AMC Entertainment has admitted it could go bust by the end of the year or by early 2021 if attendance figures remain low after reopening cinemas following their closure due to COVID-19.
In an SEC filing today (Tuesday), the world’s largest exhibitor warned that attendance at 494 of its 598 US locations that it has opened in recent weeks is down approximately 85 per cent.
The firm, which is already heavily leveraged and recently renegotiated its debt to improve its balance sheet, said it is exploring potential sources of additional liquidity, including asset sales, joint ventures or minority investments.
In the filing, the company said: “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.”
Cinemas in major markets such as Los Angeles and New York City are still closed due to COVID-19, and attendance in reopened states is limited due to social distancing restrictions.
AMC has raised close to $40m to date by selling shares and in a major debt restructuring announced over the summer, it brought in several hundred million dollars in cash, reduced interest payments and extended maturities on loans.
The news comes after Cineworld, the largest cinema chain in the UK, announced last week it will shutter all its screens in the UK and the US after the release of the latest James Bond film was delayed again.
The cinema chain, which has 128 theatres in the UK and Ireland and 536 Regal theatres in the US, confirmed it would suspend its operations from Thursday, which will put 45,000 jobs at risk, with 5,500 of those in the UK.
Atom Tickets
US social movie ticketing firm Atom Tickets has teamed up with the Independent Cinema Alliance (ICA) to support independent cinemas in offering contactless, digital ticketing for customers.
Members of the ICA, which represents more than 175 companies and 3,000 screens, will be provided with free access to Atom’s technology during this recovery period from the COVID-19 pandemic shutdown.
The partnership aims to expand digital ticketing to independent theatres via a pre-negotiated agreement, which provides a signup experience followed by a technical integration coordinated by Atom’s in-house technical support and onboarding team.
Max Lynn, head of corporate development and exhibitor relations at Atom Tickets, said: “We’re thrilled to have this much-needed partnership in place during this critical time for independent cinemas and are committed to marketing them to our movie fans.
“We must do what we can to help our industry succeed. Delivering the best movie ticketing technology for theatres of all sizes and making it easier for movie fans to enjoy going to the movies is core to our mission.”
Independent cinema owners will also gain access to Atom’s audience and partnerships with Snapchat, Amazon, T-Mobile and others. Atom will also develop ongoing marketing communications to local users to drive more customers to independent cinemas via the Atom app and website. Cinemas owners can also choose to integrate Atom’s ticketing on their own website.
Todd Halstead, ICA executive director, added: “ICA is committed to creating opportunities for independent exhibitors and we are excited to launch our new partnership with Atom. People want to get back to the movies, and Atom’s industry-leading digital ticketing platform and their marketing support will help independent exhibitors bring back the magic of moviegoing to communities across the country.”
“While we have focused on delivering a safe and entertaining experience across our 28 locations, contactless ticketing has been something we knew we wanted to offer our customers but until Atom Tickets partnered with ICA, we didn’t have an easy way to get access to that kind of technology,” said Martin Watson from Premiere Cinemas. “We’re thrilled to have Atom as a partner and look forward to working with them to drive awareness for our locations being back in business.”
Image: Elliott Brown
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