This is actually a bit of good news for the film industry, including Disney. AMC, the largest theater chain in the world, was feared to be heading for bankruptcy before it could reopen after the Coronavirus shut-downs. Now it appears they may have enough to get through until Thanksgiving and their stocks have just increased.
Yesterday the theater chain announced it had ” private offering of $500 million of first lien notes due 2025″ according to MarketWatch.
Previously AMC’s CEO, Adam Aron, had stated that the company didn’t have “a penny of revenue” coming in over the shut-down. This of course led to the inevitable questions about AMC heading towards bankruptcy. Finally, it’s looking up and their stocks are gaining as they are securing the resources to continue through the shut-down.
In an attempt to conserve money AMC has been working with theater landlords for deferred rent payments and the company furloughed most of their work-force, including the CEO–According to Reuters:
“The furloughs apply to Chief Executive Adam Aron and other employees at the company’s headquarters in Leawood, Kansas. Some workers will see reduced hours and reduced pay, while others will be cut to no hours and no pay.”
Right now many studios, including Disney, have pushed their film slate back into July as the world waits to see what the outlook for theater re-openings is. Film studios are opting to bank on the theaters instead of making the quick money by going to digital distribution. Studios definitely benefit from the theater experience as it gives them “box office” cred with investors and audiences.
Films were coming, but the question was IF there would be theaters to run them in. Now it’s looking more and more like this all could work out, provided the shut-down ends before the movies begin.
AMC is already shut-down until the end of June, but most film release dates have been extended until July or later. Prior to the changed dates AMC stocks had plummeted over 66%. Now, the delayed releases and positive finance news we are seeing an almost 32% rebound. It’s turning around to a much more positive outlook.
The movie theater experience may be saved after-all. I think we could all use this positive news right now!
Sources: MarketWatch, Reuters,
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