Corona Virus Effect On Theatres In The USA

[Frank Cox]

I wonder how many of the big chains will be willing to pay the costs to keep their premises and equipment in place and in working order for over a year with no revenue at all. I think most of their locations are on rented property (malls, etc.) so there will be some high fixed costs for rent and property taxes.

[David Buckley]

This is from the concert and touring space, but is also related to restaurants, and thus could be extrapolated to theatre and cinema, and public gatherings in general.


https://www.metalsucks.net/2020/04/1...-the-earliest/
Healthcare Expert Says Concerts Won’t Return Until “Fall 2021 at the Earliest”

This much most people agree upon: reopening our economy in the short-term would have disastrous consequences. It is imperative we keep our businesses shuttered as the worst effects of the coronavirus take their toll on human lives across the globe.
But in a recent feature in The New York Times, a panel of experts discussed when and how we should start thinking about ramping up the economy, and the trade-offs that will emerge as that happens: how can we continue to do everything we can to save lives while also making sure people can get back to work to provide for themselves and their families? When will schools reopen? When will mass public gatherings like sporting events and, to our point, concerts, become a part of life again?
One of the panelists, the bioethicist Zeke Emanuel, is vice provost for global initiatives and director of the Healthcare Transformation Institute at the University of Pennsylvania, host of a new podcast about coronavirus, “Making the Call,” and author of the forthcoming book Which Country Has the World’s Best Health Care? Emanuel has a plan for how to gradually reopen the economy that keeps public health at the forefront, and believes that if certain protocols are followed and testing can be rapidly expanded, the current restrictions can begin to be eased in June. The panel discussed what would happen after that.

Here is what Emanuel had to say about when he thinks people will be allowed to attend concerts and sporting events, as well as gathering in lower density places like restaurants (emphasis added by MetalSucks):

“Restarting the economy has to be done in stages, and it does have to start with more physical distancing at a work site that allows people who are at lower risk to come back. Certain kinds of construction, or manufacturing or offices, in which you can maintain six-foot distances are more reasonable to start sooner. Larger gatherings — conferences, concerts, sporting events — when people say they’re going to reschedule this conference or graduation event for October 2020, I have no idea how they think that’s a plausible possibility. I think those things will be the last to return. Realistically we’re talking fall 2021 at the earliest.
“Restaurants where you can space tables out, maybe sooner. In Hong Kong, Singapore and other places, we’re seeing resurgences when they open up and allow more activity. It’s going to be this roller coaster, up and down. The question is: When it goes up, can we do better testing and contact tracing so that we can focus on particular people and isolate them and not have to reimpose shelter-in-place for everyone as we did before?”

Emanuel’s opinion echoes that of metal booking agent Daniel DeFonce, who expressed this week that he doesn’t see touring full-scale returning before 2021.
As sad as it is to consider, unfortunately we have to consider the possibility that Emanuel is correct, which would mean many of the tours we’ve seen being rescheduled for the coming fall will not happen. We would very much like it if Emanuel were wrong, but we’re just going to have to wait and see what happens.

[Lyle Romer]

since it's a waiting game to see what happens next with AMC, would a bankruptcy claim, put into doubt if Dolby would continue it's exclusivity with AMC, and maybe dissolve such deal?

Does Dolby have an exclusive deal with AMC? I would think that if they did, it would have been both ways, i.e. AMC wouldn't have any new IMAX auditoriums but they seem to have both at newer locations.

[Marcel Birgelen]

since it's a waiting game to see what happens next with AMC, would a bankruptcy claim, put into doubt if Dolby would continue it's exclusivity with AMC, and maybe dissolve such deal?

A "Chapter 7" bankruptcy would immediately cancel all deals, but most companies will enter into a "Chapter 11" bankruptcy first in a bid to restructure themselves and get rid of a lot of debt. In such a bankruptcy, all existing deals are still subject for cancellation, but they're not cancelled by default. What you probably will see is that all locations that were unprofitable in the past will be sold or closed for good. If those locations that will be sold include Dolby Cinema locations, that would probably end the exclusivity by default.

