AMC Theatres Still in Coronavirus Disarray with Delays and Debt Exchanges

AMC Theatres will not open for the foreseeable future and are selling off debt to keep afloat

AMC Entertainment, the parent company of AMC Theatres, has postponed its opening day yet again. The theater chain was originally planning a stateside reopening on July 30. However, that date has been scrapped and a new one has yet to be set.

Part of this delay is just AMC following suit with the studios. Warner Bros.’ Tenet and Disney’s Mulan were originally set for release on August 12 and August 21, respectively, and a late-July opening would have given AMC time to initiate new sanitation and safety procedures before those tentpoles started drawing the big crowds back in. However, with both studios announcing a third delay for both of the films in the wake of continued coronavirus case surges, AMC was forced to postpone as well. (Tenet’s new staggered release schedule suggests a late-August reopening will be likely, but nothing is confirmed at this time.)

The other part of the delay was obviously a financial aspect. Without a determined start date for the big tentpole draws – or even guaranteed new content on the whole – the indebted theater chain would just be driving itself further into the red.

Debt Exchanges

Deadline reports that AMC Entertainment will be finalizing a deal with its debt holders in the coming days to help alleviate its financial burden. This will involve both the selling-off of lower financial notes (essentially bonds and loans) for a discount, or in exchange for higher-valued notes.

This is in addition to the deal it already made with some of its other debt holders earlier in July, wherein the holders agreed to forgo cash interest payments until 2026. A source close to the theater chain said this will make up $25M-$40M in cash interest savings over the next few quarters.

AMC estimates that this restructuring will keep them afloat until next spring, even in the direst of situations.

The State of Affairs

Other chains continue to be hit hard by the ongoing coronavirus pandemic. Cineworld, the U.K.-based theater chain (and owner of the U.S.-based Regal Cinemas) has started opening some of its theaters in European markets, but it doesn’t expect to be fully operational for quite some time. Analysts suggest that Cineworld’s own recent debt restructuring could spare the company almost a year of extreme financial burden. However, they also estimate that the company is “burning” through $50M a month while theaters remain shuttered.

Variety reports that less than 1,000 movie theaters are currently open in the U.S., and a large portion of those are drive-ins (where social distancing can be more easily maintained). Many of those are in states where reopening procedures have been more lax, and thusly exclude large markets like New York and California.

As a result the National Association of Theatre Owners is urging patrons to support their #SaveYourCinema campaign, which calls on Congress to support the Restart Act to “give movie theaters access to partially forgivable seven-year loans covering six months of expenses”. It would also lend support to other entertainment venues such as music stages, theaters, performing houses, restaurants, and health and fitness clubs.

NATO claims that over 200,000 letters were sent to Congress in support of the Restart Act.

“Theaters are the beating hearts of the communities they serve,” said Esther Baruh, NATO’s director for government relations. “They drive local economies and boost neighborhood businesses. But without more help from Congress, we fear for the future of the industry.”

Novel Coronavirus Update

As of this writing, the Center for Disease Control and Prevention reports over 4.1 million cases within the United States, including nearly 146,000 related deaths. California, Florida, New York, Texas, and New Jersey currently top the list of states with the most confirmed COVID-19 cases. The World Health Organization reports 16.1 million cases of the virus worldwide and more than 646,000 deaths.

Keep abreast on our reporting of the outbreak as it pertains to the entertainment industry here. Stay inside if you can, stay healthy, and stay safe.

Leave your thoughts on AMC Theatres’ debt restructuring and further delay in the wake of the prolonged COVID-19 epidemic (via Deadline, Variety, and Reuters) and this article below and in the comments section. Readers seeking to support this type of content can visit our Patreon Page and become one of FilmBook’s patrons. Readers seeking more movie news can visit our Movie News Page and our Movie News Twitter Page. Want up-to-the-minute notifications? FilmBook staff members publish articles by Email, Twitter, Instagram, Tumblr, Pinterest, and Flipboard.