Variety is reporting some depressing news that felt all but inevitable lately: it’s looking increasingly likely that AMC Theatres will file for bankruptcy following the COVID-19 pandemic.
MKM Partners released a report on Thursday and the news was nothing but bad for the nation’s biggest cinema chain:
"Based on our view that theatres will be closed until at least August and our belief that AMC lacks the liquidity to stay afloat until that time, we expect the company will soon be faced with filing for bankruptcy"
The report also said that AMC will likely keep its head above water until June or July. That’s when its $265 million on hand will dry up and bankruptcy will be necessary. The company apparently has $4.75 billion (yes, with a B) in debt and is burning through cash at approximately $155 million per month during the theatrical blackout. Things are just not going in AMC’s direction. They’re doing all they can to save themselves, from furloughing more than 600 corporate employees (including the CEO) and refusing to pay rent starting in April. But even those drastic measures will likely not do much since the coronavirus shutdown is expected to last into the summer.
This is just bad news all around and suggests a scary future for other theater chains. AMC is the biggest name in the game. Yes, they had considerable debt going into the COVID-19 outbreak but if they can’t survive the pandemic then what does that mean for smaller chains? Even with government assistance and (hopefully) the return of business in a few months, theaters are in a bad way. Plus, even when they open their doors again, will customers come rushing back? That is unlikely because people will still be scared to congregate for a long while after the outbreak dies down. This won’t be like flipping a switch, the rebuilding will take some time. And time is something that theater companies are sadly short on.
News like this makes pleas for the future of America’s theaters even more important and pressing. I’m not saying that all theater chains will go out of business and we will only be able to watch movies at home but there is a chance that the COVID-19 pandemic will fundamentally alter the movie-going experience forever.