AMC Theatres Says It Will Be Out of Cash After January

AMC Entertainment, parent to the world’s largest theatrical chain, AMC Theatres, said it has received $100 million in stopgap funding to remain afloat financially. The deal with Mudrick Capital Management, disclosed in a Dec. 11 regulatory filing, pays the investment firm 15% in annual interest in exchange for 13.7 million AMC shares.

With coronavirus infections and deaths spiking across the country, movie theaters remain either shuttered (Regal Cinemas) or operating under limited capacity such as AMC and Cinemark. AMC said theatrical attendance has declined 92% since the previous-year period.

The chain said that in the absence of additional liquidity, it anticipates that its cash resources will be depleted in January 2021. To remain viable through next year, AMC estimates its needs approximately $750 million of additional liquidity to fund cash requirements, which include $400 million in deferred rent obligations. The chain is burning through $125 million monthly to maintain operations.

In addition to the pandemic, AMC blamed its fiscal situation and future on delayed studio releases and Warner Bros.’ decision to release all movies concurrently in theaters and on the HBO Max streaming service.

“[The] delays of major movie releases, or the direct or simultaneous release of movie titles to the home video or streaming markets in lieu of theater exhibition, have led to theater closures, prevented the opening of theaters in major markets and have had, and are expected to continue to have in the future, a material adverse impact on theater attendance levels and our business,” AMC said in the filing. “These challenges have been exacerbated by the announcement by Warner Bros. that its entire studio film slate for 2021 will move to simultaneous release, which may result in other studios adopting a similar strategy.”

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As of Nov. 30, AMC was operating at 404 of its 594 U.S. theaters, with limited seating capacities and during limited opening hours. The company’s shuttered domestic screens include theaters in some of its major markets, such as New York City and in California. AMC is operating at 108 of its 359 leased and partnership international theaters, with limited seating capacities and during limited opening hours. Through Nov. 30, AMC said it has seen an 86% decline in international moviegoers compared to last year.

“Our current cash burn rates are not sustainable,” AMC said. We currently estimate that if our attendance levels do not significantly improve during … 2021, then we believe the liquidity shortfall would be greater than the estimated $750 million minimum shortfall, which if not addressed would prevent us from continuing as a going concern.”

Regal Cinemas Owner Eyes New Warner Release Window; AMC Entertainment CEO Livid

Reaction from Warner Bros.’ landmark decision to effectively scuttle the theatrical window on all new movie releases in 2021 has run the gamut of emotions among exhibitors.

Adam Aron, CEO of AMC Theatres parent AMC Entertainment, blasted the decision, contending WarnerMedia is sacrificing “a considerable portion of the profitability of its movie studio division” to help jumpstart SVOD platform HBO Max. Aron said the decision also negatively affects filmmakers and production partners.

AMC Entertainment CEO Adam Aron

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“We have already commenced an immediate and urgent dialog with the leadership of Warner on this subject,” Aron said in a statement.

The CEO over the summer hammered out a reduced theatrical window agreement with Universal Pictures, which affords the studio PVOD distribution into homes 17 days (at least three weekends) after theatrical release on titles with less than $50 million box office. AMC also shares in the PVOD revenue.

Aron had been understanding of Warner’s decision to release DC superhero sequel Wonder Woman 1984 in theaters and HBO Max on Christmas Day. But an entire year’s film slate is another issue.

“As this issue gets sorted out, we are nonetheless encouraged that vaccines protecting society at large against the coronavirus are very much at hand,” Aron said. “So, it is our expectation that moviegoers soon will be able once again to delight in coming to our theaters without any worry — viewing the world’s best movies safely in our big seats, with our big sound and on our big screens.”

Read Also: Warner Bros. Releasing All Movie Releases Same Day on HBO Max, Theaters in 2021

Meanwhile, Cineworld, owner of No. 2 (and temporarily shuttered due to the pandemic) exhibitor Regal Cinemas, with more than 7,000 screens in the U.S., said it expects to iron out a new distribution agreement with Warner going forward.

In a statement, Cineworld said it understood Warner’s decision to bow Wonder Woman 1984 directly to Max due to the theater closings. It also remains “very encouraged by the giant steps achieved” with regards to the coronavirus vaccination process, which it expects will be put in place earlier than previously anticipated.

“This will generate significant relief for our industry and enable our cinemas to make a great comeback,” Cineworld said.

The exhibitor said that when a vaccine is available, it would look to reach an agreement with Warner about release windows and financial terms that will work for both sides.

