As a result of the coronavirus pandemic greatly impacting moviegoing, analysts believe AMC Theatres could file for bankruptcy. The pandemic has led to numerous changes to every day life, with schools and businesses closing, travel being restricted, and countless people staying inside their homes. The goal is to "flatten the curve," or slow the spread of the disease. Following governments putting restrictions on the number of people gathering in one area, movie theaters across the US closed their doors indefinitely. AMC was among the chains to do so and ran into financial hardships almost immediately. The company was forced to furlough many of its employees to try and cope with the strain.
Just last week, AMC's CEO Adam Aron shared his belief that theaters would be able to reopen by mid-June. Those estimates might be a bit optimistic, as no one is really certain about when the pandemic will be over. Film studios have certainly braced for a long-term shutdown, as most of them have shifted their big movies from May and June to either later in the year or next year entirely. As of right now, the only major studio film opening in June is Disney's Soul. There are a few that remain in (or have been moved to) July, like Warner Bros. Tenet and Disney's Mulan, but many still wonder if they will be able to hold onto those dates.
Now THR has reported that experts believe AMC won't be able to weather this storm. MKM Partners analyst Eric Handler estimates that "bankruptcy appears likely" for the chain, and that they will remain closed for far longer than Aron previously stated. He believes this to be the case regardless of any kind of governmental assistance. Handler also described AMC as "the exhibition company we view with the least financial flexibility." Per Handler's report:
Based on our view that theaters will be closed until at least August and our belief that AMC lacks the liquidity to stay afloat until that time, we expect the company will soon be faced with filing for bankruptcy. Further fueling our liquidity concerns is AMC's decision to stop paying rents to landlords effective April.
The coronavirus pandemic has hurt countless industries and businesses, and its effects might be felt long after it has finished. A study was conducted to evaluate how comfortable people will feel about returning to public spaces once the pandemic clears, and the results indicated increased weariness in venturing to movie theaters. This could further hurt theaters like AMC, who are already growing concerned about the increased threat of streaming services.
Despite all the bad news, there are still plenty who support the theatrical experience and have advocated for movie fans to help theaters during this time. Patty Jenkins, Christopher Nolan, and Edgar Wright have all shared their support for theaters, and a fair amount of moviegoers have still indicated they will return to theaters. While it's uncertain whether AMC Theatres will be among the theaters that can get back to normal, there are many still rooting for its survival.
Source: THR