AMC Theatres Is Expected to Run Out of Money in 6 Months
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AMC Theatres Is Expected to Run Out of Money in 6 Months
AMC Entertainment to "Run Out of Liquidity" in 6 Months, Ratings Agency Warns
Debt ratings agency S&P Global Ratings has reduced AMC Entertainment Holding's credit ratings on liquidity concerns as the impact on the mega-exhibitor's theaters takes a toll on its available cash on hand.
"Given our expectations for a high rate of cash burn, we believe the company will run out of liquidity within the next six months unless it is able to raise additional capital, which we view as unlikely, or attendance levels materially improve," the agency said.
On Sept. 24, AMC said it would look to raise more fresh cash, in part for debt refinancings and repayments amid the coronavirus pandemic, via an equity distribution agreement for the potential issue of 15 million shares agreed with Wall Street banks.
That move came as the exhibition giant looks to continue reopening its U.S. theater circuit and survive the pandemic after a debt restructuring.
The debt ratings agency downgraded AMC's credit rating to CCC-, from CCC+, on weak liquidity, and with a negative outlook. S&P Global Ratings, in March 2020 as the pandemic first took hold, signaled it would review and potentially downgrade AMC's ratings amid the COVID-19 crisis.
In July, AMC completed a debt restructuring agreement with its bondholders that included $200 million in fresh cash and the Silver Lake Group purchasing $100 million in new senior notes. More recently, the cinema chain said it raised $77 million by selling nine theaters in Europe's Baltic region.
In its latest report on the exhibition giant, S&P Global argued AMC "continues to struggle operationally and financially because U.S. attendance remains weak after reopening, additional major theatrical releases are delayed and its cash burn might accelerate now that its theaters are open."
S&P Global said continuing reduced capacity at theaters and wary consumers continuing to embrace streaming platforms was likely to persist into 2021.
"The negative outlook reflects our view that a default, distressed exchange, or redemption appears to be inevitable within six months, absent unanticipated significantly favorable changes in the issuer's circumstances," the agency added.
On Oct. 1, with film production slowly restarting and cinemas reopening amid the COVID-19 pandemic, Credit Suisse analyst Meghan Durkin said Hollywood's content pipeline looked "increasingly risky" as a question mark remained over how comfortable filmgoers will be to return to their local multiplex, given the pandemic's current trajectory.
And on Wednesday, dozens of influential filmmakers joined the National Association of Theatre Owners, the Directors Guild of America and the Motion Picture Association in calling on Congress to provide assistance to struggling theater owners impacted by the ongoing COVID-19 crisis. They warned that many cinemas may not otherwise survive.
Most exhibition companies — or 93 percent — weathered losses of 75 percent in the second quarter of 2020 after moviegoing came to an unprecedented stop in mid-March. While more than half of theaters are now reopened, Hollywood continues to delay its major fall releases out of concern that many moviegoers aren't yet ready to return.
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Wylde's Favorite Films of 2024:
Dune Part II
Wylde's Favorite Series of 2024:
Fallout (Prime), The Gentleman (Netflix), Shogun (Hulu/Disney+)
Re: AMC Theatres Is Expected to Run Out of Money in 6 Months
Joey, this OP is loaded with facts and figures, I thought you'd love it.
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Wylde's Favorite Films of 2024:
Dune Part II
Wylde's Favorite Series of 2024:
Fallout (Prime), The Gentleman (Netflix), Shogun (Hulu/Disney+)
Re: AMC Theatres Is Expected to Run Out of Money in 6 Months
I was just remarking to a friend how I never really went to the movies before the pandemic but now that we have all been shut in for so many months, I kind of want to go watch a movie in the theater.
Everyone knows I love it when celebrities get fucked up or if giant multi-million dollar corporations eat shit. But this kind of makes me feel slightly sad.
Some theaters are open now but with the limited capacity also means limited concessions. Let's see what happens in the coming months. I'm sure AMC can come up with something to raise cash.
Speaking of concessions, I don't know about you guys but my broke ass can't afford to spend $15 on concessions on top of the $15 movie ticket. So I was thinking that maybe theaters need to rethink their approach. Even before the pandemic, I always thought theaters should cut back on the amount they charge for concessions. I understand they make like 99% of their profits from the sale of concessions.
When I went to the theater, they sold a medium popcorn for like $6 and a medium soda for around $5. If I was feeling rich maybe throw in a hot dog or nachos to split with the hot babe I was with which can cost another $7.
Anyways, I know most people who go to the theaters are not broke like me and can spend but I also know that if the prices were lower, people like me can afford to pay a few more bucks.
I guess AMC makes enough off selling stuff so expensively they don't have to cater to people like me. But I always think it's better to sell a lot more for less profit than less for more profit.
Just take popcorn for example:
Scenario A - High profit, less volume:
Medium popcorn sold for $6. Let's say the profit margin on mediums is like $5. Sell 350 medium popcorns a day = $1,750 in profits
Scenario B - High volume, less profit:
Medium popcorn sold for $4.75. Profit is now only $3.75 but they now sell 500 in a day because of the lower price = $1,875 in profits.