“Big movies are made for the big screen and we cannot wait to reopen our cinemas in [the first quarter] in order to offer our customers, as always, the best place to watch a movie,” Cineworld said.

Cinemark Studying Landmark Warner/HBO Max Distribution Announcement

Cinemark Cinemas, the nation’s third-largest exhibitor, is studying the impact of Warner Bros.’ landmark decision to release its entire 2021 slate of movies concurrently on SVOD platform HBO Max.

“In light of the current operating environment, we are making near-term booking decisions on a film-by-film basis,” a company rep said in a statement. “At this time, Warner Bros. has not provided any details for the hybrid distribution model of their 2021 films.”

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Cinemark, unlike No. 2 exhibitor Regal Cinemas, is operating screens domestically with limited capacity and strict safety protocols against the spread of the coronavirus. Regal has shuttered most operations indefinitely.

No. 1 exhibitor AMC Theatres and Cinemark earlier this year inked separate abbreviated theatrical window distribution agreements with Universal Pictures — enabling the studio to release any movie with less than $50 million box office to in-home digital distribution after 17 days and three weekends in theaters.


AMC Theatres Looking to Sell 200 Million Shares of Common Stock

AMC Entertainment, parent to the world’s largest movie theater chain, AMC Theatres, Dec. 3 announced plans to sell 200 million shares of Class A common stock. While shares were trading at $4.10 in early morning trading, AMC offered the stock at $4.22 per share, which would make the offering worth $844 million — 33% higher than the company’s current market cap of $561 million. Through Oct. 30, AMC had 85.6 million Class A shares and 51.8 million Class B shares outstanding.

With the ongoing coronavirus pandemic causing havoc on operations and its fiscal solvency, AMC has aggressively sought to refinance its debt, market screens to private watch parties, sell transactional VOD movies on its website and partner with Universal Pictures last summer for the groundbreaking 17-day theatrical window on select movie releases.

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That said, AMC reported a $905.8 million loss in its most-recent fiscal period, compared with a loss of $54.8 million during the previous-year period. Revenue plummeted 91% to $119.5 million, from $1.31 billion in 2019.

Kingdom Capital, in a note last month, said AMC has done its best to raise capital in the midst of an unprecedented swoon in the moviegoing industry. That said, the investor reiterated the bottom line: AMC Theatres saw 5.2 million moviegoers through Oct. 9, representing a same-theater attendance decline of about 74% compared to the same period a year ago.

“AMC is a [fiscal] zero,” Kingdom wrote. “It wasn’t profitable before COVID and it won’t be again anytime soon until the debt is addressed. And that will be done through Chapter 11.”

AMC Theatres ‘Fully Onboard’ With ‘Wonder Woman 1984’ Concurrent Theatrical, HBO Max Release Strategy

Following WarnerMedia’s announcement that it will simultaneously release the highly anticipated DC Comics superhero sequel Wonder Woman 1984 in theaters and on HBO Max on Christmas Day, scuttlebutt suggested major exhibitors would balk screening the Gal Gadot-starrer without an exclusive theatrical window.

However, AMC Entertainment, parent to the world’s largest theatrical chain, AMC Theatres, is breaking from convention and supporting Warner Bros.’ decision to bypass any theatrical window, in addition to transactional VOD revenue — an interesting move considering the chain (along with Cinemark) has a PVOD revenue-sharing agreement in place with Universal Pictures in exchange for narrowing theatrical windows down to 17 days for some titles.

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Wonder Woman 1984

In a statement from AMC CEO Adam Aron, the executive said AMC would “eagerly” showcase Wonder Woman 1984 on its 11,000 screens worldwide regardless of the absence of any theatrical exclusivity.

Aron said AMC had been in “active and deep dialogue” with Warner to determine the best release strategy for director Patty Jenkins’ follow-up to her 2017 box office hit Wonder Woman, which generated $822 million worldwide, in the middle of a pandemic.

“Given that atypical circumstances call for atypical economic relationships between studios and theatres, and atypical windows and releasing strategies, AMC is fully onboard for Warner Brothers’ announcement today,” Aron said, adding that the chain continues to believe that the traditional theatrical window benefits consumers, filmmakers, studios and exhibitors.

“Even so, we also have clearly demonstrated this year that we are flexible and remain open to evolving long-standing business models, provided that we do so in ways that improve the industry ecosystem for all players,” Aron wrote. He said the chain has “instituted novel (release) approaches” with other movie studios during the pandemic.

AMC posted a $905 million loss in its most-recent fiscal period, with revenue down 91% due to a dearth of studio new releases, shuttered screens in Los Angeles and New York, and limited seating at screens that are operating.

