I’ve got news almost as disappointing as the live-action movie version of Cats. AMC, the world’s largest movie theater chain, said it has “substantial doubt” it can remain in business after closing all of its locations during the coronavirus pandemic.
The theater chain expects to have lost $2.1 billion to $2.4 billion in the first quarter. That’s the equivalent of two large popcorns and a soda.
“We are generating effectively no revenue,” the company said.
“Even if governmental restrictions are lifted in certain jurisdictions, distributors may delay the release of new films until such time that restrictions are eased more broadly, which may further limit our operations,” the company said.
AMC has been trying to save money by furloughing its in-theater employees, halting its operations through June, and suspending its dividend payments and share repurchases. The company also has been working with landlords to defer rent payments and has cut the salaries of its corporate-level employees. But it may not be enough.
Here’s the big picture: Even if restrictions are lifted, movie studios could still hold back on production and new film releases. Plus, some people might not feel comfortable going back to packed theaters for a while. These factors are out of AMC’s control — but they will determine whether or not the theater chain survives.