I suppose if I was in charge AMC would have gone out of business long before the pandemic. Maybe they have already found the equilibrium of getting people to buy their popcorn and not caring about whether broke-asses like me buy or not.
Everyone knows I love it when celebrities get fucked up or if giant multi-million dollar corporations eat shit. But this kind of makes me feel slightly sad.
Some theaters are open now but with the limited capacity also means limited concessions. Let's see what happens in the coming months. I'm sure AMC can come up with something to raise cash.
Speaking of concessions, I don't know about you guys but my broke ass can't afford to spend $15 on concessions on top of the $15 movie ticket. So I was thinking that maybe theaters need to rethink their approach. Even before the pandemic, I always thought theaters should cut back on the amount they charge for concessions. I understand they make like 99% of their profits from the sale of concessions.
When I went to the theater, they sold a medium popcorn for like $6 and a medium soda for around $5. If I was feeling rich maybe throw in a hot dog or nachos to split with the hot babe I was with which can cost another $7.
Anyways, I know most people who go to the theaters are not broke like me and can spend but I also know that if the prices were lower, people like me can afford to pay a few more bucks.
I guess AMC makes enough off selling stuff so expensively they don't have to cater to people like me. But I always think it's better to sell a lot more for less profit than less for more profit.
Just take popcorn for example:
Scenario A - High profit, less volume:
Medium popcorn sold for $6. Let's say the profit margin on mediums is like $5. Sell 350 medium popcorns a day = $1,750 in profits
Scenario B - High volume, less profit:
Medium popcorn sold for $4.75. Profit is now only $3.75 but they now sell 500 in a day because of the lower price = $1,875 in profits.
I suppose if I was in charge AMC would have gone out of business long before the pandemic. Maybe they have already found the equilibrium of getting people to buy their popcorn and not caring about whether broke-asses like me buy or not.
joey con carne- Posts : 4131
Join date : 2014-12-09
Re: AMC Theatres Is Expected to Run Out of Money in 6 Months
I’m curious if theaters will just fold or if movie studios will see their value and stop fucking them. The only reason concessions have gotten so expensive is because the studios keep fucking the theaters more and more.
We need a new system but nobody will want to give in and everyone will suffer for it. Pretty much the same with all the broken systems.
We need a new system but nobody will want to give in and everyone will suffer for it. Pretty much the same with all the broken systems.
Tyger- Posts : 3480
Join date : 2014-12-09
Location : Utah
Re: AMC Theatres Is Expected to Run Out of Money in 6 Months
Haven't been to an AMC in a long time. I go to my local Cinemark theater and they are much cheaper and have nice electric recliner seats. But I drove by my local theater last week and very few cars were there, I hope it doesn't close.
UltimateMarvel- Posts : 10277
Join date : 2014-12-09
Location : East Coast
Re: AMC Theatres Is Expected to Run Out of Money in 6 Months
UltimateMarvel wrote:Haven't been to an AMC in a long time. I go to my local Cinemark theater and they are much cheaper and have nice electric recliner seats. But I drove by my local theater last week and very few cars were there, I hope it doesn't close.
I've never even seen a movie theater like you're describing. All of our movie theaters are run down shitholes, I could care less if they shut em all down. I couldn't even wager a guess as to how many years it's been since I went to the movies or what that movie even was.
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Wylde's Favorite Films of 2024:
Dune Part II
Wylde's Favorite Series of 2024:
Fallout (Prime), The Gentleman (Netflix), Shogun (Hulu/Disney+)
Re: AMC Theatres Is Expected to Run Out of Money in 6 Months
All the AMC and Showcase theaters have recliners near me. Less seats available and the prices reflect that. Also, you can do reserve seating which I love.
I think the last film I watched in a theater was Equalizer 2 at Bowtie Cinemas. Last recliner film was Sicario 2 at an AMC.
I think the last film I watched in a theater was Equalizer 2 at Bowtie Cinemas. Last recliner film was Sicario 2 at an AMC.
joey con carne- Posts : 4131
Join date : 2014-12-09
Re: AMC Theatres Is Expected to Run Out of Money in 6 Months
WyldeMan wrote:I've never even seen a movie theater like you're describing. All of our movie theaters are run down shitholes, I could care less if they shut em all down. I couldn't even wager a guess as to how many years it's been since I went to the movies or what that movie even was.
Yeah, it's pretty nice. $5/tickets before 1PM and usually a lot less people but I don't like watching that early, $7/ticket normally, $9/ticket opening weekend movies. They actually renovated not too long ago and it's very much improved from what it used to be and now with the new chairs, I like it a lot. It's my go to theater. I wouldn't mind if Cinemark dominated AMC theaters.
