In a public financial filing released on Wednesday, AMC Theatres, the largest cinema chain in the world, expressed doubt over whether they will be able to remain in business following the shutdown. The company, which operates over 11,000 cinema screens in 905 theaters across the USA and Europe, was forced to shut all of its screens in March due to the coronavirus pandemic. The theater chain expressed concern about its financial viability at the time, and many analysts expressed doubts over whether the company would survive the shutdown.
The plot then thickened, with reports saying that Amazon was considering an acquisition bid, something that would make sense given the company would likely sell for very little in the current climate. There is also the small matter of AMC's battle with Universal over the latter's decision to stream Trolls: World Tour on the day it was meant to be released to theaters. That spat hasn't been resolved, and means that AMC may miss out on a number of upcoming Universal releases, like the next James Bond film, No Time To Die, unless the dispute is resolved soon.
The trouble seems to have deepened, with AMC acknowledging in public papers filed on Wednesday that it is in serious financial trouble. It is reporting increased losses, as well as a drastic drop in revenue for the first quarter of the year thanks to the pandemic shutdown. And that will only get worse, as this report doesn't include April, May and June, where AMC will ostensibly have zero revenue, during a time of year which is usually particularly profitable for theater chains. This leads AMC to say that they have "substantial doubt" about their ability to operate in future. The full quote is below.
"If we do not recommence operations within our estimated timeline, we will require additional capital and may also require additional financing if, for example, our operations do not generate the expected revenues or a recurrence of COVID-19 were to cause another suspension of operations. Such additional financing may not be available on favorable terms or at all. Due to these factors, substantial doubt exists about our ability to continue as a going concern for a reasonable period of time."
The report also goes on to mention how AMC has cut back on costs during the pandemic. It also cites the lack of available releases as a threat to their business, as they may not be able to fill theaters due to lack of available content, even when they are allowed to reopen.
The news that AMC is so close to bankruptcy is sobering. If the largest theater chain in the world can't remain viable during the pandemic, it casts doubt on all cinema chains, large and small. Many have speculated how the pandemic might change viewing habits in the long term, and this is the first sign that the theater experience may become a niche part of the movie and TV world in future. Let's hope it's not as drastic as that.
Source: AMC