Things are not looking so great for AMC theaters and Regal. Battling coronavirus, and the associated stay-at-home orders that have shuttered theaters across the country and around the world, has resulted in a devastating financial quagmire for AMC and poses a serious challenge for other theater chains as well.
AMC was already operating with substantial debt before the pandemic hit and did not have much leeway for a downturn, much less a complete shutdown!
Of course, AMC is not the only movie theater chain affected by the COVID-19 virus response. It’s primary competitor in the US, Regal Cinemas and others are also sitting on a huge amount of dormant movie theater properties.
An article published in the New York Post notes that AMC has furloughed its 25,000 workers and that it informed landlords that it would stop paying rent as of April. Meanwhile Regal Cinemas has recently warned that there would be “significant doubt” as to whether it would survive the financial pressure of the current situation.
Movieweb has an article discussing how AMC’s credit has been downgraded to CCC- which stands for “Default imminent, with little prospect for recovery.”
Bankruptcies seem likely. Will landlords negotiate new leases to allow theaters to attempt a comeback? Will people want to flock back to theaters, or is it the entertainment equivalent of shaking hands? What will be done about the gap in actual movie production that is now also a consequence of the coronavirus response? What about IMAX and Dolby Cinema, how does this all affect those brands?
Much to ponder, join the discussion here.