Last edited by UltimateMarvel on 10/6/2020, 1:40 pm; edited 1 time in total
UltimateMarvel- Posts : 10277
Join date : 2014-12-09
Location : East Coast
Re: AMC Theatres Is Expected to Run Out of Money in 6 Months
UltimateMarvel wrote:Yeah, it's pretty nice. $5/tickets before 1PM and usually a lot less people but I don't like watching that early, $7/ticket normally, $9/ticket opening weekend movies. They actually renovated not too long ago and it's very much approved from what it used to be and now with the new chairs, I like it a lot. It's my go to theater. I wouldn't mind if Cinemark dominated AMC theaters.
I haven't been to a movie theater in well over five years but even then, all tickets in my area were over $12 for any showing after 4pm.
A small popcorn or nachos and a small soda would run you another $15.
I think the cheapest you could get a ticket was a 10am showing for around $9.50.
Maybe because our AMC or Regel theaters are so far and in between they can charge whatever they want.
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Wylde's Favorite Films of 2024:
Dune Part II
Wylde's Favorite Series of 2024:
Fallout (Prime), The Gentleman (Netflix), Shogun (Hulu/Disney+)
Re: AMC Theatres Is Expected to Run Out of Money in 6 Months
You guys don't have Cinemark over there? Never heard of Regel before but we do have AMC.
UltimateMarvel- Posts : 10277
Join date : 2014-12-09
Location : East Coast
Re: AMC Theatres Is Expected to Run Out of Money in 6 Months
UltimateMarvel wrote:You guys don't have Cinemark over there? Never heard of Regel before but we do have AMC.
Nope, no Cinemarks over here it's mostly all AMC or Regal.
Growing up we had Loews Cinemas but they were absorbed by AMC about 15 years ago and it's just been the two ever since.
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Wylde's Favorite Films of 2024:
Dune Part II
Wylde's Favorite Series of 2024:
Fallout (Prime), The Gentleman (Netflix), Shogun (Hulu/Disney+)
Re: AMC Theatres Is Expected to Run Out of Money in 6 Months
Closest Cinemark for me is in New Jersey. We have AMC, Showcase, and Regal here in New York. There's also a smaller chain called Bowtie Cinemas which does not have reserve seating or recliners. Just a regular theater. Smaller screens and less seats. I really like them. Feels more "old school"
joey con carne- Posts : 4131
Join date : 2014-12-09
Re: AMC Theatres Is Expected to Run Out of Money in 6 Months
joey con carne wrote:Closest Cinemark for me is in New Jersey. We have AMC, Showcase, and Regal here in New York. There's also a smaller chain called Bowtie Cinemas which does not have reserve seating or recliners. Just a regular theater. Smaller screens and less seats. I really like them. Feels more "old school"
My town has a movie theater but it's so run down that nobody even goes to it anymore.
The arm rests often fall off because the bolts are broken or have the bottom of the drink holders cut out, the backs of the seats fall off if you bump them with your legs. The floors are so sticky you'd think it was a porn booth that nobody ever cleaned. A lot of the seats are completely broken but are just covered with trash bags instead of being repaired.
The spit wads I shot onto the ceiling in 1999 while watching Office Space...still where I left em.
It's a movie theater with four screens but at no point have more than 2 of them ever been in operation at a time.
I could keep going but you might be able to see why I lost interest in going to the movies.
_________________
Wylde's Favorite Films of 2024:
Dune Part II
Wylde's Favorite Series of 2024:
Fallout (Prime), The Gentleman (Netflix), Shogun (Hulu/Disney+)
Re: AMC Theatres Is Expected to Run Out of Money in 6 Months
Dang, that's a shame.
Definitely looking forward to going to the theater at some point. Probably not for another year or two LOL.
Definitely looking forward to going to the theater at some point. Probably not for another year or two LOL.
joey con carne- Posts : 4131
Join date : 2014-12-09
Re: AMC Theatres Is Expected to Run Out of Money in 6 Months
joey con carne wrote:Dang, that's a shame.
Definitely looking forward to going to the theater at some point. Probably not for another year or two LOL.
In the first few years after it opened I was there every weekend but eventually it felt into total disrepair and I stopped going. This was the same place I told you guys about where I'd go to midnight showings of big releases the night before the dropped. I had great memories there but now it kind of just makes me sad.
_________________
Wylde's Favorite Films of 2024:
Dune Part II
Wylde's Favorite Series of 2024:
Fallout (Prime), The Gentleman (Netflix), Shogun (Hulu/Disney+)
Re: AMC Theatres Is Expected to Run Out of Money in 6 Months
WyldeMan wrote:My town has a movie theater but it's so run down that nobody even goes to it anymore.
The arm rests often fall off because the bolts are broken or have the bottom of the drink holders cut out, the backs of the seats fall off if you bump them with your legs. The floors are so sticky you'd think it was a porn booth that nobody ever cleaned. A lot of the seats are completely broken but are just covered with trash bags instead of being repaired.
The spit wads I shot onto the ceiling in 1999 while watching Office Space...still where I left em.
It's a movie theater with four screens but at no point have more than 2 of them ever been in operation at a time.
I could keep going but you might be able to see why I lost interest in going to the movies.
Damn, I can see why you don't want to go there now. lol
UltimateMarvel- Posts : 10277
Join date : 2014-12-09
Location : East Coast
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