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AMC Theatres could run out of money by the end of the year

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  • AMC Theatres could run out of money by the end of the year
    New York (CNN Business)Illustrating how dire the situation is for the movie theater industry, the world's largest theater chain could run out of money by the end of the year.

    AMC Theatres said Tuesday that its existing cash resources would be "largely depleted" by the end of 2020 or early 2021 because of the "reduced movie slate for the fourth quarter," as well as "the absence of significant increases in attendance from current levels."

    The company said it has two ways out of its cash crisis: Either more customers need to buy tickets, or it will have to find new ways to borrow money.

    Getting butts in seats has proven a major challenge. As of October 9, AMC reopened 494 of its nearly 600 US theaters at a seating capacity between 20% and 40%. But AMC (AMC) isn't filling the limited seats it's offering: Since the US theatrical market reopened in the late summer, it has served more than 2.2 million guests. That represents an attendance decline of 85% compared to last year.
    Boosting liquidity won't be easy without a return to business-as-usual. It's exploring additional debt financing, renegotiations with landlords, and even potential sales of assets. But AMC threw cold water on those options.

    "There is a significant risk that these potential sources of liquidity will not be realized or that they will be insufficient to generate the material amounts of additional liquidity that would be required until the company is able to achieve more normalized levels of operating revenues," AMC said.
    AMC's stock fell about 6% Tuesday.

    The news of AMC's cash crunch comes as the movie theater industry is struggling to survive during the pandemic.

    Cineworld Group, the owner of Regal Cinemas, said last week it would suspend operations at all of its theaters in the United States and the United Kingdom as cases continue to spread. And the US box office has seen anemic returns, which led to studios deciding to delay major films.
    Films like Marvel's "Black Widow" and the new James Bond title "No Time to Die" have been pushed to next year while Pixar's "Soul" has been pulled from theaters entirely to debut on Disney's streaming service, Disney+.Since shutting their doors in March, theaters have tried to reopen and do so with health measures to help curb the virus's spread. Yet, the industry hasn't been able to get back on its feet.
    Despite these challenges, AMC has said it will remain open. However, after Tuesday's filing, we now know that it can likely only do so for a few more months.

  • #2
    I wish I had a nickel for every person who told me they’d come to more movies if only we’d show some old classics, but now still aren’t coming even though we’ve shown classics since March.


    • #3
      There is a market for old classics, but probably not while we're deep into this pandemic.

      One of the problems is that despite the pandemic, it's still hard to get the license to some of the movies that people actually want to see. The other is that it probably takes some time to build something like a loyal following, because you don't have the marketing power of a new release behind you.


      • #4
        "Classic" means "Old movie that I want to see when I want to see it."
        "Old" means "Movie that came out when I was a teenager."


        • #5
          "Old" for me means a movie that came out when my grandparents were teenagers!

          But yes, the market for classics exists; but it's not big enough to keep the theater business afloat. That is why there are about 30 multiplexes for every arthouse.


          • #6
            The simple fact is most "average" members of the general public are never going to show up at a commercial theater to pay good movie to watch a movie they can already watch on the home TV set. Classic movies on the big screen are only going to draw customers who are either big movie fans (or big fans of the movie being shown) or are big fans of the movie going experience. The vast majority of movie-goers are in the "casual" movie-going camp. If the movie is available to watch on their home TV screen or even on a tablet or phone they're going to choose that cheaper option.

            Personally I'm pretty worried about movie-going in my town. AMC runs the one decent first run theater we have (the Patriot 13, which includes one of the biggest Lie-MAX 2K houses in our region). It wouldn't be good if that new-ish theater closed permanently. The company that ran the dinky 12-plex in Central Mall liquidated. The DOJ won't block AMC from re-acquiring the theater it was forced to divest went AMC bought Carmike Cinemas. But the mall where that 12-plex is located is practically on its own death bed of sorts. Earlier today the Lawton City Council voted in favor of having the city buy the Central Mall property for $14.6 million. The city is already converting the old Sears space into a business incubator, mainly to attract defense technology start-ups. They're probably going to expand the incubator into the anchor space recently vacated by Dillard's. I don't know what the hell they're going to do if JCPenney closes its location in Central Mall. The old mall has a bunch of other smaller tenant spaces that are vacant as well. The whole effort seems like a lost cause to me. The tech industry, even the part that deals with defense technology is a very hotly competitive industry. Some locales do all they can to give new tech companies very nice, swanky surroundings. And that makes me wonder how they're going to fill the vacant retail space in a 1970's era indoor shopping mall. Even if AMC was in good financial shape, I just can't picture them wanting to take over that mall theater again.


            • #7
              it's still hard to get the license to some of the movies that people actually want to see.
              Yes, and the #1 problem company for that is: (I probably don't even have to type it)........ Disney. One of the most requested movies this past summer was The Sound of Music, and of course Disney won't let it out of their "vault." One of the all-time favorite big-screen experiences for many people, and the only way they can see it is on their shitty TV set or their phone. (Yes, most TV sets today are STILL shitty compared to a good theater setup, and even a good home setup can't compare with the grandeur of that movie on a huge screen.)

