In late August, AMC reopened more than 100 theaters across the country for the first time since March, when the spread of COVID-19 forced film exhibitors around the world to shutter. Since then, the chain has been been struggling as studios have opted to take upcoming tentpoles like No Time to Die and Pixar’s Soul off the calendar. While it’s long been clear that exhibitors like AMC are facing immense difficulties, the company’s latest public filings show just how dire the situation has become. The exhibitor now says it could run out of cash by the end of this year, or by early 2021.
According to Variety, AMC rang the alarm bell about its cash flow issues in Tuesday’s public filings. Even though the chain has opened 494 of its 598 U.S. locations, attendance is down by 85 percent, felled by the ongoing threat of the virus, social distancing restrictions, and a lack of exciting new films. The release of Christopher Nolan’s Tenet in early September was a lone bright spot, but all the other big releases that were set to follow have since been pulled from the schedule and instead re-situated in the hopefully greener pastures of 2021.
“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,” AMC’s public filing notes, per Variety. “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.”
AMC’s struggle is exemplary of the issues facing theater chains around the world, arriving on the heels of Regal’s decision to re-close all 536 of its theaters in the U.S. on October 8. Back in September, that chain was quick to follow AMC’s decision to re-open—but the reality of the pandemic has since prompted the exhibitor to, again, close up shop. “This is not a decision we made lightly, and we did everything in our power to support a safe and sustainable reopening in the U.S.,” Regal said in a statement. The chain also acknowledged that the closures would impact 40,000 Regal employees across the country.
It doesn’t help that the pandemic has forced companies to rethink their streaming strategies, prioritizing that method over traditional theatrical releases. Disney is one such studio making its new priorities clear. The company announced Monday that it’s reorganizing its business to “further accelerate” its streaming strategy. The studio previously pulled Mulan off the release schedule earlier this year and instead made the film available as a premium rental on its streaming service Disney+, an unprecedented move for a movie with that kind of budget. The company will continue testing out the Mulan model by releasing Pixar’s Soul exclusively on Disney+ on Christmas Day, skipping a theatrical release entirely. Like Mulan, the movie will be available to rent for $30. Disney+ launched in late 2019 and has since become a strong competitor to giants like Netflix in the streaming wars, accruing more than 60 million subscribers.
None of this bodes well for traditional theaters, of course, whose worst fears have been accelerated by the pandemic. Still, 2021 could wind up being a particularly booming year, considering all the blockbusters that have been squeezed onto next year’s schedule—from Avatar 2 to the new Fast and Furious movie to superhero movies like Black Widow and Wonder Woman 1984. What’s unclear, however, is how long the pandemic will stretch on, and whether its calamitous course will also disrupt theaters into the following year—pushing chains like AMC into an even tougher spot.
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