New York's Ziegfeld Theatre in Danger of Closing

The modern-day movie palace in Midtown is the favorite venue for glitzy Hollywood premieres.

New York's storied Ziegfeld Theatre is on the verge of closing its doors as its operators have grown frustrated with the money-losing moviehouse and seek someone to take over the lease, which is said to run through 2008.

In an interview with The Hollywood Reporter, James Dolan, CEO of Cablevision, which runs the Ziegfeld, was asked whether he planned to close the legendary venue that has played host to countless Hollywood premieres.

“Yeah. Probably," Dolan said. "It loses a lot of money. The theater business is a tough business."

But on Tuesday, Cablevision said in a statement that "the situation has changed, and the Ziegfeld will remain open for the foreseeable future." A spokesman wouldn't elaborate, but it's safe to say a search is on for someone to take over the three years remaining on Cablevision's lease on the property.

The Ziegfeld, built in 1969 at 141 W. 54th Street near the site of the original Ziegfeld Theatre, is the largest cinema in the city with nearly 1,131 seats. As such, it is the favorite venue for glitzy film premieres, more and more of which are being held in Manhattan with the return of NBC's The Tonight Show back to New York. But beyond those Hollywood events, the Ziegfeld is gasping for revenue, with capacity often running at less than five percent.

The sumptuous Ziegfeld is one of New York's last surviving single-screen theaters but, like other single-screen cinemas, has seen traffic evaporate with the rise of multiplexes and, more recently, stadium seating and other amenities. In Manhattan, the Ziegfeld has been unable to compete with the likes of the AMC Lincoln Square 13 and the AMC Empire 25 in Times Square, both of which offer Imax auditoriums and can show multiple films.

Even if it shutters, it is possible that the Ziegfeld would re-open for special events, which could include some premieres. Otherwise, Hollywood will be forced to use less-ideal venues in terms of seating capacity.

The most likely alternative for premiers is the AMC multiplex in Lincoln Square, which boasts one auditorium with 784 seats and a 590-seat Imax auditorium. Generally speaking, studios don't want to go too far Uptown or Downtown, since most talent stays in Midtown.

The Ziegfeld is managed by Bow Tie Cinemas on behalf of Cablevision, which all but exited the theater exhibition business in 2012 after the sale of Clearview Cinemas. The Ziegfeld, previously part of Clearview, was the only property it retained.