When the COVID-19 pandemic began, many people were concerned that local arthouse theaters and independent exhibitors would be the first cinema-related businesses to be shut down for good. No one really thought that AMC or other major worldwide theater chains would be possibly destroyed by the pandemic. Well, according to a recent government filing, the leadership of AMC isn’t quite as confident as they were before about the future of the company. That is to say, AMC’s COVID-19 losses could mean the end of the world’s largest theater chain.
Recently, AMC Theatres filed a new regulatory document explaining the full extent of its current financial situation in regard to the global pandemic. There is plenty of discussion about the exact financial figures, but suffice it to say, the company is struggling as there is no income flowing in and plenty of expenses being spent. And if things don’t change soon, AMC could find itself out of business.
The document says, “We cannot be certain that we will have access to sufficient liquidity to meet our obligations for the time required to allow our cash-generating operations to resume or normalize. We may not be able to obtain additional liquidity and any relief provided by lenders, governmental agencies, and business partners may not be adequate and may include onerous terms. Due to these factors, substantial doubt exists about our ability to continue as a going concern for a reasonable period of time.”
Long story short, it appears that AMC is hopeful that it can exist after the COVID-19 pandemic runs its course, but if there are any hiccups with finding additional financing, a second outbreak, or a delay in opening the company’s theaters, the chain could be faced with an existential threat.
One of the other major issues facing the company, and all theater exhibitors around the world, is the lack of new studio films. And AMC feels that any sort of delay in major studio films, like say WB’s “Tenet,” there could pose yet another threat to the company’s continued existence.
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“Even if governmental operating restrictions are lifted in certain jurisdictions, distributors may delay the release of new films until such time that operating restrictions are eased more broadly domestically and internationally, which may further limit our operations,” the company said.
Even after discussions weeks ago about the company filing bankruptcy or perhaps even the crazy idea that Amazon might purchase the chain, it appears AMC is still unsure about its own future and what might happen. So, even though we sorta joke about “Tenet” saving the theatrical experience, it’s not that crazy to say. AMC needs a confluence of a number of factors, including the July release of Christopher Nolan’s film, or the world’s largest cinema chain could be gone forever.