Is This the End for Movie Theaters?
by EG
The coronavirus pandemic has been hard on everyone, but it's been especially difficult for movie theater owners. First forced to shut down in many places because of government orders, theaters tried reopening in late summer only to find that movie lovers just weren't that excited about going back to a crowded movie theater even if they were allowed to. Now America's biggest theater chain says it will run out of the cash it needs to continue operating as soon as the end of 2020. Read on for details.
Movie theater giant AMC Theatres said on Tuesday that its "existing cash resources would be largely depleted by the end of 2020 or early 2021" if current trends persist.
Thereafter, to meet its financial obligations "as they become due, the company will require additional sources of liquidity or increases in attendance levels," it said, adding: "The required amounts of additional liquidity are expected to be material."
AMC Theatres shares were down 6.9 percent in early Tuesday trading at $3.80.
Major movie releases that were previously scheduled to be released in the fourth quarter have either been rescheduled for 2021 or slated for streaming releases, "leaving a reduced slate of movie releases for the remainder of the year, and release dates may continue to move," AMC said. "Certain competitors have decided to temporarily reclose their theatres in light of the ongoing pandemic and the reduced slate of movie releases, which may further exacerbate the trend."
AMC also highlighted "the current low attendance levels," unveiling adjustments to cinema operating hours "to align screen availability and associated theater operating costs with attendance levels for each theater."
The company said it believes its cash burn to date is in line with prior expectations. "However, given the reduced movie slate for the fourth quarter, in the absence of significant increases in attendance from current levels or incremental sources of liquidity, at the existing cash burn rate," its existing cash resources will run out.
Get the rest of the story at The Hollywood Reporter.
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