February 23, 2021
AMC Entertainment, corporate parent to the world’s largest movie exhibitor AMC Theatres, saw its stock value rise in early Feb. 23 trading following news from New York Gov. Andrew Cuomo that theatres can reopen in New York City in the first week of March.
Hollywood studios, home entertainment and the domestic box office have been under prolonged economic siege since the pandemic started — the latter following the closure of screens in major markets California, New York and New Jersey in mid-March 2020.
AMC chief executive Adam Aron said the re-openings mark another “important” step towards restoring the health of the movie theatre industry and New York City’s largest movie exhibitor.
“We will reopen all 13 of our theatres in the city beginning March 5,” Aron said, adding that all theaters would be subjected to the company’s extensive health and safety protocols for moviegoers and employees developed in consultation with Clorox and current and former faculty at the Harvard University School of Public Health.
AMC Safe & Clean includes social distancing & automatic seat blocking in each auditorium, mandatory mask wearing, and upgraded air filtration with MERV-13 air filters, as well as many other important health, sanitization and cleanliness efforts.
“Since reopening our first theatres in August, AMC has welcomed back nearly 10 million moviegoers nationwide without a single reported case of COVID-19 transmission among moviegoers at our theatres,” Aron said. “We look forward to welcoming back our New York City guests to the big seats, big sounds and big screens that are only possible at a movie theatre.”
Wedbush Securities media analyst Michael Pachter lauded AMC and Cinemark’s safety measures, but contends most moviegoers won’t return until vaccinated and virus deaths decrease. The country just passed 500,000 COVID-related deaths on Feb. 22 — the most in any country since the pandemic began.
“We think that AMC and Cinemark have taken all the right in-theatre precautions, allowing some attendance over the last several months,” Pachter wrote in a note before the re-opening news. “However, major markets have remained closed and we do not expect attendance levels to begin to normalize until July at the earliest.”
The next day, Pachter contends pent-up demand by moviegoers could potentially add meaningfully to AMC’s Q1 and Q2 results given that AMC’s NYC theatres are some of its highest performing screens in its domestic circuit.
“Should this entice other densely populated areas to re-open, this could in turn entice studios to maintain Q2 – Q3 release slate plans,” Pachter wrote Feb. 23.
The 2020 North American box office ended down 81.6% compared to 2019 at $2.09 billion, while 2021 is trending down 93.6% year-to-date, according to Pachter.
AMC has not yet announced its Q4 2020 results or the timing of its release, but Pachter expects the company to report fiscal results in the first week of March.