America’s largest movie chain AMC Theaters is on the verge of running out of money. Following the delays of the last few remaining major 2020 releases No Time to Die and Dune into next year, the chain is struggling to keep itself profitable.
As The Wall Street Journal reported:
“The world’s largest movie-theater company may run out of cash by year’s end if it doesn’t raise additional funds or get more people back to theaters following pandemic shutdowns that have disrupted businesses dependent on consumers gathering in public spaces. AMC Entertainment Holdings Inc. said Tuesday that it has reopened 83% of its U.S. theaters, but that attendance is down about 85% at those theaters from the year before. At the company’s current cash-burn rate, its reserves would be depleted by the end of this year…”Wall Street Journal, October 13, 2020
The news is coming on the heels of America’s second largest movie chain Regal Theaters shuttering all of their locations for a second time this year on October 8th.
Movies theaters as a whole are struggling to stay open in the aftermath of the COVID epidemic with dwindling audiences. While smaller chains and privately owned movie theaters are still operational for the time being, it’s unclear how long theaters with less capital are going to weather even with smaller staffs and revival screenings of classic movies like Star Wars and Jurassic Park. Without new movies, it’s unlikely the majority of theaters will stay open for very long.
The situation may be more serious for AMC though. Rumors have swirled around the company’s financial situation since before April of this year. The company was in $4.9 billion in debt at the start of the pandemic.
Since the reopening in late August, the majority of new film releases have struggled to gross more than $1 million/week. Profits aren’t meeting their operational costs.
Despite the situation, the company’s CEO has denied rumors of impending bankruptcy. In an interview with Bloomberg, he emphasized that their current plan is to raise funds to weather out the current financial problems and lack of viewership.
“We’d like to succeed in this effort. If we don’t, obviously we’ll have to consider other options down the road. But that time has not yet arrived, and any reports to the contrary are wholly inaccurate.”
This estimation is likely overly optimistic. It’s unclear IF movie theaters will ever be a functional industry again after the public’s viewing habits have been reshaped by six months of COVID lockdowns and general paranoia. Only time will tell if movie theaters will go the way of Drive-Ins or survive to see 2022.