After shutting down all locations on March 17th in order to combat the spread of COVID19, AMC Theaters may be in trouble. According to The Wrap, the popular theater chain's credit score has dropped — making closing the chain down for good a likely outcome.
AMC reported $149 million in losses in 2019, on top of a $5 billion+ deficit. According to S&P Global: "We expect AMC Entertainment Holdings Inc.'s (AMC) theaters will remain closed beyond June due to the impact of the global coronavirus pandemic. We do not believe AMC has sufficient sources of liquidity to cover its expected negative cash flows past mid-summer, and we believe the company will likely breach its 6x net senior secured leverage covenant when tested on Sept. 30, 2020, absent a waiver from its lenders."
AMC Theaters and the Future of the Theater Industry
With big summer blockbusters being pushed back to later opening dates, it is very likely we will see more than just AMC shutter its doors for good. Some smaller theaters are combating the loss of revenue by offering curbside pickup on popular movie theater snacks — such as popcorn, candy, and soda. There's a lot working against AMC, and other theaters, as a result of COVID19. Studios have started to shorten the gap between theatrical release and digital release, with movies such as Birds of Prey and The Invisible Man going to streaming within weeks of theatrical release. Granted, these are unprecedented times and this generation has not seen anything like this before. If the shortened window proves to be a viable option going forward, what's to stop studios from continuing this practice?
While I don't see theaters closing up and going the way of the dodo, there will be some very real changes to how people watch movies if and when theaters open up again. We could see a decrease in open seats (to still instill social distancing), and we could also see a decrease in snacks and food offerings at theaters. The concept of the luxury theater-going experience is something we likely see theaters pushing because each of those tickets is more expensive.