AMC Theaters are in danger of running out of money by the end of 2020 or early 2021. Movie theaters have been struggling since back in March as a result of the coronavirus pandemic. After closing their doors for several months, many theaters started to re-open over the summer in time for the release of New Mutants and Christopher Nolan's Tenet. While both films were expected to be major box office draws, neither did nearly as well as hoped. The repeatedly-delayed New Mutants only grossed $7 million in its opening weekend, while Tenet took in a meager $10 million. Studios have taken the hint from Tenet's underperformance and have continued to delay their film releases into 2021.
Meanwhile, theaters in major cities like Los Angeles and New York City have remained closed since March, and Regal Cinemas announced their decision to re-close all theaters indefinitely in early October. It was expected that other theater chains would soon follow suit, considering the repeated delays of blockbusters set to premiere this year. Initially rescheduled for November 2020, Daniel Craig's fifth and final James Bond film, No Time to Die, has been further delayed until April 2021. Last week, Warner Bros. delayed Denis Villeneuve's Dune until October 2021 after it was initially set to come out later this year. The continued delays have taken a toll on theater chains, especially AMC.
Per Variety, AMC announced Tuesday that it could run out of money before the end of 2020 or early 2021 if more customers don't return to theaters soon. AMC noted in public filings that major movie releases scheduled for the fourth quarter have been delayed until 2021 or sent to streaming. "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," said AMC. "Thereafter, to meet its obligations as they become due, the Company will require additional sources of liquidity or increases in attendance levels. The required amounts of additional liquidity are expected to be material." Attendance at the 494 U.S. locations opened recently is down about 85%, and AMC's stock fell 6.9 percent Tuesday.
The theater chain noted that it is considering several options to meet financial obligations, including additional debt and equity financing, renegotiating with landlords over lease payments, selling assets or joint venture, or other opportunities with business partners. AMC said that at the current cash burn rate, their financial resources would run out.
With major movies like No Time to Die and Dune being pushed back to 2021 and Pixar's Soul being pulled from theaters entirely and sent straight to Disney+, theaters will continue to suffer. Even with AMC's health and safety precautions, bringing audiences back to theaters after the shutdown has proven a significant challenge. Back in September, AMC offered a promotion for moviegoers to pay $5 for their first month in an attempt to bring in more customers. While AMC has not decided to follow Regal's decision to close its doors yet, it's clear that it will not be able to remain open for much longer as movie releases continue to be delayed.
Source: Variety