On Wednesday, AMC Theatres, the world's biggest theater chain, made a very dire claim by publicizing the "substantial doubt" it has that it can stay in business after taking such a steep financial hit due to the COVID-19 pandemic.
To those who may have read between the lines previously, when AMC said it wouldn't be showing Universal films anymore after the studio had such great success with its on-demand releases, you may have felt a development like this coming. But Wednesday's announcement certainly pulls back the curtain on what a shockwave the coronavirus has sent through the world of entertainment.
CNN reports that AMC anticipates losses between $2.1 billion and $2.4 billion in the first quarter. The company has stated that its 2020 revenue has fallen by about 22 percent, to $941.5 million (from $1.2 billion during the same period in 2019). But that was in a quarter where things operated normally up until the very end. as for the second quarter of 2020, things are significantly worse.
"We are generating effectively no revenue," AMC said in a regulatory filing from Wednesday.
The company goes on to say that it'll keep its eye on developments that pertain to governments pulling back restrictions that have hindered the industry. But even if those restrictions are pulled back, AMC still has a lot of challenges to overcome. As an example, CNN cites the very real threat that major studios could/will opt to not release major films for theatres that can only fill to a partial capacity.
As AMC put it, "Even if governmental operating restrictions are lifted in certain jurisdictions, distributors may delay the release of new films until such time that operating restrictions are eased more broadly domestically and internationally, which may further limit our operations."
As of April, it claimed to have a liquid cash balance of $718.3 million.
At the moment, AMC believes that it has enough money to get theaters back up and running by "summer or later." But it also said that its success after that will be largely dependent on being able to open back up fully, that studios put out releases people want to see, and that people actually venture to the theaters to watch those films.
Not a good thing.