              About the classics in general... one night I had a bit of an "epiphany" about why people don't go to them very much, even hugely popular ones like Jurassic Park or Indiana Jones. We did OK with those, but nothing approaching blockbuster status.

              Then I got to thinking about a time years ago when a couple of friends, my wife, and myself decided to rent a movie from the local video store. We wandered around the place for an hour and couldn't settle on one movie to watch. Nothing turned us ALL on. I would suggest one, the friends would say "I saw that last week," or "I hate that movie," or "I've seen that a hundred times." My wife would pick one and I would have a similar reaction. The reason we couldn't find anything to watch was, NONE OF THOSE MOVIES WAS SPECIAL. They were all just humdrum, stuff that was a relic of the past, not something new and exciting.

              That's when I realized that no amount of hype will ever bring the kinds of crowds to oldies that exciting new movies will bring out. It's the specialness of it. The excitement. THAT is what we're missing right now. Only new movies can bring it back. (Have you all written to Andrew Cuomo yet?)


              • #8
                That said, I've worked venues where we could put over a 1000 people at a time into a classic title like Sound of Music or Lawrence of Arabia. Of course, not everyone else was playing those titles too and the venue was anything but one's "home theatre." It isn't that the classic titles can bring people in, but you can't just throw a classic into release and expect it to perform. It has to be promoted properly and presented in a venue that isn't the "typical" multiplex. You have to create some excitement about it too.


                • #9
                  The League of Historic American Theatres (LHAT) is a good source for venues that might fit Steve's description of not a typical multiplex. Many vintage picture palaces are still operating and have meticulously maintained equipment for screening real film. Usually these theatres offer more than 1,000 seats in front of a screen that fills the proscenium. The surroundings are a large part of the experience.


                  • #10
                    The trick with "classics" is you have to know your audience, and you have to work it. And that's what local independent theatres are for, it's what AMC or Regal or any of the others can't do. What may do well in Montgomery may bomb in Forsyth. And the only real way to find out is to give it a shot and possibly fall on your face. But we learn something, for the big chains its just another widget.
                    Judging from the grosses I see on Fathom classics around here, even before COVID, people are not scouring the listings looking for "classics," like tomorrow's screening of the 35th Anniversary of The Big Chill. At 4:30 in the afternoon here. I doubt they'll gross $50. Just because it is old, doesn't mean anyone wants to leave their house to see it. But as Kenneth says, the surroundings are part of the experience, which gives us as better shot of doing something with targeted older films. Generally speaking, if we show a oldie for one show, we do much better than the usual four shows of the same film when AMC shows it as a Fathom Event.


                    • #11
                      And this just in:
                      You can now rent a private AMC theater for just $99
                      Giulia Heyward and Renee Valdes, CNN
                      Updated 4:18 PM ET, Sat October 17, 2020

                      (CNN)A crisp Benjamin Franklin can get you your own private AMC movie theater.

                      AMC Theatres joins a handful of cinemas letting customers rent out auditoriums for private screenings -- a growing trend due to the Covid-19 pandemic.
                      AMC allows rentals of up to 20 people. According to its website, rates start at $99, excluding tax, and increase to $349 depending on the movie, the theater's location and any other add-ons like food and drink. AMC's FAQ page lists renting a microphone to greet guests as an extra $100 charge, while more time to enter an auditorium, beyond the standard 15 minutes, will cost another $250.
                      It's cheaper than ever to rent an entire movie theater
                      It's part of the theater chain's effort to remain afloat this year as the Covid-19 pandemic contributes to record industry losses.

                      AMC's revenues fell by $941.5 million, down roughly 22% compared with $1.2 billion in the same quarter last year, according to a Security and Exchange Commission filing in June. In another filing, the world's largest theater chain could run out of money by the end of the year.
                      The company blames these losses on having shut its theaters to mitigate the spread of the virus.
                      "In compliance with these restrictions, all of our theatres worldwide have temporarily suspended operations through June," the company said in the filing. "During this period, we are generating effectively no revenue."
                      The biggest movies that have been delayed, and when you can expect to see them
                      Hollywood studios are also delaying the release of films, like Wonder Woman 1984, a Warner Bros. film. And the number of viewers using streaming services has increased significantly since stay-at-home orders began last spring. According to a Nielsen report, staying at home can lead to a 60% increase in streaming activity.
                      Jeff Bock, a senior analyst at entertainment research firm Exhibitor Relations, told CNN earlier this month that theaters will continue to be hit hard if these trends continue.
                      "We have to prepare for the inevitability that one, or more, of the major chains may not survive if this situation continues to lurch into next summer," Bock told CNN. "The number of movie theaters that will close on a permanent basis will be directly proportional to how long it takes the US to stomp out the virus."
                      It's clear that AMC is finding creative solutions to its financial problems.
                      The promotion is available in most states, excluding New York, Alaska and Hawaii.
                      Frank Pallotta contributed to this report.
                      At least here in Montgomery, if someone rented a show for $99 it would make that movie the second highest grossing movie of the day at AMC. Not sure this is going to keep a movie chain afloat. Especially if they are turning over 35% or more to the distributor.