AMC Entertainment has lost over half a billion dollars in profits due to ongoing theater closures. Since closing its theater chains back in March as a result of the COVID-19 pandemic, the world has become an especially difficult place for cinemas.
It was originally hoped that many theater chains as well as independent theaters could reopen on time to salvage the busy summer movie season, but so far the effects of COVID-19 pandemic continue to persist. As of this writing, only three major releases are still sticking to a traditional summer theatrical release model: New Mutants, Christopher Nolan’s highly-anticipated (and consistently delayed) Tenet, and time-travelling sequel Bill & Ted Face the Music. Unlike New Mutants and Tenet, however, Bill & Ted will also be released on VOD the same day as its theatrical release, underscoring the substantial effect that the pandemic has had on how and where movies are seen. Throughout all this, the financial losses continue to escalate for theaters and despite plans by major chains like AMC to reopen in mid-to late August, business likely will never be the same again for cinemas around the world.
Proof of the dire situation that AMC in particular now finds itself in has been further highlighted by new quarter revenue loss figures. The figures come to us courtesy of Variety and reveal that AMC Entertainment has lost a staggering $561.2 million due to pandemic-related closures. The loss is easily the worst that AMC has suffered in its 100-year history, putting the corporation in a very difficult spot. Still, in response to the disastrous financial quarter, AMC CEO and president Adam Aron acknowledged the difficult times and remained optimistic for the next financial quarter:
“It should be no surprise to anyone that with our operations shut the world over, and almost no revenues coming in the door, this was the most challenging quarter in the 100-year history of AMC. That is why the progress the entire AMC team made since the second quarter began is all the more important and impressive in working to achieve three key priorities: to dramatically reduce operating and capital expenditures, to strengthen our liquidity position and to set plans in motion for the successful reopening of our theaters as soon as it would be wise to do so.”
The extensive financial losses that AMC has accrued only serve to further bring into question just how much longer the traditional film release model can hold out for. If COVID-19 continues to be a major roadblock for the film industry – both in the way films are made as well as how they’re released, then there’s no question that whether audiences like it or not, considerable changes will have to be made. This is a particularly difficult pill to swallow for chains like AMC, not to mention for those who feel that seeing a film in a theater is still the best possible method. Much hope is still being held out for Tenet’s ability to help breathe some new life back into theaters, but at this point it’s very difficult to say whether even that can be of much help.
And while major chains like AMC are experiencing severe financial losses due to COVID-19, it’s also worth remembering that these sorts of setbacks, as bad as they are, are only possible for major chains. No independent cinema could ever dream of being as financially destitute while still continuing to fight for business. Smaller, locally owned theaters were already fighting an uphill battle before the pandemic. Many theaters won’t survive this, making it even more daunting and difficult to understand what cinema will look like in a post-COVID world.
