AMC Entertainment Selling Baltic Theaters

Cash-strapped AMC Entertainment Aug. 31 announced that it has signed a definitive agreement to sell nine theatre locations (67 screens) in the Baltic region (Latvia, Lithuania, and Estonia) for €65 million ($77 million).

The agreement calls for AMC to receive approximately half of the sale proceeds on signing and the balance upon closing in each country after antitrust resolution in the coming months.

The world’s largest exhibitor with about 1,000 screens is slowly trying to return to normal operations after shuttering all theaters in mid-March due to the coronavirus pandemic.

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“This transaction marks yet [more] decisive action taken, on the heels of our capital raising in April and debt restructuring and capital raising in July, to bolster our liquidity and strengthen our balance sheet…that underscores the inherent value of our theatre portfolio and resilience of our business,” CEO Adam Aron said in a statement.

Aron said he remains “encouraged” by attendance levels at re-opened screens in Europe and in the U.S., where almost 300 theaters are currently open for business.

Indeed, Warner Bros.’ much-hyped Christopher Nolan movie Tenet generated $53 million in ticket sales Aug. 26-30 across 41 theatrical markets outside the U.S. and China. The film opens in the world’s largest two markets next weekend.

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“Growing consumer confidence in our cleaning and safety protocols continues to generate increased attendance and food and beverage spend, and we look forward to offering a full slate of new and entertaining film product to further drive attendance over the remainder of 2020,” Aron said.

Media analyst Michael Pachter with Wedbush Securities in Los Angeles, said the sale could help AMC reduce its long-term debt load to $4.8 billion, compared with $5.1 billion in the most-recent fiscal quarter.

With its recent debt restructuring, AMC has significantly improved its debt position, while also reducing its cash outlay by [upwards of] $180 million in the next six to eight quarters,” Pachter wrote in a note. “Collectively, these moves have effectively positioned the company to survive through extended closures in its domestic markets.”

AMC Reopening Additional 170 Screens on Aug. 27

After reopening more than 100 locations nationwide, AMC Theatres is preparing to reopen its second wave of theaters, with 170 additional locations set to open Aug. 27, ahead of the release of 20th Century’s The New Mutants. After the second wave of theaters re-openings, AMC will have nearly 300 locations operational nationwide. Kansas-based AMC is the world’s largest exhibitor, with about 1,000 screens, which have been effectively shuttered since mid-March due to the coronavirus pandemic.

This second wave of reopenings is part of a phased plan to reopen AMC in the United States. AMC currently expects to open approximately two-thirds of its more than 600 U.S. theaters in time for the Sept. 3 release of Warner Brothers’ Tenet. The remainder of AMC’s U.S. theaters will open only after authorized to do so by state and local officials.

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In addition to New Mutants, moviegoers can screen Unhinged (Solstice Studios), Words on Bathroom Walls (Lionsgate/Roadside Attractions), and The Personal History of David Copperfield (Disney). Pending new releases include The Broken Hearts Gallery (Sony Pictures/TriStar) and Infidel (American Cinema International) on Sept. 11, and The War with Grandpa (101 Studios) on Sept. 18.

AMC CEO Adam Aron said consumer feedback to theater reopenings has been positive, with the theater imposing seating restrictions and mandating moviegoers wear masks while inside.

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“Our comprehensive commitment to operating our theaters safely now includes social distancing through limiting ticket sales and automatic seat blocking, seamless contactless ticketing, greatly enhanced cleaning procedures, the availability of hand sanitizer and disinfecting wipes throughout our theaters,” Aron said in a statement.

Whether that will be enough to lure consumers remains to be seen. Wedbush Securities media analyst Michael Pachter contends consumers won’t feel safe returning to the cinema until there is a coronavirus vaccine — a requirement that likely won’t materialize until 2021.

AMC Theatres locations are also screening catalog titles such as Warner Bros.’ Inception; Universal Pictures’ Jurassic Park; Raiders of the Lost Ark; The “Rocky” franchise; Spider-Man: Homecoming; Spider-Man: Far From Home; Shrek; and Sonic: The Hedgehog. Tickets are just $5 each.

