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Home / Business / AMC’s revenue plummeted more than 90% as theaters are still empty

AMC’s revenue plummeted more than 90% as theaters are still empty



AMC Entertainment has not tried to hide the enormous financial hardship the company has been facing over the past few months and the increasingly uncertain future lies ahead if AMC cannot find new ways to make money.

The company posted revenue of $ 119.5 million in the third quarter, down 91% from the same period last year. The same quarter last year brought in more than $ 1 billion. AMC notes in its earnings that they are “operating about 539 out of 600 locations in the country” as of October 2020, but cities like New York City and Los Angeles remain major obstacles. The point is to get people to those theaters consistently without any of the major movies encouraging viewers. On Monday, the company also submitted new documents saying it was trying to sell 20 million Class A shares in an effort to secure just under $ 50 million.

“The timing and impact of this pandemic is still affecting us today and will certainly continue to affect our results going forward,” CEO Adam Aron said in the report.

The AMC has warned for months that they face dire financial conditions. In mid-October, AMC said it could run out of cash if the company doesn̵

7;t figure out a way to bring in some form of substantial revenue while studios delay their movies and movie theaters. remains closed in major metropolitan areas such as New York City and Los Angeles. Aron previously told CNBC that the company was focusing on fundraising, not the bankruptcy rumors that emerged after the submission of public documents suggested it might be a possibility.

There are a number of revenue methods to raise cash to help fix everything the AMC outlined in those documents, including negotiating with homeowners over payment of theater rent and starting joint ventures with partners. other business partnerships (including studios like Universal Pictures). The company has also suggested that it may sell off some of its assets. However, in October when the AMC submitted the public documents, “at the current rate of burning cash, [AMC] it is predicted that existing cash resources will be largely depleted by the end of 2020 or early 2021 ”.

There aren’t any major blockbusters to push people to theaters, and with coronavirus infections rising again in states across the country, things are likely to get worse in the near future. In those same public documents, AMC CFO Sean Goodman warns that even if the AMC can raise some cash, it may not be enough to prevent bankruptcy.

“Our predictability is uncertain due to the unknown magnitude and timing of the COVID-19 pandemic,” the documents say.

Not being able to predict how people will react over the next few months is one of the biggest problems. Take for example Warner Bros. Issuing company Tenet globally, and while the film does well in international markets, it is underperforming in the United States. Even AT&T CEO John Stankey admitted during the company’s recent earnings call that executives weren’t expecting a strong return in theaters in early 2021.

“We’re not optimistic,” said Stankey during the call. “We do not expect a strong recovery of the stage early next year. We hope it will continue to be jerky. “

For studios like Warner Bros., Disney, and Universal, companies can turn some of their titles into streaming exclusives. This could help develop HBO Max, Disney Plus and Peacock, respectively. Companies, along with studios such as Sony and Paramount, can also release their movies as digital monopolies, selling them on digital retailers like Amazon and iTunes. Or, as we’ve seen multiple happen over the past few months, studios could sell their titles to streamers like Netflix, which is seeing huge growth over the past few months. when people are at home and need new titles to meet consumer demand.

The problem is that studios have other options; As of now, theatrical chains like AMC and Regal do not. While theater companies are trying to find a way to survive, they have also been caught up in a terrifying change as studios are moving faster towards live entertainment (streaming). Warner Bros. and Disney wants to be in theaters. Companies make billions of dollars each year through global box office sales. But while Disney and Warner Bros. There are digital routes to keep things going until things start to revert to some normal form, it is increasingly unclear whether AMC can continue the journey.


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