It seems that the largest theater chain in the country might have made their declaration to stay open through the pandemic a bit early. Cineworld announced the shuttering of all of their 500+ Regal Cinema locations earlier this month, and everyone wondered which chain was going to be next. Cinemark and AMC Entertainment both declared their intentions to stay open, but the things might be a little worse than we thought. It sounds like AMC Entertainment could run out of cash assets by the end of the year, according to SEC Filing obtained by Deadline.
"[The company] believes its cash burn to date is in line with the Prior Update. However, given the reduced movie slate for the fourth quarter, in the absence of significant increases in attendance from current levels or incremental sources of liquidity, at the existing cash burn rate, the Company anticipates that existing cash resources would be largely depleted by the end of 2020 or early 2021. Thereafter, to meet its obligations as they become due, the Company will require additional sources of liquidity or increases in attendance levels. The required amounts of additional liquidity are expected to be material."
Everyone keeps citing New York as the biggest reason for all of these closures, but the theater business should not be relying on the population of one city to keep it afloat. This sounds bad, but the company is looking to invest in other places and has reportedly raised $40 million by selling shares. However, that is not enough to keep up with the "cash burn" that the open theaters are currently going through. There is the potential for another investor to come in, but AMC doesn't seem too confident that will fix the problem.
"there is a significant risk that these potential sources of liquidity will not be realized or that they will be insufficient to generate the material amounts of additional liquidity that would be required until the company is able to achieve more normalized levels of operating revenues."
At the moment, the domestic box office doesn't look like it's going to return to normal anytime soon as the United States fails to get its collective shit together. AMC might be in real trouble come 2021 and as someone who absolutely adores the theater experience, please just wear your freaking mask.