AMC Strikes Deal With Universal Pictures to Stream New Theatrical Releases

AMC Strikes Deal With Universal Pictures to Stream New Theatrical Releases

AMC theaters has managed to tread water during the pandemic in part by striking a revenue sharing deal with Universal Pictures wherein Universal can put new releases directly on streaming platforms in return for a cut of the digital profits.

On Tuesday AMC pledged not to shutter any of its movie theaters that have reopened, despite financial pains that the industry has faced during the pandemic and the dearth of new films on the horizon.

The announcement was made the day after Cineworld — which operates Regal in the U.S. — reported plans to temporarily shutter all 536 of its locations on Thursday, citing the “challenging theatrical landscape.” Cinemark, another major operator, recently said it has no intention to close any U.S. venues.

AMC — the biggest theater chain in the U.S. and Europe — said that it is able to stay open, partly because of the recent deal it struck with Universal Pictures. The deal allows Universal to put new movies on video-on-demand platforms after 17 days on the big screen. In return, AMC gets a cut of the digital profits. Universal has put numerous titles, including Trolls World Tour, Pete Davidson and Judd Apatow’s The King of Staten Island and Focus Features’ The High Note, on digital rental services during the quarantine.

“Fortunately for AMC, our groundbreaking agreement with Universal Studios announced earlier this summer puts AMC in a position where we can open our theatres when others may feel the need to close,” said AMC CEO Adam Aron in a statement to the press. “We are fully comfortable showing Universal films in our theaters, even as they implement premium video on demand as we have mutually agreed. This is because AMC will share in premium revenues coming from their early availability in the home.”

The market seems to view AMC’s pledge to keep the lights on positively. In premarket trading, AMC shares were up 3.15% after Monday when its stock plummeted, falling 11.18% to close at $4.13 per share.

More than 80% of AMC’s U.S. locations are now open, and the company says an even higher percentage of theaters in Europe and the Middle East have resumed business as well. The company is actively planning to reopen more theaters, with the hope that New York and California venues will soon get the green light to welcome customers again.

“We take great comfort in knowing that literally millions of moviegoers have already visited our [theaters],” Aron said. “They have done so in part because of our AMC Safe & Clean protocols, developed in consultation with Clorox and faculty of the Harvard University School of Public Health. Our guests are telling us that our [theaters] have never been cleaner, and that they recognize the great effort AMC is making to keep them healthy and safe.”

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