[Mitchell Dvoskin]

Referring To Cinemark at the Willowbrook Mall
I actually have, and I have to say honestly that I was underwhelmed. I saw a few pictures in the premium BFD auditorium, and the red aisle lights reflecting on the lower corners of the screen was dreadful, the worst I have seen, even worse than on the notorious AMC Dolby Vision screens.

Actually, what bothers me more is the lack of screen masking there and at recent competitor's locations.

As to AMC, the best I can say about them is the worst AMC location is better than Bow Tie Cinemas. I went to see A Hidden Life at the Bow Tie Clairidge Cinemas in Montclair NJ. The left side of the screen was significantly further away from the seats than the right side of the screen, the sound was terrible, and the screen was too small even for the tiny auditorium. This was my first trip to a Bow Tie Cinema, and it will also be my last trip to a Bow Tie Cinema. I can't speak to their other locations (and don't really care), but I actually feel that I was cheated and will never set foot in one again.

[Jon Goeldner]

since it's a waiting game to see what happens next with AMC, would a bankruptcy claim, put into doubt if Dolby would continue it's exclusivity with AMC, and maybe dissolve such deal?

[Bobby Henderson]

The newest "Dolby Cinema @ AMC" location I visited, a former Carmike Big-D house at Chapel Hills Mall in Colorado Springs, ditched the usual AMC Prime themed red lights. All the decor was still black. But the only accent lighting in the room was a couple lines of blue LED border lighting on the side walls. Thankfully it was turned off during the show.

I'm not the biggest fan of AMC, but I am kind of worried over what bankruptcy would mean for movie-going in my town. The one decent theater we have in Lawton is the Patriot Cinemas theater, originally built by Carmike. By "decent," I mean the theater and the equipment inside is only a few years old. The IMAX-branded house is one of the biggest in this region (over 550 seats). In the past year or so, as AMC's debt has piled up, they've been doing less and less at keeping up with the basics at this location. Staffing was at a bare minimum prior to the SARS-CoV-2 pandemic shutting down everything.

My fear is the Patriot Cinemas theater closing and never re-opening. If AMC goes under some other company would have to step in and buy that location, clean it up and get it running again. There's no guarantee of that happening. The place may end up boarded up for good, just like the Carmike 8 building a few blocks away.

The only other first run theater we have here in Lawton is the old 12-plex in Central Mall, originally built by Dickinson Theaters in 2001. Ownership of that theater has changed hands several times. The 12-plex was poorly designed when it opened. Walking into this place is like walking into a bad throw-back of a 1980's mall multiplex. The rooms are too tiny and ceilings are too low for it to be turned into anything better. Even if this theater could be improved, it was built within the confines of a very outdated, 1970's era, single story, indoor shopping mall. Central Mall in downtown Lawton is facing its own existential crisis. Ownership of that mall has changed multiple times, including a recent turn-over. One of the key anchor tenants, Sears, has been closed for years. That big space is still empty. The City of Lawton is brain storming ideas to convert the space into some kind of community center or something. The other two anchor tenants are Dillard's and JCPenney. Word is JCPenney is in a hell of a lot of financial trouble. I kind of feel bad for JCPenney because at least it looked like they were trying to maintain something. The last few years Sears was in Central Mall it looked very run down. During its last days several areas of the store were bare. Most Goodwill stores have more pizzazz. Anyway, getting to the point, odds are good the JCPenney location here in Central Mall will never re-open. And that could doom Central Mall. I don't think Dillard's alone is enough to keep an outdated 70's era mall in Lawton afloat. So we could be losing both of our first run theaters in one fell swoop. Our old Vaska theater was still running, but only operated occasionally, showing second run content. Its business model is about shot too.

Once this pandemic is all done I might have to drive clear to Oklahoma City or Dallas to see a movie in an actual commercial movie theater.

