Theater giant AMC has narrowly avoided bankruptcy—a small miracle, really.
After revealing that it was very near the end of its cash reserves late last year, AMC announced today that it’s managed to raise $917 million in new investment capital since halfway through December. The “much-welcomed monies” could help the U.S.’s largest theater chain survive well into 2021, the company said, and the company’s CEO and president Adam Aron declared that “the sun is shining on AMC.”
“After securing more than $1 billion of cash between April and November of 2020, through equity and debt raises along with a modest amount of asset sales, we are proud to announce today that over the past six weeks AMC has raised an additional $917 million capital infusion to bolster and solidify our liquidity and financial position,” Aron said in a statement. “This means that any talk of an imminent bankruptcy for AMC is completely off the table.”
That’s great for AMC in the immediate theater, but its long-term survival still very much remains in question. The company said negotiations with its landlords about money owed will need to go smoothly, but the company also needs to ensure that it can get actual customers back into its theaters. That will, according to Aron, depend heavily on covid-19 vaccinations—which have been slow to make their way to the American public.
“Looking ahead, for AMC to succeed over the medium term, we are going to need for much of the general public in the U.S. and abroad to be vaccinated,” Aron said. “To that end, we are grateful to the world’s medical communities for their heroic efforts to thwart the COVID virus. Similarly, we welcome the commitment by the new Biden administration and of other governments domestically and internationally to a broad-based vaccination program.”
Then there’s the whole issue of movies themselves. Some of the year’s biggest releases have already been slated for same-day streaming releases, thanks to HBO Max’s so-called hybrid release model. HBO Max parent WarnerMedia announced last month that all of its 2021 Warner Bros. films would release the same day on its streaming service as they do in theaters and at no additional cost to subscribers. That means Godzilla vs. Kong, The Suicide Squad, Dune, Matrix 4, Space Jam: A New Legacy, as well as a dozen other titles will be available to potential moviegoers at the click of a button on their respective release days. That’s a lot of freaking movies!
AMC at the time criticized the decision by one of the biggest studios in Hollywood to commit a full year’s worth of releases to HBO Max. Exclusive windows are a big pull for getting paying customers through cinema doors, and making blockbuster movies available effectively for free to HBO Max subscribers does not exactly do theaters a solid at a time when they badly need attendance.
Ultimately, AMC’s sunny disposition about its financial standing makes some pretty big assumptions about the willingness of folks to even want to be in theaters this year—readily available vaccinations or otherwise. And if AMC is going to survive this mess, it better hope they do.