AMC Theaters RIP Thanks to Coronavirus?
Can anyone save the movie industry from a shutdown-induced doom?
Last week, the parent company of Regal Cinemas announced that it was closing its theaters in the United States and the United Kingdom, citing the movement of high-profile releases off of the 2020 calendar, and other challenges related to the coronavirus pandemic.
The same week AMC, the other major chain in the United States, announced that it was doing the opposite. AMC is going to keep theaters open and continue its gradual rollout of theater re-openings. In a statement at the time, AMC’s CEO cited several movies still on the release schedule for the rest of 2020.
One of those films, Pixar’s “Soul,” has since been moved off the theatrical calendar altogether and on to Disney+. And now, there are indications that the picture for AMC isn’t as rosy as the company implied earlier this month.
In an SEC filing Tuesday, AMC expressed concern that it may run out of money as soon as the end of this year.
“Given the reduced movie slate for the fourth quarter, in the absence of significant increases in attendance from current levels or incremental sources of liquidity, at the existing cash burn rate, the company anticipates that existing cash resources would be largely depleted by the end of 2020 or early 2021,” the company stated in the filing, as cited by The Street.
“Thereafter, to meet its obligations as they become due, the company will require additional sources of liquidity or increases in attendance levels. The required amounts of additional liquidity are expected to be material,” the company said.
Throughout the year, AMC has announced various credit and debt machinations, in order to keep it afloat through the pandemic. It also announced a deal with Universal to shrink the home release window to just seventeen days, in exchange for revenue sharing of premium VOD releases.
At the end of September, a long list of Hollywood luminaries, as well as industry associations for the motion picture and exhibition industries, signed a letter to Congress asking for aid to the movie theater industry, as part of any coronavirus aid package being negotiated in Washington. It’s not clear if any such rescue is on the table in the current talks.
Back in the spring, rumors were swirling that Amazon may be eying a bid for AMC Theaters. No such deal ever came to fruition, although it could be revisited if AMC were to enter bankruptcy or anywhere close to it. AMC’s current market cap, as of Tuesday morning, is just over $405 million, while Amazon’s is $1.725 trillion, indicating that the latter company could likely afford to pay a premium in order to enter the exhibition business.
In July, one analyst suggested that Netflix and Amazon should make a move to buy movie theaters chains.
Stephen Silver, a technology writer for The National Interest, is a journalist, essayist and film critic, who is also a contributor to Philly Voice, Philadelphia Weekly, the Jewish Telegraphic Agency, Living Life Fearless, Backstage magazine, Broad Street Review and Splice Today. The co-founder of the Philadelphia Film Critics Circle, Stephen lives in suburban Philadelphia with his wife and two sons. Follow him on Twitter at @StephenSilver.