[Mark Ogden]

try the new Cinemark Theatres on the other side of the Willowbrook Mall

I actually have, and I have to say honestly that I was underwhelmed. I saw a few pictures in the premium BFD auditorium, and the red aisle lights reflecting on the lower corners of the screen was dreadful, the worst I have seen, even worse than on the notorious AMC Dolby Vision screens. I haven't been in one of the smaller auditoriums here yet, but I have been into the small ones down in Watchung, the screens where they gave up on stadium seating in favor of a flat floor of recliners, and I didn't care for them. I think I posted a picture of one here somewhere. It's a shame, I had high hopes for the place. I mean, how freaking stoopid and/or uncaring do you have to be to sign off on such poor design. Next time I go I have half a mind to sneak in a roll of black gaffer tape and cover the aisle lights closest to the screen.

I wish that Arclight would build here somewhere. Their new site in Boston is very nice, really a good place to see a movie.

[Jim Cassedy]

Don't even get me started about the notoriously bedbug infested Empire 25 in Manhattan.

The AMC Van Ness 1000 in San Francisco also had a notorious bedbug problem. They had to close several auditoriums for de-infestation on more than one occasion. It too was a showplace when it first opened and for some time afterwards, but eventually starting going downhill as they seemed to either be cutting back, or perhaps not caring, about general maintenance and presentation standards.
It was shut down in Feb Y2k19. and I believe all the projection equipment was removed. (Not sure abt that, although a look though the ground floor windows confirms that all the concession equipment & everything in the main lobby has been completely gutted out).
Almost exactly 1 year ago this week, Korean cinema chain CJ-CDV cinemas announced they were going to be taking over the space and installing the latest razzle-dazzle "4D" laser projection and immersive sound technologies in the auditoriums, But last time I went by there in early January, aside from some posters in the windows announcing that a new multiplex would open "soon" (which have been there since last summer) I haven't seen any signs of work going on in the building. Nor do any of the people I know who would normally be involved with selling or installing equipment know anything about what's happening there. An e-mail inquiry about the status of the project I sent to CJ-CDV in December went unanswered, so who knows what's going on.
Maybe they still couldn't get rid of the bedbugs.

[Mitchell Dvoskin]

And the AMC at the Willowbrook Mall in Wayne smells dank, and their Stubs policy of allowing paid Stubs members cut to the front of the concession line, even when their is only one person working, has caused me to now sneak in my own concessions, something I had not done since I was a teenager many, many decades ago. I don't mind paying for my concessions, but I will be damned before I will be treated rudely for the privilege of spending money at their theatres.

Mark, after the zombie apocalypse is over, try the new Cinemark Theatres on the other side of the Willowbrook Mall (where the Sears Auto Store) used to be. That is now my go to theatre in Northern New Jersey. I suspect AMC will shed their Wayne location as part of their upcoming bankruptcy.

As I have previously said, AMC runs theatres like AMC used to build cars.

[Mark Ogden]

At the risk of offending any AMC employees that might be here: if God wanted to give the exhibition industry an enema, he'd stick the nozzle in AMC theaters. Between their filthy, vermin infested auditoriums, their interminable trailers, the horrible way they treat their (largely poor immigrant) cleaners, their indifferent technical presentation, and their infuriating, elitist "Stubbs" program, I personally will rejoice if they don't survive this thing.

One of the chain's top-5 highest grossing theaters is the Garden State 16 in Paramus, New Jersey, which was my former "go-to" theater for anything first-run. When in opened in 2007 it was truly a showplace, very carefully maintained with then state-of-the-art presentation. To give you an idea of how things have deteriorated, not long ago the TV show "Inside Edition" filmed a segment there where a reporter snuck in to use the place as an example of how revolting their theaters were: https://www.youtube.com/watch?v=9H0I49ISDGg (@2:18). Don't even get me started about the notoriously bedbug infested Empire 25 in Manhattan.

I haven't stepped inside an AMC in a long time. To hell with them.

[Martin McCaffery]

Keep an eye on AMC. Chapter 11 doesn't mean Going Out of Business, but it could mean shedding a lot of the theatres they've been buying up.

