AMC Theaters May Run Out of Cash By The End Of 2020

2020 has been a tough year movie theaters, and AMC may run out of cash by the year's end.

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AMC Theaters is in danger of running out of cash by the end of the year, the company said in a new filing with the Securities and Exchange Commission, causing its stock to drop by nearly 13% on Tuesday.

The theater chain, which is the largest in the world, said on Tuesday that its "existing cash resources would be largely depleted by the end of 2020 or early 2021." The company says that it will require additional sources of money or increases in attendance levels to continue.

This news follows just a week after Cineworld announced the temporary closure of all Regal theaters in the United States and the United Kingdom. AMC said in the SEC filing that "major movie releases that were previously scheduled to be released in the fourth quarter have either been rescheduled for 2021 or slated for direct to streaming in lieu of a theatrical release, leaving a reduced slate of movie releases for the remainder of the year," further exacerbating the chain's existing problem. The final straw for Regal seemed to be the delay of No Time To Die, the latest James Bond movie, to April 2021.

AMC's announcement is just the latest in a string of changes in the movie world. AMC lashed out at Universal when the studio decided to release Trolls: World Tour directly to streaming services, and Disney recently announced a major re-org centered around its Disney+ streaming service.

Image credit: Getty Images/Noam Galai

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jenovaschilld

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The AMC corporation along with Regal monopolized the movie theatre industry - and with this pandemic- It might be a good thing if they just burn and die and then allow small town and state movie businesses to grow and take its place. AMC not only drove up movie prices and concessions, but also drove out almost any form of competition. And meanwhile the local movie theatre in small home towns across the country just fell off the map due to escalation pricing by movie studios who have done better then ever. Meaning, if you have more screens you get a insanely better rate, small theatres under 8 screens, just get crushed. A 8 screen small town theatre may end up paying more for its 8 movies then a AMC for all 16 of theirs.

And movie studios are doing just fine, pre-pandemic, allowing and encouraging this corporate model. Yeah, Sony studios and Fox may talk about dropping profits, but they still continue to rake in more and more and more. Proof is easy, the shear amount of movies being released to the theatres, by all studios, has also increased year over year.

AMC an Regal have operated like a Ticketmaster in not only controlling the costs, but who gets to play, who and what is allowed via concessions, and they work with each other to ensure there is no competition to control prices. Even with inflation, the movie 'experience' for a family of four has greatly outpaced any of the decades since. https://www.statista.com/statistics/187091/average-ticket-price-at-north-american-movie-theaters-since-2001/

AMC argues, we still have 6$-8$ tickers for seniors or kids during the middle of the week. But the price of popcorn is $10, $15, $20 and more. If people are willing to pay that..... that is fine, I guess. But also allowing small town businesses to take up some of that market share would benefit states, consumers and open up even more jobs, then what jobs are offered now by these corporations. There is nothing good about the pandemic, but maybe a reset in the movie theatre, concert, and sporting arenas industry... might be a good thing.

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