In an SEC filing on Friday, the struggling movie theater company warned its resources may be drained as early as next month. “In the absence of additional liquidity, the Company anticipates that existing cash resources will be depleted during January 2021,” the company wrote.
AMC Theatres also said that it has completed a debt offering of $100 million from investment firm Mudrick Capital Management. AMC has already deferred more than $400 million of rent obligations to 2021. Yet the cinema circuit estimates that it will require at least $750 million of additional liquidity to stay afloat amid a spike in coronavirus cases. Mounting to its challenges, AMC says the delay of major movies and the shift of some to online streaming platforms has presented the film exhibition community with even more obstacles.
“These challenges have been exacerbated by the announcement by Warner Bros. that its entire studio film slate for 2021 will move to simultaneous release, which may result in other studios adopting a similar strategy,” the filing said.
AMC was referring to Warner Bros. recent announcement that its entire 2021 slate — 17 films in total, including potential blockbusters like “Dune,” “The Matrix” and “In the Heights” — will land on the streaming service HBO Max the same day as their theatrical releases. Exhibitors are concerned the hybrid strategy, which the studio calls a “unique one-year plan” in response to the pandemic, will negatively affect ticket sales and have an irreversible impact on consumer habits because people will have the option to watch new movies from the comfort of their couches. Warner Bros. has been the only studio to institute such a sweeping change. However, Disney said Thursday that the animated movie “Raya and the Last Dragon” will premiere on Disney Plus for a premium price at the same time as it opens in theaters this spring.
With movie theaters still closed in major cities like New York and Los Angeles, AMC says attendance dropped 92% in October and November compared to the same period last year. As of Nov. 30, 404 of AMC’s 594 U.S. theaters are open, with capped seating capacity and limited hours of operation. Internationally, 108 of its 359 locations have resumed business, also with controlled attendance levels and reduced showtimes. Overseas venues have seen a similar decline in foot traffic.
AMC estimates that if attendance doesn’t significantly improve in 2021, the company would require more than $750 million to keep its theaters open.
“It is very difficult to predict when theatre attendance levels will normalize, which we expect will depend on the widespread availability and use of effective vaccines for the coronavirus,” the company wrote.