MKM Partners' Eric Handler downgrades the stock to a "sell," estimating its "cash burn rate in a no-revenue environment is running at $155 million per month, which likely keeps AMC liquid until June/July."

Wall Street analysts are seeing a Chapter 11 bankruptcy filing from cinema giant AMC Theatres as increasingly likely.

MKM Partners analyst Eric Handler on Thursday downgraded his rating on shares of the exhibitor from "neutral" to "sell," saying that "bankruptcy appears likely."

That followed Loop Capital analyst Alan Gould's Wednesday downgrade to a "sell" in a report that concluded: "We think bankruptcy is a distinct possibility, and at a minimum, the company will require a highly-dilutive financing."

Handler in his Thursday report explained: "Based on our view that theaters will be closed until at least August and our belief that AMC lacks the liquidity to stay afloat until that time, we expect the company will soon be faced with filing for bankruptcy. Further fueling our liquidity concerns is AMC's decision to stop paying rents to landlords effective April."

AMC, in which Chinese conglomerate Dalian Wanda Group owns a majority voting stake, has been looking for various ways to reduce costs, in late March furloughing all of its 600 corporate employees, including CEO Adam Aron, following the closure of all its cinemas. It had earlier already cut its dividend by 85 percent.




Handler said though that even if AMC is able to tap government bailout funds, as management has signaled it plans to do, "we believe the weight of its balance sheet will make for tough sledding given the company's high leverage, thus making a reorganization inevitable." That comment was a reference to a potential Chapter 11 bankruptcy filing, which leads companies, their lenders and a court to develop a restructuring plan.

Handler highlighted that AMC, which he called "the exhibition company we view with the least financial flexibility," at the end of 2019 had $265 million of cash on hand and $332 million available on its credit lines for a total of nearly $600 million. "We believe the company's monthly cash burn rate in a no-revenue environment is running at $155 million per month, which likely keeps AMC liquid until June/July," he concluded.

Handler cut his fair value estimate for AMC's stock from $7.50 to $1 and lowered his first-quarter financial estimates. He cut his adjusted earnings before interest, taxes, depreciation and amortization estimates to a loss of $13 million, compared with a year-ago profit of $108 million. His revenue estimate went down to $931 million, reflecting "a domestic box office decline of 26 percent as theaters have been shuttered since mid-March and a 20 percent decline internationally."

Handler also cut his 2020 outlook for AMC's adjusted EBITDA to a loss of $293 million, compared with a $771 million profit in 2019. Full-year revenue he expects to fall 44 percent to $3.05 billion. The revisions assume cinemas remain closed until August.

[Bobby Henderson]

The way some of the latest forecasts look I think it will be a miracle if commercial movie theaters are allowed to re-open by some time in June.

The SARS-CoV-2 outbreak is probably going to peak in most parts of the United States during April. The peak may be delayed until some time in May in some regions where people are still getting out of the house too much, thus allowing more spread. The downward slide past the peak is probably going to be very frustratingly slow. It may end up taking most of the summer for active SARS-CoV-2 infections and COVID-19 illness to disappear in the US.

Commercial movie theaters are already facing grim prospects at trying to stay afloat financially. One serious worry I have is the relationship so many theaters have with property owners. Prior to the outbreak of this pandemic, commercial movie theaters in various urban locations were closing. Property owners have refused to re-new leases and closed notable theater locations to convert the property into different kinds of venues or just demolish them to make way for luxury condos or whatever.

I can't help but wonder how many theaters are going to be forced to close in this situation. Landlords might use the crisis an excuse to convert the property into something else, even if the theater can manage to financially survive through this crisis. If a theater operator misses a rent payment the land owner might jump on the opportunity to break the lease.

[Mike Blakesley]

I think people will be skittish until a reliable vaccine for this virus is developed. So while I'm hoping we get opened by summer, I'm not exactly expecting sellout business for a while.

My biggest fear is that we stop the social distancing too soon, and the whole mess flares up again this fall just in time for "regular" flu season.

[Mitchell Dvoskin]

I suspect that it will be several months after theatres are allowed to reopen that people will feel comfortable being in crowds again.