Galway arthouse cinema Pálás is to close its doors at the end of February, seven years after it first opened, the Light House Cinema Group has announced.
The company, owned by Ed Guiney and Andrew Lowe of Element Pictures, said it had made “the difficult decision” to shut down Pálás after “months of engagement” with Galway City Council, the Department of Culture, the Western Development Commission and Screen Ireland.
It said all parties had “worked together to try to save the cinema”, but to no avail.
“Regrettably, no viable alternative funding solution has been identified at this time and this leaves us with no option but to close the doors,” it said on Wednesday.
The cinema has 13 employees in total, nine of whom are full-time.
The Light House Cinema Group invested €1.5 million in Pálás Cinema in 2018 with the aim of establishing an arthouse venue and cultural space in Galway city. Since then, it has brought 3,000 independent films to Galway audiences, as well as hosting festival events, Q&As and local school screenings.
“The Pálás team is very proud of these achievements, of the cultural partnerships that have been forged, the loyal audience that has been fostered and the incredible group of people that have worked tirelessly at Pálás Cinema to help fulfil its mission,” it said.
“However, the financial situation at the cinema is stark and continuing to operate at the level of financial loss isn’t an option.”
Since the original investment, the cinema has incurred losses of more than €1.8 million and is now incurring losses of about €250,000 a year to stay open, it said.
“Rising costs, the impact of Covid and the oversaturation of commercial cinemas in the Galway area have all contributed to the situation that is faced today.”
The group added that the Pálás team would “continue to provide the best possible film-going experience until the end of February” and that it would facilitate an orderly transition of the building to its owners, Galway City Council.
“The Light House Group recognises the impact that this decision will have on the team that works at Pálás and is providing all available supports to them during this difficult time.”
The Light House Cinema in Smithfield in Dublin, the only other cinema in the group, remains open.
The Pálás cinema originally took 12 years to complete amid construction and financing issues. It was backed by about €8.4 million in public funding, but the organisation behind the initial project, Solas-Galway Picture Palace Teo, ended up going into liquidation in 2017.
Shortly after it opened in 2018 as part of independent film and television production company Element Pictures, the Public Accounts Committee (Pac) scrutinised the public investment. Then Fianna Fáil TD and Pac member Marc MacSharry claimed it represented “the most appalling waste and poor use of public funds” given it was ultimately run by a private company as a for-profit cinema.
[ Film production powerhouse Element Pictures sees profits halveOpens in new window ]
Accounts for Element Pictures, which has been majority owned by UK group Fremantle since 2022, show that Element forgave connected company loans of €2.46 million that year as the directors felt “there was no chance of recoverability on these loans”. Most of this related to a sum of €2.26 million due from Picture Palace Cinema Ltd, the company vehicle for Pálás.
Picture Palace Cinema Ltd made a loss of €618,717 last year, its accounts indicate.
Volta, an Irish video-on-demand platform set up by Element Pictures in 2012, shut down its service at the end of November, citing rising costs and “the growing challenge of operating a niche video-on-demand platform in a market dominated by global streaming services”.
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