AMC is also offering an array of $5 food and beverage treats, including regular popcorn, regular Coca-Cola Freestyle drinks and KidsPacks, through the end of October. All AMC Stubs members will earn double points on all ticket and food and drink purchases through the end of October.

“We have invested millions for high tech solutions to sanitization and disinfection, including electrostatic sprayers, HEPA vacuums and MERV 13 air filters,” Aron said. “Guests returning to AMC can do so knowing that we’ve been in constant dialog with top scientists and experts in public health and cleaning about how best to reopen our theaters in ways that will be responsible and welcoming.”

CEO: AMC Theatres in PVOD Discussions With Other Studios; Q2 Revenue Plummets 98.8%, Net Loss Skyrockets to $561 Million

On the heels of its landmark premium VOD agreement with Universal Pictures, AMC Theatres is reaching out to other studios in hopes of securing similar revenue-sharing deals, CEO Adam Aron disclosed Aug. 6 on the second-quarter (ended June 30) financial disclosure. AMC will share with Universal in all PVOD movie rental revenue 17 days after a title’s theatrical debut.

“AMC is an innovator and we are embracing change that we are confident will be financially beneficial for AMC shareholders,” Aron said in a statement. The CEO did not disclose the names of other studios AMC is in discussions with.

On the fiscal call, Aron said he had no issues with Disney removing Mulan from theatrical distribution to PVOD on Disney+. Calling Disney “no bigger friend” to AMC, Aron said the exhibitor and media giant had to do what’s in the best interest of their fiscal position during the pandemic.

“[Disney] provided us with more content last year than any other studio in the world.” Aron said. “As both companies do businesses, we will thrive.”

As expected, the world’s largest movie exhibitor saw its financial quarter decimated by the ongoing coronavirus pandemic that has seen the majority of its 11,000 screen shuttered since mid-March.

With the chain generating just $18.9 million in revenue, which was down 98.8% from revenue of more than $1.5 billion in the previous-year period, AMC reported a net loss of $561.2 million — the worst in the company’s 100-year history.

“A once in a century event has transformed 2020 into a brutal year,” Aron said in a statement.

Indeed, the company spent the bulk of the quarter restructuring more than $2.6 billion in long-term debt. Aron said more than 130 theaters are operating in Europe and the Middle East — more than one-third AMC’s international theaters. Aron expects all screens to resume operations in the next two to three weeks.

“Theatrical exhibition has always been resilient, and we are confident that at AMC we are taking the right steps to emerge from this crisis and to thrive once again as the leader in our industry,” he said.

AMC Theatres Reduces Debt Load by $553 Million

With $2.6 billion in long-term debt and enduring a shuttered business during the coronavirus pandemic, AMC Theatres has been a sitting duck in bankruptcy crosshairs.

The nation’s largest exhibitor Aug. 3 announced it has successfully restructured its debt load with 87% of its senior subordinated note holders — in a deal that gives the exhibitor upwards of $415 million in cash and “liquidity improvements” in the next 18 months.

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“Now we can focus solely on the all-important task of opening our theaters in the U.S., Europe and Middle East safely and responsibly,” CEO Adam Aron said in a statement.

AMC repeatedly delayed re-opening screens in the U.S. due to spikes in COVID-19 infections. The latest restart is slated for sometime this month.

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AMC Theatres Delays Re-Opening to July 30

AMC Theatres has pushed back re-opening 450 theaters in the United States from July 15 to July 30. The nation’s largest exhibitor had planned to jumpstart operations in about two weeks following a government-mandated shutdown in March due to the coronavirus pandemic.

But with Disney and Warner Bros. pushing back releases Mulan and Tenet, respectively, due to upticks in COVID-19 infections in California, Florida, Texas and Arizona, AMC decided to hold off.