With WarnerMedia making Wonder Woman 1984 available on HBO Max, it is effectively undercutting the main reason consumers go to the cineplex. Max costs $15 monthly — about the same price as a movie ticket and concession. More importantly, Max offers new subs a free seven-day trial, which means a consumer could register an account, stream the movie and then cancel.

“As we navigate these unprecedented times, we’ve had to be innovative in keeping our businesses moving forward while continuing to super-serve our fans,” said Ann Sarnoff, CEO of WarnerMedia Studios and Networks Group. “We realize that a lot of consumers can’t go back to the movies due to the pandemic, so we also want to give them the option.”

As a result, Wonder Woman 1984, with a reported $200 million production budget, could essentially become an expensive holiday freebie to existing Max subscribers and a lure to potential subscribers. Or moviegoers could frequent the cineplex without a vaccine in the middle of the flu season during a health crisis.

“Hit me up on Xmas day and show me where there will be open theaters,” said Michael Pachter, analyst with Wedbush Securities in Los Angeles. “We should be up to 300,000 infections a day by then.”

Regardless, Aron is looking on the bright side.

“We hope movie lovers enjoy Wonder Woman 1984 during the holidays this year at AMC,” he wrote.


AMC Announces Private Theater Rentals for as Low as $99

As the pandemic keeps movie theater attendance low, AMC Entertainment has announced the official launch of private theater rentals for as low as $99 for up to 20 people.

The rentals are accessible through an automated booking and purchase system on the AMC website and mobile app. The launch comes four weeks after the initial beta launch of the product, which resulted in 110,000 inquiries around the country, dwarfing the total number of AMC’s private theater rentals in all of 2019 (26,000) by more than four times, according to AMC.

Guests can book a private showing at or by updating and using the AMC Theatres mobile app. They select a movie that’s playing in their local theater, the time and date of their requested showtime, confirm and checkout. Rentals must be made at least one day in advance and are subject to availability at the theater.

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New releases, such as Tenet, The War With Grandpa and Freaky, are available starting at $149 plus tax, up to $349 plus tax, depending on location and theater. The rental charge covers the cost of up to 20 tickets, and there is no additional required charge or minimum food and beverage charge as part of the rental. Outside food and drink may not be brought into the screening.

AMC Safe & Clean policies and protocols include mandatory mask wearing and appropriate social distancing within the auditorium. In addition, AMC abides by all state and local directives regarding movie theater operations, and in rare cases, the total allowed guest count may be less than 20 to comply with state and local directives.

“The results and feedback from our guests about AMC Safe & Clean have been overwhelmingly positive, and private theater rentals at AMC provides an additional layer of safety and security to those moviegoers who are looking to see movies with just their family members and friends,” Elizabeth Frank, EVP of worldwide programming and chief content officer, said in a statement. “It’s unprecedented for AMC to receive 110,000 contacts in four weeks about a private theater rental, based only on word of mouth and organic publicity, and we are excited about and appreciative of the interest this has sparked among AMC guests.”

AMC Theatres Posts $905 Million Q3 Fiscal Loss

Fiscally challenged AMC Theatres Nov. 2 revealed the ongoing hardships imposed upon the theatrical industry by the coronavirus pandemic led to the world’s largest exhibitor reporting a $905.8 million third-quarter (ended Sept. 30) loss, compared with a loss of $54.8 million during the previous-year period. Revenue plummeted 91% to $119.5 million, from $1.31 billion a year ago as theaters either remain shuttered in key markets or have limited seating capacity due to social distancing guidelines.

Through nine months of the fiscal year, AMC has lost $3.64 billion, compared with $135 million in 2019. Moviegoer attendance is down nearly 97% to 1.96 million, from 61.1 million a year ago. For the fiscal year-to-date, attendance is down 78% to 41.6 million, from 188 million.

“The magnitude of the impact of the global pandemic on the theatrical exhibition industry was again evident in our third quarter results, as theater operations in the U.S. were suspended for nearly two-thirds of the quarter,” CEO Adam Aron said in a statement.

While not high on the list of protected industries during the pandemic, AMC has proactively sought third-party financial lifelines. In March, the chain raised $900 million from new debt and equity capital, secured more than $1 billion of concessions from creditors and landlords, and raised more than $80 million from asset sales in the Baltic region.

Earlier today, AMC announced it would sell 20 million Class A common shares for $47.7 million.

“The liquidity enhancing and leverage reducing actions that we already have taken and will further need to take, combined with our relentless focus on efficiency and cash management, are all crucial to navigating through this storm,” Aron said.


