Alice Hancock in London
AMC, the world’s largest cinema chain, has warned that without a run of blockbusters and with some of its most profitable screens closed it could run out of cash by the end of the year.
Shares in the company, which runs AMC Theatres in the US and Odeon in the UK, fell almost 12 per cent in early New York trading on Tuesday after it warned that it would need “material” amounts of additional liquidity while attendance at its cinemas remained at less than 80 per cent of last year’s levels.
The cinema industry is facing one of the biggest challenges in its history as studios have pushed blockbusters to next year in the hope that the coronavirus pandemic will be over or released them on streaming platforms.
After MGM announced that it would delay No Time To Die — the latest film in the James Bond franchise — from November until April, AMC’s rival Cineworld said that it would shut all of its 660 US and UK screens.
AMC, however, has kept its cinemas open, claiming that a deal it struck with Universal Studios in July through which AMC receives a cut of the studio’s on-demand revenues had enabled it to weather the dearth of blockbuster releases.
In its update on Tuesday, it said that competitors’ decision to temporarily close movie theatres “would further exacerbate” the number of films likely to be postponed, as studios lacked cinemas to release films into. Disney, one of the biggest distributors of box office hits, also announced this week that it would be restructuring its business to prioritise its streaming platform.
By the end of last week, AMC said it had 494 of its 598 US screens open and a further 308 open internationally. But social distancing had limited seating capacity to between 20 and 40 per cent, it added, resulting in attendance in the US being about 15 per cent of last year’s levels. Cinemas in big markets such as California and New York remain closed.
AMC, whose biggest shareholder is the Chinese conglomerate Dalian Wanda, said that it was exploring several avenues to raise cash including asset sales, additional debt or equity financing and joint ventures with current business partners.
Source : https://www.ft.com/content/6772d242-ed7d-3215-9ff4-0a7340ad0de7