment.
Got it.
More, you know, companies being faced with having to have a slightly higher increase in wage rates each year. I mean, we always have some of those mandated minimum wage rate increases that are part of the equation. On top of that, there's a little bit higher than normal inflationary factor just based on the macroeconomic environment we're in.
When we roll everything up, right, what's the kind of right way to think about where margins can grow? I know that's an unfair question 'cause it's very of a box office dependent. Do you have to get back to $11 billion+ of industry revenue to have 20% profitability?
Well, look, you're right. I mean, clearly the biggest driver for us is going to be attendance recovery, right? Our industry tends to have a high fixed cost structure, so we gain a lot of leverage as we have more volume of product and bodies coming through our doors, which helps with our margin rates. That said, certainly our goal is to return our margins to 20% or higher, even if we find ourselves with a depressed level of attendance relative to pre-pandemic levels. We're pursuing a whole series of initiatives to be able to do that. You know, everything from some of the things we talked about in the pricing arena, in marketing, showtime management, to third-party distribution, workforce management, labor types of opportunities, like a whole range of that, those types of programs.
We are dealing with some of these more near-term cost pressures, which create a little bit of a headwind. That's clearly our target, is to be able to recover to a 20% or higher margin rate. Like I said, we've got plans and efforts that there are a number of variables that could affect that, but that's certainly what we're gunning for.
Just following up on this point, can you remind me, like what, in terms of margin contribution, what DCIP, NCMI might have contributed pre-pandemic? As those are obviously not contributing at this point.
Our run rate, several years ago, pre-pandemic, DCIP for many years was delivering about $5 million of dividends a year through the course of. As it started to come to the end of its life, those dividends increased. In 2019, that scaled up to about $30 million.
Okay.
NCM was roughly about $30 million as well. Collectively, about $60 million in 2019. We haven't been receiving any of those dividends.
Yeah
... since. Like we expected DCIP to expire, and with what NCM has been going through, they haven't been paying dividends since then. You know, what I just told you with overall margins, clearly we're working toward that without the benefit of those without planning for the benefit of those distributions going forward. You know, obviously, as we said, NCM is still to be determined, but we weren't anticipating anything from them in the near term anyway based on.
Okay
... based on where they are. Yeah.
Sorry. just in terms of attendance recovery-
Mm-hmm
In thinking about increases in the price of streaming that's starting to happen now. Streaming that's starting to happen now. Do you think, just off the top of your head, does that help attendance, having higher streaming costs now? I mean, are you thinking people are gonna sort of start canceling and start going to the movies again? Or does that actually hurt you because it's, you know, yet another cost that the moviegoer has to have on their balance sheet?
I suppose it could. You know, interestingly, we haven't generally seen... I know there's a narrative out there that these are competing forces, streaming and going to the movies. Generally what we've seen more of is there are different trade-offs in the home when people are staying home to do, you know, do I watch this or that? Less so of people saying, "You know what? I'm not going out to the movies anymore. I'm gonna stay home." I mean, there could be some of that, like with more quality content in the home that you could have a little bit of that effect. Where maybe if people are canceling some of their subscriptions, it could lead to more.
We know from a lot of research that, you know, our most frequent moviegoers are the most active streamers of content. Conversely, what's interesting when you look at those studies, those individuals who don't go to the movies or rarely go to the movies are also those same consumers who don't stream significantly in the home. You don't see that big shift, 'cause like people who love content love to consume it in all these formats. It, it could have, I would think, maybe a slight benefit.
I think ultimately the goal is how do you get people to kinda choose to go out more than stay home more? For us, it's a matter of giving them a great experience with a great value that gets them to think about how they wanna spend their time versus the cost factor in the home. I mean, it may cause them to rationalize how many different services they have, but I'm not sure it would necessarily have a material effect on choosing to stay in versus go out. Just my. It's just my, you know, my estimate.
Maybe a question on pricing. I think the industry has talked about the potential for dynamic pricing for a long time.
Mm-hmm.
I realize obviously you wanna focus on getting as many bodies in the door as top priority, but maybe just talk a bit about, like, what's preventing the industry from moving to dynamic pricing. 'Cause you actually could lower prices, you know, in certain windows potentially as well, and, you know, do you think that would have a meaningful impact on margins longer term? Thanks.
Sure. Well, look, I certainly, as I mentioned, think there's a lot of opportunity to head down this path of more sophisticated channels. Some of that could ultimately be more of a dynamic type of structure. I think there's a little bit of that happening now. It's not quite dynamic like you'd see in the airline industry or, like, on Broadway and stuff like that. I mean, part of the challenges with that are in any given marketplace, whereas on Broadway there's one theater, right? You only got one place to go see that particular piece, that show. You know, in most markets there's multiple theaters. Being that most moviegoers are fairly price sensitive, that can help or it can hurt. It becomes just a more. I'm not saying it's impossible, but it's a more complicated process given that.
There's the studio side of things too where, some of the conversations you get into with the studios is like, "Well, wait a minute." There's different viewpoints on it. Some of them are like, "Oh, I don't want you reducing the price of my film because that would suggest it's of lower quality than something else." Whether that's right or wrong, don't know, but that's just some of the dynamics that have to be worked through to get to that type of situation. Then there's just all the, you know, the infrastructure to build to kind of get there. I could see some, at some point down the line having a, you know, a version of pricing that's closer to that. It's just gonna take a little while to build towards it.
For now, what we've done is, you know, we've got varied pricing through the day and week. There is some demand pricing happening in the marketplace where there's opportunities to do that. We have moments like a Discount Tuesday, where consumers know if they're very price sensitive, that's something they can look to on a sustained basis for incremental value versus... You get the added element of, like, There's those folks who say, "Well, what do you wanna do this weekend?" "I don't know. I haven't seen a movie. Let's go out." Like, those moments, there may be some opportunity there, tend to be less price sensitive. Like, reducing price may have less of an effect in those scenarios. It's just, it's complicated in the profile of the audiences, the studios, the competitive landscape.
Not to say that there isn't potential on the line as we continue to move down this path to see something that's a bit more of a dynamic type of structure.
Sean, just last one from me. You recently paid down $100 million, I think of your most expensive notes. You're out in the market on your term loan. Maybe just discuss positioning for the balance sheet, aggregate impact to interest expense, maybe we could expect.
Sure. Well, look, we've had a long history of being proactive as it pertains to refinancing our debt and staying ahead of approaching maturities. We took on a $700 million of debt during the pandemic, our aim is to pay that back down and return to about a two to three time leverage ratio. The $100 million you mentioned was the first step of that. You know, being encouraged by the continued rebound of the industry and the improved financial position of our company, we felt like it was a good moment to start chipping away at that. Specific to the term loan that you mentioned, yes, we're in the market. We're in the market to both refinance that, extend the maturity to 2030.
Simultaneously, also amending, extending, and upsizing our revolver to $125 million. All in, you know, interest expense expectations, some of that's gonna be dependent just on the final pricing of the term loan, how interest rates continue to move with the small piece of our, of our debt that isn't fixed, we have a small piece that's variable, and just the timing of the extinguishment of some of the COVID-related debt we took on. We've been around $150 million for the past year. I think in the near term, that's probably a good, a good number to look to. I don't think it's gonna shift, you know, significantly from that, at least in the short run. Over time, you know, our aim is to bring that down.
Great. All right. Thanks so much, Sean.
All right. Thank you, David. Thank you all for for joining. Really appreciate it.