AMC Entertainment Selling 20 Million Shares to Raise $47.7 Million in Cash

AMC Entertainment Nov. 2 disclosed it is selling 20 million shares of Class A common stock to help the financially struggling theater chain generate $47.7 million in cash. The world’s largest theatrical chain said it would use the funds from the sale for general corporate purposes, which could include the repayment, refinancing, redemption or repurchase of existing indebtedness or capital stock, working capital, capital expenditures and other investments.

AMC has seen its business virtually shut down since mid-March due to the coronavirus pandemic. It is now operating more than 80% of its domestic screens with social distancing and reduced seating capacity — but has warned it could run out of cash by the end of the year without fiscal assistance.

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AMC, which will report third-quarter fiscal results after the market closes, over the summer restructured its long-term debt with lenders, generating $200 million in cash. The company also sold nine theaters in the Baltics for $77 million, while selling another $100 million in bond debt.


AMC Theatres Announces Another Key California Re-Opening

AMC Theatres Oct. 27 announced that several locations in Northern California, including San Francisco and the greater Bay Area, will resume operations beginning Friday, Oct. 30. As a result of these openings, AMC expects to have approximately 540 of its 600-theater circuit open and serving guests by the end of the month.

Moviegoers can return to AMC Metreon 15, AMC Kabuki 8, AMC Eastridge 15, AMC Mercado 20, AMC Saratoga 14, AMC NewPark 12 and AMC Bay Street 16, as well as the all new AMC Dine-In Sunnyvale 12, a brand new theater that will open for the first time. Upon reopening, these AMC locations will abide by all state and local ordinances.

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“The reopening of movie theaters around the country is essential to the theatrical industry and the entire entertainment ecosystem, and we thank local leaders in the Bay Area communities for allowing our guests to return to AMC,” CEO Adam Aron said in a statement.

Aron said an “overwhelming majority” of state and local governments recognize the “strong” steps the chain has taken to focus on the health and safety of moviegoers and theater workers.

In areas where theaters are not yet able to open, AMC continues to have discussions with local authorities about resuming operations. AMC said would reopen its remaining theaters once authorized to do so by state and local officials.

New theatrical releases include Come Play on Oct. 30; Let Him Go on Nov. 6; Freaky on Nov. 13; The Last Vermeer on Nov. 20 and The Croods: A New Age on Nov. 25, as well as local-language films in certain countries outside the United States.

AMC Theatres Says Q3 Revenue Plummeted 91%

AMC Theatres’ summer blockbuster was a no-show due to the coronavirus effectively shutting down all screens. On Oct. 20 the exhibitor disclosed the harsh fiscal reality: The nation’s largest movie chain generated just $119.5 million in revenue for the fiscal period ended Sept. 30. That was 91% less than the $1.32 billion generated during the previous-year period. Revenue year-to-date through the quarter topped $1 billion, which was down about 75% from $4 billion a year earlier.

Parent AMC Entertainment disclosed the results in a regulatory filing as it entered into an equity distribution agreement with Citigroup and Goldman Sachs to sell up to 15 million shares of Class A common stock.

Through Oct. 16, AMC had resumed operations at 519 of its 598 U.S. theaters, with limited seating capacities of between 20% and 40%, representing approximately 87% of the U.S. theatres and 80% of 2019 U.S. same-theater revenue. Since the resumption of operations in its U.S. markets, AMC has fielded more than 2.6 million moviegoers, representing a same-theater attendance decline of about 85% compared with the same period a year ago.

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AMC said the remaining 13% of the U.S. theaters left to reopen are primarily located in California, Maryland and New York, and include some of the company’s most productive theaters, representing approximately 20% of 2019 domestic revenue. As previously reported, 12 theaters in New York State are scheduled to open Oct. 23. AMC said it has an “active dialog” with local and state government officials, however there is “limited visibility” around the timing for resumption of the remaining theater operations.

As of Oct. 16, 2020, AMC had resumed operations at 309 leased and partnership international theatres, representing about 86% of the company’s international theatres and approximately 91% of 2019 international same-theater revenue. Seating capacity at the reopened international theatres remains limited to between 25% and 50% of capacity to ensure social distancing. Since the resumption of operations in its International markets June 3, AMC has entertained more than 5.7 million moviegoers, representing a same-theater attendance decline of approximately 74% compared with the same period a year ago.

To lure consumers into theaters, AMC launched “AMC Private Screening,” which allows movie goers to reserve a separate AMC auditorium for a private screening for up to 20 people, starting at $99 plus tax.