AMC theaters lose $2.2 billion due to the Coronavirus COVID-19.
AMC Theaters, the American largest cinema group, reports losing $2.2 billion as a result of the global lockdown caused by the pandemic. In a statement, the company plans to fully reopen in July in an attempt to fix the current situation. The company acknowledged they it could potentially face bankruptcy, saying there is “substantial doubt exists” about the company’s future.
The CEO Adam Aron said in a statement “we are confident we are taking the necessary steps on a broad array of fronts to ensure AMC’s future success as we navigate these turbulent and uncertain times… in the end, AMC will both succeed and prosper.”
Global cinemas were hit hard by the Coronavirus COVID-19 crisis, which forced theaters around the world to close. Movie theaters in countries including Hong Kong, which have already started reopening. But, many theaters are forced to open at a lower capacity for guests to meet social distancing guidelines.
The rise in popularity of streaming services has impacted the cinema industry. AMC launched its own service, called AMC Theaters on Demand, in 2019.
(Original Posting: June 11, 2018) AMC Theaters warned the company may not survive the Coronavirus pandemic.
COVID-19 has closed AMC theaters across the country and left film studios looking for ways to distribute their content directly to viewers over streaming platforms.
AMC, the largest U.S. chain said they do not have enough money to reopen its theaters this summer. Even if the company was allowed to open, it would need more money. AMC noted that people could be afraid to return to theaters, but hopes people would enjoy going to the movies after months of social distancing.
“Due to these factors, substantial doubt exists about our ability to continue as a going concern for a reasonable period of time,” AMC wrote in a regulatory filing.
Meanwhile, Cinemark plans to reopen theaters on June 19th. The company said on Wednesday they believe they have enough cash to last the rest of the year, even if theaters remain closed. The company’s CEO said he does not expect the industry to return to normal until 2022. Cinemark said they are taking steps to bring moviegoers back including disinfecting mornings and before each showtime.
The company also said they would stay in debt if local governments require movie theaters to operate at 50% occupancy.
A major concern for theatre chains is movie studios could release their content to streaming services they already own. Since the pandemic, entertainment companies have delayed most of their movie release dates.
This news comes after a study by MoffettNathanson which stated revenues from ticket sales will be cut in half in comparison to 2019. The analysts see numbers dropping from $11.4 billion in 2019 to $5.5 billion in 2020. That’s a 52% plunge, and it’s a drop that could be even steeper if cinemas don’t reopen in July.
“Given the uncertainty around the key questions we mention above, including sticking to July release dates, when key markets reopen and willingness of movie-goers to return before a vaccine, our estimates today are very much a work in process with lots of volatility in the months ahead,” the note’s authors report.
More Project Casting Entertainment news: