Movie theater megachain AMC Entertainment warned that it might go under as soon as January in a new SEC filing.
Deadline reports the company that operates nearly 600 movie theaters in the United States is facing a massive shortfall of cash in light of the coronavirus pandemic. Without outside infusions of money, there's very little the chain can do to stay afloat. AMC said it needs to raise $750 million just to weather the next year. And without a return to close-to-normal cinema attendance, that might not be enough.
AMC reported a 92 percent dropoff in attendance between this time last year and today. To keep going, it would need attendance to be back up to 80 percent of its usual business by the back half of 2021. The company has pulled out all the stops to try and keep operating, deferring $400 million in rent payments and accepting $100 million from Mudrick Capital Management in exchange for 13.7 million shares.
“A significant spike in coronavirus cases, together with delays of major movie releases or the direct or simultaneous release of movie titles to the home video or streaming markets in lieu of theatre exhibition, have led to theatre closures, prevented the opening of theatres in major markets and have had, and are expected to continue to have in the future, a material adverse impact on theatre attendance levels and our business," AMC said before sending its ire directly at Warner Bros. "These challenges have been exacerbated by the announcement by Warner Bros. that its entire studio film slate for 2021 will move to simultaneous release, which may result in other studios adopting a similar strategy.”
Warner Bros.' HBO Max plan has added an extra layer of uncertainty to the future of theaters post-crisis, and AMC said as much.
“We cannot predict what supply of movie titles will be available for theatrical exhibition once moviegoers are prepared to return in large numbers," AMC wrote. "Nor can we know with certainty the impact of the Warner Bros. announcement or any similar announcements regarding the release of movie titles concurrently to the home video or streaming markets, as those arrangements will be subject to negotiations that have not yet taken place.”
Directly after Warner's announcement last week, AMC—which just launched a private theater rentals program—said the studio "intends to sacrifice a considerable portion of the profitability of its movie studio division, and that of its production partners and filmmakers, to subsidize its HBO Max start up. As for AMC, we will do all in our power to ensure that Warner does not do so at our expense. We will aggressively pursue economic terms that preserve our business."