CEO Adam Aron says the chain has invested tens of millions of dollars in sanitization protocols, including acquiring high-tech air purification systems for theaters.

“We continue to devote extraordinary resources into our plan to operate our theatres with a hyper commitment to the safety and health of our guests and associates,” Aron said in a previous statement.

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Wedbush Securities media analyst Michael Pachter doubts moviegoers are in a rush to go the cineplex without a vaccine.

“As we face a potential spike in cases nationwide after some seemingly premature re-opening schedules in addition to nationwide protests, we are less sanguine … that enough of the population will risk their health to support the current release slate schedule starting in July,” Pachter wrote.

AMC Theatres Reverses Stance, Says Moviegoers Must Wear Masks

AMC Theatres CEO Adam Aron said he didn’t want to get pulled into the politics of mandating masks in regards to the coronavirus pandemic. But apparently that’s exactly what happened as the nation’s largest exhibitor abruptly reversed policy allowing patrons not to wear masks in theaters when the chain re-opens 450 locations on July 15.

With box office revenue down 65%  year-to-date due to COVID-19 shuttering all movie screens, AMC, like other exhibitors, finds itself attempting cover both sides of the political fence when it comes consumer health, safety and personal freedom.

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Aron, in an interview with Fox Business, said that within minutes of AMC announcing masks would be optional in select locations, it received pushback from consumers.

“We began to get an immediate outcry from our loyal customer base,” Aron said. “It became clear to us very quickly that they wanted masks to be worn by all of our guests all across the country. And so that’s what we announced today.”

Aron said the reversal underscores the importance of companies listening to their customers.

“If our guests are happier, then we’re happier too,” he said.

Competitor Regal Cinemas quickly followed AMC’s lead reversing a mask-optional policy for patrons.

“As related to our employees, guests will also be required to wear masks. Disposable masks will be made available as needed,” Regal said in a statement.

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At the same time, Aron acknowledged that with parts of the country operating as if no pandemic exists, AMC didn’t want to take sides. But following consumer input, as well public health experts, the chain is now taking a stand.

“We’re going to live with it,” Aron said. “And we’re going to try to educate people in those parts of the nation who aren’t thrilled with [wearing masks], that they’ve got to do this because they’re protecting their own health and protecting the health of their fellow moviegoers.”

He reiterated that AMC’s updated “safe & clean” sanitation policies company-wide include social distancing, constant cleaning protocols, limiting the number of patrons in screenings, contactless ticketing, and mobile phone concession orders.

“We’ve gone real high tech route, we’ve invested millions of dolars to order electrostatic sprayers, heavy vacuums and air ventilation filters,” Aron said. “We really are committed to operating our theaters safely and cleanly for our guests. Convincing our guests that our theaters are safe is the only we are going to them back into our theaters.”

The executive said media speculation about AMC’s financial situation, including bankruptcy concerns, was legitimate as the chain’s revenue stream literally stopped overnight in mind-March. But raising funds ($500 million) via the markets, Aron said the chain has enough cash to fund the company through November — without selling a single ticket.

Indeed, Aron said that in 2019 AMC sold just 17% of its available seating all year long, suggesting the chain would be fine even with reduced seating capacity due to social distancing.

“We’re very confident about our ability to make it through this,” he said.

AMC Theatres Has No Universal Movies Slated for Release

AMC Theatres is sticking to its guns, boycotting all new-release feature films from Universal Pictures. The world’s largest exhibitor June 9 revealed it remains in discussions with the studio regarding the latter’s plan to launch movies in theaters concurrent with premium VOD in the home.

“While we are in active dialogue with Universal, no movies made by Universal Studios are currently on our docket,” AMC CEO Adam Aron said in a statement.

AMC and Universal had a falling out after the studio’s PVOD release of Trolls World Tour generated an impressive $100 million in PVOD revenue in three weeks, resulting in studio boss Jeff Shell announcing all future theatrical titles would include concurrent digital retail distribution if possible.

Aron responded that AMC would boycott all future Universal and other studio titles earmarked for digital/theatrical distribution.

