Movie Theater Chain AMC Announces It May Close Permanently Because of COVID-19
AMC explained that even when the government gives them permission to reopen, problems will only continue for them if Hollywood studios delay releasing new films ...
The renowned movie theater chain AMC shocked the nation on Wednesday when it revealed that it may close permanently because of the COVID-19 pandemic.
Fox News reported that all AMC theaters have been closed since March due to coronavirus, which has led film studios to look into other options of releasing movies online directly to fans. AMC has officially shut down their theaters through June, meaning that no revenue whatsoever has been coming in for the chain in months.
While the chain said it has enough money to remain closed through the rest of the summer, it added that it will need more cash if it can’t reopen by then, and it may not be able to borrow enough money to stay afloat.
“We believe we have the cash resources to reopen our theaters and resume our operations this summer or later,” AMC said. “Our liquidity needs thereafter will depend, among other things, on the timing of a full resumption of operations, the timing of movie releases and our ability to generate revenues.”
Making matters worse, AMC explained that even when the government gives them permission to reopen, problems will only continue for them if Hollywood studios delay releasing new films.
“We will continue to monitor the potential lifting of various government operating restrictions, or whether such operating restrictions are extended with respect to some or all of our theaters,” the company said in its regulatory filing. “Even if governmental operating restrictions are lifted in certain jurisdictions, distributors may delay the release of new films until such time that operating restrictions are eased more broadly domestically and internationally, which may further limit our operations.”
“Due to these factors, substantial doubt exists about our ability to continue as a going concern for a reasonable period of time,” AMC added.
Though fear of catching the potentially deadly COVID-19 virus may stop people from wanting to sit in crowded theaters anytime soon, AMC is still confidant that fans will want to go to the movies again.
Life has changed dramatically over the past few months amidst lockdown due to coronavirus in so many different ways. It’s hard to imagine not ever being able to go to a movie theater again, but if things don’t change soon, it looks like that’s exactly what may happen.