AMC Theaters is warning investors that without a steady stream of movies to bring people to the remaining theaters that have opened, the company could run out of cash by the end of 2020.
It is no surprise that the theater industry suffers. Almost every major blockbuster (movies that people might visit as a potential theatrical central epidemic) has been pushed back into 2021, and open theaters are still operating at low capacity. The results are not great; Warner Bros. and Christopher Nolans Tenet – A studio tried to release a significant blockbuster – failed to do so in the United States, where theaters are closed in major markets such as New York City and Los Angeles. Now is the next big movie Wonder Woman 1984, And there is always the opportunity to go beyond its current December 25th release date.
To avoid the potentially devastating financial impact of the ongoing widespread epidemic on its business, AMC is building some potential ways to raise cash, according to public documents filed today. These include ongoing negotiations with homeowners about lease payments at theater venues, starting joint ventures with other business partners and selling potential assets. Although it is still standing, “at the current cash burn rate, [AMC] Existing large cash resources are expected to be depleted by the end of 2020 or 2021. “
Sean Goodman, AMC’s chief financial officer, is also warning investors through public documents that the above potential sources of additional liquidity may not actually occur – or, he continued, even if AMC theaters increase some form of liquidity. By that probable route, it will not be enough to compensate for the loss of AMC. Effectively, Goodman lets investors know that it is extremely difficult to predict anything right now, and that “there is no guarantee” that any of the above plans can properly solve the problem.
“Our ability to predict COVID-19 epidemics is uncertain due to the unknown magnitude and duration of the epidemic,” the documents said.
AMC Theaters is not the only company facing an increasingly worrying future. Regal, owned by Cineworld, announced last week that it would currently close its theaters. Doing so will reduce costs, which CEO Moki Gridinger told CNBC. Said Theaters were growing by keeping them open. AMC theaters are currently the only operating places that are open at about 20-40 percent capacity. That U.S. In approximately 83 percent of theaters are represented in the country, according to the company. After the business resumes, attendance in theaters is down 85 percent year-round.
The biggest uncertainty like the AMC face is that theater chains are unable to predict customer behavior. Even if theaters make an announcement next year, people may continue to delay studio movies if they are not at home. Studios such as Disney, Warner Bros. and Universal could move their titles to streaming services. AMC Theaters is working with Universal to shorten the theatrical window to just 17 days, which will allow Universal to sell to customers at a faster rate and give AMC theaters a share of the revenue.
