On Wednesday, AMC Entertainment reported a net loss of $4.6 billion in 2020. Among lockdowns and studios such as Universal and Warner Bros. pivoting content to streaming services, it is fight or flight for the largest movie theater chain in the world.
“This past year has presented AMC with the most challenging market conditions in the 100-year history of the company,” said AMC CEO Adam Aron in a statement. “As we sit here today, we see that vaccinations are occurring in the United States at a brisk clip, our theatres in New York City have finally opened with theatres in Los Angeles likely opening shortly as well, blockbuster movie titles are currently scheduled to be released in significant quantity in the coming few months, and we have more than $1 billion of cash on hand. Taking these facts together, we have reason to be optimistic about AMC’s ability to get to the other side of this pandemic.”
Compared to 2019, in 2020 the company revenue dropped by 77.3 percent. This past quarter, its revenues were down 88 percent from 2019. AMC lost $946 million for three quarters straight ending in December. By the end of the third quarter of 2020, revenue and attendance combined for AMC declined as much as 92 percent. In the fourth quarter, its revenue worsened by another 3 percent.
The horrendous numbers have made AMC shutter the doors of 60 theaters globally, 48 in the United States. Last spring, approximately 1,000 of its theaters closed amid lockdown restrictions. While the company has slowly attempted to open in various states, movie studios have found alternatives to swiftly deliver content to consumers watching 21 percent more television a day, a poll from Nielson Ratings in October showed.
“The numbers aren’t surprising. What’s more troubling for AMC is the immediate future. We’ve spent a full year watching new releases from the comfort of our home. The theatrical windows continue to shrink, and that likely won’t be reversed any time soon,” said Christian Toto, editor of HollywoodinToto.com. “And movie stars continue to flock to streaming service projects, bolstering them at the expense of the traditional theater model.”
In December 2020, AMC secured $100 million from Mudrick Capital Management. Due to Reddit investors mass-purchasing AMC stock in January, the company received $506 million and slimly escaped bankruptcy. Shares of AMC have risen as much as 365 percent this year, subsequent to the investors banding together to help brick-and-mortar stores such as Gamestop survive. The other $411 million it received came in credit from Odeon, a European subsidiary.
“The sun is shining on AMC,” the CEO claimed in a statement after announcing the Reddit and Odeon cash flow.
In March 2020, it was reported by Nielson that TV streaming viewership increased 85 percent in a three-week period since 2019. U.S. viewers spent about 400 billion minutes streaming content, with Netflix accounting for 29 percent of all viewing. In quarter one of 2020, Netflix gained an additional 25.86 million subscribers. Disney delivered “Soul” and “Mulan” to streaming audiences, and 7Park Data found that 29 percent of all U.S. Disney Plus subscribers paid $30 each for “Mulan,” for instance.
Warner Bros. announced in December that it will release all 2021 films on HBOMax, as well as in theaters. This notably includes foreseeable blockbusters like “Matrix 4,” “Dune,” SpaceJam: A New Legacy,” and “The Suicide Squad.”
Aron claims that the Covid-19 vaccine will be a “real salvation” for AMC Entertainment, as states begin to loosen restrictions.
According to The New York Times, AMC is now negotiating with both Warner Bros. and Universal Studios to receive more exclusive content for theatrical release. AMC is in a cold war with studios, but the government is to blame for the endless COVID restrictions. The shifting goalposts have put this American institution, like many others, on the brink of collapse.