AMC Entertainment said Tuesday it will be depleted of cash by the end of 2020 or early 2021, and it is exploring options for what to do next.
- AMC— one of the United States’ largest movie theater chains — has been struggling to win back audiences since the beginning of the pandemic.
- The theaters reopened in the summer despite delays. Key markets like New York City and Los Angeles remain closed.
- Per Deadline, AMC said in a SEC filing that its “cash burn” — how much money it spends every month — has been impacted by “the timing of resumption of theatre operations, including with respect to some of our most productive theatres which remain closed, the timing of movie releases and the slate of future releases, theatre attendance levels, landlord negotiations and minimum lease payments, costs associated with the AMC Safe and Clean initiative, and food and beverage receipts.”
- According to Deadline, AMC said it “believes its cash burn to date is in line with the prior update. However, given the reduced movie slate for the fourth quarter, in the absence of significant increases in attendance from current levels or incremental sources of liquidity, at the existing cash burn rate, the company anticipates that existing cash resources would be largely depleted by the end of 2020 or early 2021. Thereafter, to meet its obligations as they become due, the company will require additional sources of liquidity or increases in attendance levels. The required amounts of additional liquidity are expected to be material.”
CNN reports that AMC sees two solutions to survive:
- People would have to buy tickets to movies.
- AMC would need to borrow more money in different ways.
Getting people to return to movie theaters hasn’t been an easy task. AMC opened 494 of 600 theaters by October (with 20% to 40% capacity). The company has reportedly only served 2 million guests — an 85% decline from 2019, according to CNN.