The COVID-19 lockdowns came at the worst possible time for beleaguered theater chain AMC Entertainment. They were already heavily burdened with debt and facing a corporate restructuring, so having to close their doors for months on end looked like it might be their death knell after a hundred years of trading.
CEO Adam Aron hosted a conference call yesterday to give investors a picture of where AMC currently stands and explained that since the lockdown began, the company has devoted its energies into renegotiating with “hundreds and hundreds of landlords” around the world.
Deals have been made that have forgiven rent during the lockdown (with the landlords promised a piece of future revenue as compensation), lowered rents for the second half of 2020, or for the duration of the existing lease. In addition, they’ve also been striking deals with their snack vendors, movie studios and various other partners to defer costs while theaters are closed.
Now, it’s looking like these lifesaving efforts may have paid off. AMC are set to post a massive net loss of $2.18 billion for Q1 2020, but it seems that they’re going to stay in business for a while yet. Aron revealed that “almost all” US and UK theaters are planned to reopen in July, with Christopher Nolan’s Tenet being the showcase film that’ll mark the rebirth of the theatrical experience on July 17th (something I’m sure will put a smile on Nolan’s face).
Beyond that, they point to a compressed release cycle of delayed blockbusters like Wonder Woman 1984, Black Widow, Mulan and many more that’ll boost revenue (though they’re still beefing with Universal over VOD releases, so none of their films as yet). Aron also promised that AMC will be leaders in theater cleanliness and will protect customers by upgrading their ventilation systems, installing electrostatic sprayers and partnering with Clorox to ensure that surfaces are properly disinfected.
Whether all of this ultimately saves AMC remains to be seen, but at least they’re not going down without a fight.