As previously disclosed, AMC formally revealed it lost $2.17 billion for the fiscal first quarter ended March 31. The exhibitor lost $130 million during the previous-year period. Revenue was $941.5 million, down 21.6% from revenue of $1.2 billion in the year-ago period.

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Leawood, Kansas-based AMC saw the wheels come off its business in mid-March when the movie theater industry worldwide essentially shut down due to the spread of the coronavirus. Indeed, Q1 revenue was up 10% through February compared with a year ago.

“In mid-March we were forced to pivot the entire company to respond to the effects of the pandemic,” CEO Adam Aron said in a statement.

Indeed, attendance in the quarter plummeted 24.2% to 60.4 million from 79.8 million in the previous-year period.

The CEO, who along with 600 other executives, was furloughed to cut costs, said the exhibitor strengthened its liquidity by working with landlords and studio partners to defer or abate theatre and film rents, respectively, as well as raising an additional $500 million of public market debt.

AMC’s Odeon Cinema unit in Europe just re-opened select screens in Oslo, Norway. In the U.S., the states of Georgia, Texas and California have greenlighted phased re-opening of select businesses, including movie theaters.

To that end, AMC has reopened 10 theaters in Norway, Germany, Spain and Portugal, and currently expects to be fully open globally in July. The company is planning to reopen almost all U.S. and U.K. theaters in July, to be positioned to showcase Warner Bros’ release of Christopher Nolan’s Tenet now slated for release July 17, followed by Disney’s Mulan now slated for release July 24.

Other pending titles include Unhinged, Saint Maud, Antebellum, The SpongeBob Movie: Sponge on the Run, Wonder Woman 1984, A Quiet Place Part II, The King’s Man, Black Widow, Soul, Dune, West Side Story and Top Gun: Maverick, among others.

“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,” Aron said.

Regardless, AMC also disclosed that without a return to box office normality in the near future, it could face bankruptcy.

AMC Theatres Threatens to Drop Distribution of Universal Pictures Movies; Studio Responds

The world’s largest movie theater chain is fighting back against NBCUniversal’s plans to release at least some movies simultaneously to theaters and to homes.

On the heels of Universal Pictures’ animated feature film Trolls World Tour generating upwards of $100 million from premium video-on-demand and other digital channels in less than three weeks of release, NBCUniversal CEO Jeff Shell April 28 told The Wall Street Journal the studio would pursue a simultaneous theatrical/home entertainment release strategy going forward.

“The results for Trolls World Tour exceeded our expectations and demonstrated the viability of PVOD,” Shell said. “As soon as theaters reopen, we expect to release movies on both formats.”

AMC Theatres CEO Adam Aron promptly fired off a letter to the studio’s chairwoman, Donna Langley, saying it would no longer screen Universal movies if it turns a cold shoulder to the traditional 90-day theatrical window.

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“This radical change by Universal to the business model that currently exists between our two companies represents nothing but downside for us and is categorically unacceptable to AMC Entertainment,” Aron wrote in the letter. “Going forward, AMC will not license any Universal movies in any of our 1,000 theaters globally on these terms.”

AMC’s strategy mirrors exhibitor sentiment that has shunned Netflix original movies since the subscription streaming video behemoth releases its movies concurrently with any theatrical distribution.

Aron, along with 600 AMC executives, has been furloughed as the chain saw its business literally shuttered over night to help curb spread of the coronavirus. He said Shell’s comments suggest Universal is moving away from a long-term business model between AMC and Universal.

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Aron said the chain, which remains largely closed despite governors in select states authorizing the re-opening of theaters, would not distribute Universal — or any other studio’s content — globally if they stray away from the “theaters first” doctrine.

The executive said theatrical releases is a segue for future retail distribution, including boosting publicity, positive word-of-mouth, critical acclaim and downstream revenue. Aron said Universal wants to have its cake and eat it too by combining distribution channels.

