Movie theater chain American Multi-Cinema (AMC) recently filed financial reports for the first quarter of 2020. As predicted, the business suffered a severe loss of revenue, as all of its 1000-plus theaters across the country were forced to close in order to slow the spread of the novel coronavirus typically referred to as COVID-19.
The public reports included a statement that “substantial doubt exists about [AMC’s] to continue as a going concern for a reasonable period of time.” Fears of bankruptcy, which were first raised when COVID-19 began to spread globally, remain very present as the difficult year continues.
AMC’s financial reports indicate a loss of over 2 billion dollars as a result of COVID-19, referred to as “impairment charges”. The company reported an almost total lack of revenue, a staggering decline compared to its generally successful first quarter in 2019. In addition, AMC was required to furlough over 600 employees nationwide and take on nearly 500 million in new debts in order to ride out closures and keep stocks competitive during these difficult times.
Despite this rather dire forecast, the company remains somewhat hopeful that they will be able to reopen some locations in time for highly-anticipated summer releases, such as Disney’s live-action Mulan and Christopher Nolan’s spy thriller Tenet. However, reports also acknowledge that returning to a profitable state would likely be hindered by the necessity for COVID-19 prevention measures following reopening. Proposed measures could include selling fewer seats in order to “space out” patrons within the theater and cleaning theaters, lobbies and concession stands much more frequently than what is currently done.
As of early June, some but not all US states have begun allowing movie theaters to reopen as long as certain restrictions are followed. However, many states with large movie-going audiences, including California and New York, are continuing to force AMC and other theaters to remain closed due to the danger inherent in large social gatherings.
It remains to be seen whether or not AMC will recover from this significant hit to its revenue. Some hope seems to exist, but it will strongly depend on what happens within the next few months.