It seems that report from just a few months back is coming to pass. In a new SEC filing by AMC, the nationwide theater chain has indicated that it may be going bankrupt soon. “In the absence of additional liquidity, the Company anticipates that existing cash resources will be depleted during January 2021,” writes the company to the SEC.
The reason for this abrupt filing? Warner Bros.’ decision to bring all of its films to HBO Max simultaneously in 2021. With debt accumulating in excess of $100 million so far, AMC had already deferred more than $400 million of rent obligations into the next year. With WB soon allowing moviegoers to view films from the luxury of their homes, it seems AMC is anticipating that it will not be able to recuperate.
“These challenges have been exacerbated by the announcement by Warner Bros. that its entire studio film slate for 2021 will move to simultaneous release, which may result in other studios adopting a similar strategy,” the company writes. With many unlikely to make the trek to a theater when the same film will be available at home, I can’t blame AMC for this decision. I would expect the worst, as well.
Making matters worse is the substantial loss the company has faced these past two months. With the COVID-19 pandemic ramping up and causing politicians to enforce new lockdown limitations, AMC attendance dropped around 92% in October and November compared to 2019 numbers. While that is to be expected, even overseas locations have experienced a similar decline in patrons.
“It is very difficult to predict when theatre attendance levels will normalize,” AMC writes, “which we expect will depend on the widespread availability and use of effective vaccines for the coronavirus.” With that said, the company believes it will need around $750 million to keep its theaters open in 2021. I wouldn’t expect a comeback here, sadly.