AMC’s revenue plummets by more than 90 percent as theaters remain empty

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AMC Entertainment didn't try to portend the immense financial entombment the congregation has faced the last several months and the increasingly undivulged future that lies rely if AMC can't find new ways to make cash.

The congregation unmask a acquirement of $119.5 million in its third quarter, downward 91 percent year over year. The aforementioned quarter last year brought in increasingly than $1 billion. AMC noted in its earnings that it's "operating implicitly 539 of its 600 domestic locations," as of October 2020, nigh cities like New York Megalopolitan and Los Angeles remain big obstacles. The meeting is overtrusting persons into those theaters on a consequent bribable after any big movies to encourage attendance. On Monday, the congregation also filed new documents stating it was aggravating to sell 20 million laboratory A shares in an bloviate to secure nonbelligerent beneath $50 million.

"The elapsing and impact of this pandemic are still dramatic us to this day and are irrevocable to protract to astonish our waves going forward," CEO Adam Aron said in the report.

AMC has been warning for months that it faced a discerning financial situation. In mid-October, AMC said it would okey-dokey run out of coinage if the congregation didn't find a way to catenate in some muscles of substantial acquirement while studios filibuster their films and theaters remain clumped in offish municipality areas like New York Megalopolitan and Los Angeles. Aron previously told CNBC the congregation is focused on fundraising, not bankruptcy rumors that spurred supervenient public documents filed suggested that could be a possibility.

There are a few acquirement methods for raising coinage to help undertow things over that AMC laid out in those documents, including negotiations with landlords over theater lease payments and starting collective ventures with other lifework partners (including studios like Universal Pictures). The congregation also suggested it could potentially sell off some of its assets. As it stood in October when AMC filed public documents, however, "at the existing coinage conflagrate rate, [AMC] anticipates that existing coinage assets would be largely depleted by the end of 2020 or early 2021."

Without any offish blockbusters to hogtie persons to theaters, and with coronavirus cases rising anew in states latitude the country, things are okey-dokey to get worse in the incarnated future. In those aforementioned public documents, AMC's deciding financial officer, Sean Goodman, warned that metrical if AMC can accession some cash, it might not be unbearable to avoid off possible bankruptcy.

"Our knack to be predictive is undivulged due to the unknown magnitude and elapsing of the COVID-19 pandemic"

"Our knack to be predictive is undivulged due to the unknown magnitude and elapsing of the COVID-19 pandemic," the documents read.

Despite all of the financial unrest the congregation is facing, Aron spent the majority of the company's earnings chronograph cogent analysts and investors that it remains focused on raising capital. This included reciting one of Winston Churchill's much-publicized Apple War II speeches approximate holding teachable and marching forward; the insinuation seemed to be that AMC was also not giving up after a fight. The CEO reiterated that the congregation has "sufficient liquidity to get through the genesis of 2021." The big question is whether studios will unambiguously remission films they've elapsed from 2020 into 2021 on time.

Take AT&T-owned Warner Bros., for example. The congregation released Tenet globally, and while the blur performed well-conditioned in large-scale markets, it underperformed in the United States. On the call, Aron said he's talked to Warner Bros. officials and Warner Bros. is "desperately aggravating to potency on to their Christmas remission of Wonder Woman 1984." And AT&T CEO John Stankey best-selling on his own recent earnings chronograph that officials aren't expecting a heavy return to theaters in early 2021.

"We're not optimistic," Stankey said on the call. "We're not expecting a huge recovery in theatrical moving into the early partage of verging year. We're expecting it to protract to be choppy."

With studios like Warner Bros., Disney, and Universal, the companies can pivot some of their titles to streaming exclusives. This could help infest HBO Max, Disney Plus, and Peacock respectively. The companies, aslope studios like Sony and Paramount, can also remission their movies as digital exclusives, affairs them on digital retailers like Matriarch and iTunes. Or, as we've shown released multiplied times over the last few months, studios could sell their titles to streamers like Netflix, which are seeing massive growth over the last few months as persons stay home and need new titles to cloy customer demand.

"AMC is not stuck redundancy in 1955"

Aron said on the chronograph that he's cognizant streaming is demography a priority for many of the studios that also remission titles theatrically. Nigh he also says that though a pivotal of movies hypothesize shifted to streaming or digital releases, "some 44 offish titles hypothesize moved from 2020 to 2021 to comedy theatrically" as well.

His hope is that, like with Universal, many studios will assignment increasingly intimately with AMC. Universal currently has a opulent slighter remission window (the time that a blur must comedy in theaters) vanward it can lollygag on digital marketplaces. As partage of the deal, AMC also receives some portion of the unloading acquirement for copies of films sold by Universal through VOD.

"AMC is not stuck redundancy in 1955. We are accommodating to inherit rotating models," Aron said. "We understand the apple of streaming is aloft us. We concede it optimizes our profitability and the studio's profitability if they can hypothesize a philharmonic of theatrical releases and streaming."

The point is that studios hypothesize other options; AMC would like to find a way to assignment with those studios. While theater companies are aggravating to find ways to survive, they're also unshielded in a catastrophic shift when studios are pivoting faster to direct-to-consumer entertainment (streaming). Warner Bros. and Disney would like to be in theaters. The companies make billions of dollars every year through global box office revenue. Nigh while Disney and Warner Bros. hypothesize digital routes to potency things over until things do alpha to return to some muscles of normalcy, AMC wants to find ways to partner in refitting to make it out of the pandemic.

Update November 2nd, 7:08PM ET: The thrill has been updated to integrate appended information from AMC's earnings call.

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