- AMC Entertainment, the largest movie theater chain, said Tuesday that its cash situation is dire as important markets remain closed.
- Even if they were allowed to open, there aren’t many new movies to show. Only 4 are set to premiere between now and the start of next year.
- Shares of the company plunged following the company’s statement Tuesday, and are down 50% this year.
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The world’s largest movie theater chain issued a dire warning on Tuesday.
AMC Entertainment, which operates nearly 600 theaters in the US and another 358 abroad through partnerships, says a lack of new movie releases and the ongoing closure of key markets like California and New York have left it bleeding cash and uncertain about when revenue might return to previous levels.
In more technical terms, “there is a significant risk that these potential sources of liquidity will not be realized or that they will be insufficient to generate the material amounts of additional liquidity that would be required until the Company is able to achieve more normalized levels of operating revenues,” it said in the regulatory filing.
“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 theater company said.
Shares of AMC plunged more than 7% when markets opened Tuesday following the filing. The stock has lost half its market value this year due to the pandemic.
494 of the company’s 598 theaters are open. However, the remaining 17% — which include locations in New York, California, Washington, North Carolina, and Maryland — made up almost a quarter of revenue last year.
To make things worse, there’s a dearth of new movie releases to lure would-be moviegoers back. Only four major films are set to be released through the end of the year after Disney opted to release “Mulan” and “Soul” digitally.
And as the US’ coronavirus outbreak shows no signs of slowing, AMC’s largest competitor, Regal, has taken a more aggressive approach in begging officials to allow for re-opening.
“Despite our work, positive feedback from our customers and the fact that there has been no evidence to date linking any COVID cases with cinemas, we have not been given a route to reopen in New York, although other indoor activities – like indoor dining, bowling and casinos were already allowed,” the number-two chain said last week as it shuttered all of its 536 locations.
Other competitors like Cinemark and Alamo Drafthouse have gotten creative, selling private theater rentals for as low as $99 to lure back movie fans.
Industry experts and insiders say the crisis, already a boon for streaming competitors, could further blur the line between theatrical and at-home cinematic experiences.
“A blockbuster doesn’t have to be defined by box office,” said a Universal insider, who requested anonymity because they weren’t authorized to speak publicly about its strategy. “It can be defined by that, or PVOD transactions, or something else. The blockbuster isn’t dead, but it will evolve.”