“[Universal] assumes that we will meekly accept a reshaped view of how studios and exhibitors should interact, with zero concern on how its actions affect us,” Aron said.

He said AMC has invested significant time and energy with Universal executives over the past few years trying to figure out a new distribution models that would be beneficial both parties. Aron has previously mentioned helping studios distribute movies on its website and in theaters — the latter through packaged media.

“AMC is willing to sit down with Universal to discuss different windows strategies and different economic models between your company and ours,” Aron wrote. “However, in the absence of such discussions, and an acceptable conclusion thereto, our decades of incredibly successful business activity together has sadly come to an end.”

Universal Pictures, in a statement, called Aron’s letter disappointing. It said the decision to release Trolls World Tour on PVOD was done to offer consumers sheltering in home an alternative entertainment option.

“Based on the enthusiastic response to the film, we believe we made the right move,” Universal said. “In fact, given the choice of not releasing Trolls World Tour, which would not only have prevented consumers from experiencing the movie but also negatively impacted our partners and employees, the decision was clear.”

The studio said it still believes in the theatrical business model and said it has made no comment to contrary. It said it always seeks to make its movies available to as wide an audience as possible.

“We look forward to having additional private conversations with our exhibition partners, but are disappointed by this seemingly coordinated attempt from AMC and [trade group National Association of Theatre Owners] to confuse our position and our actions,” Universal said.

AMC Theatres Seeks $500 Million Lifeline

Coronavirus-challenged AMC Theatres April 16 said it plans to raise $500 million in private equity funds. The world’s largest theatrical chain has seen its 11,000 screens worldwide go dark since the pandemic forced businesses catering to large group gatherings to shutter.

With zero revenue coming in and weekly expenses topping $30 million, AMC furloughed 600 corporate jobs, including CEO Adam Aron. With its stock cratering and management telling landlords it wouldn’t rent, Wall Street began circling the wagons in anticipation of a Chapter 11 bankruptcy filing.

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With about $300 million in cash reserves at the end of March, and exhibitors not high on anyone’s essential business list (except their own), the proposed funding should keep the wolves at bay for awhile.

“Due to significant actions taken by the company, we believe our current cash balance is sufficient to withstand a global suspension of operations until a partial reopening in July,” AMC said in a regulatory filing. “After giving effect to the proposed notes offering, we believe the company will have sufficient liquidity to withstand a global suspension of operations until a partial reopening ahead of Thanksgiving.”

The news sent AMC shares up 37% in after-hours trading.

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CEO: AMC Theatres Hoping for Mid-June Re-Opening

AMC Theatres, the world’s largest exhibitor with 1,000 theaters and 11,000 screens, hopes to re-open domestic screens by mid-June, CEO Adam Aron told CNBC.

Speaking March 31, Aron said the industry remained on “uncharted times in our lifetimes,” while admitting to wishful thinking as the chain has seen revenue plummet to zero as local and state governments banned group gatherings of 10 or more people.

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“The summer has always been one of the biggest movie seasons of the year … and Christmas,” Aron said. “I would love to think that America will be enjoying summer movie season again. But nobody knows.”

Aron said America needs to get on the “other side of this virus” as a country. “So many businesses have been temporarily shuttered. People want to get out of the house and get back to normal. But that’s not going to happen in the next few days or the next few weeks.”

China had initiated limited theatrical openings only to reverse the decision the next day when new cases of coronavirus popped up. Beijing’s Film Bureau ordered the 600 re-opened Shanghai theaters shuttered on March 27.

Aron said China’s reopening just 60 days after the virus broke out seemed “a little too tight,” when compared with AMC’s decision to shutter all screens on March 17 for six to 12 weeks.

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The CEO said he saluted Congress for passing the $2.2 trillion relief bill, which he said would provide relief for AMC employees and “our communities.”

Aron believes the entertainment industry will bounce back quickly because “people want to be entertained.”

“The country is going to come back,” he said. “America will be normal again. We’re just going through an interruption. How quickly nobody knows. We’re all going to learn together.”