AMC Theaters is warning investors that without the steady flow of movies to bring people to the remaining theaters that have opened, the company may run out of cash by the end of 2020.
Not surprisingly, the theater industry has taken a hit. Almost all blockbusters (movies that could push people to visit a theater in the middle of a pandemic) have been postponed to 2021, and theaters remain open at low capacities. The results are not great. Warner Bros and Christopher Nolan Tenet – The groundbreaking movie the studio tried to release – Failed to perform in the United States, As theaters in major markets such as New York City and Los Angeles remain closed. The next big movie is Wonder Woman 1984, And there is always a chance to move from its current current The release date is December 25.
In an effort to avoid the potentially devastating financial impact of the ongoing pandemic on its business, AMC is laying out some potential ways to raise funds, according to Public documents filed today. This includes ongoing negotiations with landlords about rental payments at theater sites, starting joint ventures with other business partners, and possibly selling assets. However, as now, “at the current cash burning rate, [AMC] It predicts that current cash resources will be largely depleted by the end of 2020 or early 2021. ‘
AMC Chief Financial Officer Sean Goodman also warns investors through public documents that there is a “significant risk” that the aforementioned potential sources of additional liquidity may not actually occur – or, he continued, even if AMC Theater raises some form of liquidity from During those potential routes, this would not be sufficient to offset AMC’s losses. Effectively, Goodman informs investors that it is extremely difficult to predict anything at the moment, and “there can be no guarantee” that any of the above plans can solve the problem properly.
“Our predictability is uncertain due to the unknown size and duration of the COVID-19 pandemic,” the documents read.
AMC Theaters isn’t the only company facing an increasingly anxious future. Regal, owned by Cineworld, It was announced last week It will close its theaters for the time being. Doing so will reduce costs, i.e. CEO Mooky Greidinger told CNBC It was increasing by keeping theaters open. AMC theaters currently operate in open operating locations with capacities between 20 and 40 percent. That’s roughly 83 percent of theaters in the United States, according to the company. But since work resumed, attendance in theaters has dropped 85 percent year on year.
One of the biggest chains of uncertainty theaters like the AMC face is the unpredictability of consumer behavior. Even if theaters open en masse next year, studios may still delay movies if people stay home. Studios like Disney, Warner Bros, and Universal can transfer Broadcast service addresses. AMC Theaters is Working with Universal To shorten the theatrical window to just 17 days, which would allow Universal to sell it directly to consumers at a faster rate and give AMC Theater a portion of the revenue.