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AMC Blasts MoviePass for ‘False Statements’ About Profitability

The AMC movie theater chain has blasted MoviePass in the wake of the subscription service’s decision to pull out from 10 of the chain’s busiest multiplexes, accusing it of lying about AMC’s finances.

“AMC has taken no action to block the acceptance of MoviePass at our theatres,” the exhibitor said in a statement. “We have no further comment about MoviePass’s unilateral actions. We are, however, disappointed that MoviePass continues to make false statements about AMC, including today when MoviePass greatly exaggerated its contributions to AMC’s profitability.”

The service, which costs $9.95 per month, was no longer available on Thursday at the AMC Century City 15 in Los Angeles; AMC Mercado 20 in Santa Clara, Calif.; AMC Disney Springs 24 in Orlando, Fla.: AMC Loews Boston Common 19 in Boston; AMC River East 21 in Chicago; AMC Mission Valley 20 in San Diego; AMC Tysons Corner 16 in McLean, Va.; AMC Veterans 24 in Tampa; and AMC Loews Alderwood Mall 16 in Lynwood, Wash.

MoviePass pays theaters the full price for a ticket, so it is in essence subsidizing its users’ moviegoing and losing money each time they check out a film. AMC, the country’s largest chain, threatened legal action against MoviePass in August and predicted that the company would fail because its business model was not sustainable.

MoviePass said earlier this month that it had more than 1.5 million subscribers. Ted Farnsworth, the CEO of MoviePass parent Helios & Matheson, issued a statement Friday morning blasting AMC for not collaborating, calling it “a move that is not in the interest of our subscribers and AMC theater-goers.”

Farnsworth also claimed that MoviePass represented approximately 62% of AMC’s operating income — which would equate to $34.4 million of gross profits to AMC in the upcoming quarter or over $135 million to AMC’s annual gross profits, which doesn’t include concession sales from MoviePass subscribers.

“In publicly disclosed 2017 financial documents, AMC claimed each customer spends $4.88 on concessions each visit – meaning MoviePass subscribers could bring an additional $17.1 million in AMC concession revenues for Q1 of 2018, which on an annual run rate means $68.4 million more — an annualized run rate going forward of over $203.4 million revenue from MoviePass subscribers,” Farnsworth said.

AMC chief executive Adam Aron in November told analysts that the theater chain would not participate in a revenue-sharing agreement with MoviePass. “We appreciate their business, but I think it’s also important to make clear that, despite claims they’ve made to the contrary, AMC has absolutely no intention — I repeat, no intention — of sharing any — I repeat, any — of our admissions revenue or our concessions revenue with MoviePass,” he said.

Stock of AMC Entertainment Holdings dropped 30 cents to $12.85 and stock of Helios and Matheson slid 35 cents to $8.58 in trading Friday. China’s Dalian Wanda Group has owned AMC since 2012.

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