The theatergoing industry could look different by the end of the pandemic.
Movie theater chain AMC has been having an especially rough go of things since the pandemic started. They were forced to shutter almost all of their theaters and spend several months coming up with safety strategies, and even when they finally started opening up again, there were barely any movies on the market to show in theaters. It’s getting to the point that they simply cannot conduct business in a substantial capacity, and it looks like that reduced capacity is catching up to them.
In a letter to their investors today, AMC announced that there is a very real possibility the company could completely run out of money by the end of the year. The chain has managed to reopen 494 of its 598 theaters throughout the US, but only at a capacity of 20-40%. The remaining unopened theaters are all in major metropolitan areas like New York and California. Though they’re a minority, their typical customer base makes up about a fourth of the company’s usual yearly revenue. Without these theaters and with the open ones at such low capacity, AMC is bleeding money.
“There is a significant risk that these potential sources of liquidity will not be realized or that they will be insufficient to generate the material amounts of additional liquidity that would be required until the company is able to achieve more normalized levels of operating revenues,” AMC’s warning read.
AMC’s stock values dropped 7.8% on this news, which is on top of the 44% drop it has accumulated over the course of the year. As the winter season approaches and the temperature drops, people will likely be even less eager to leave their homes and sit in confined spaces with strangers. AMC is currently researching ways to increase its theater attendance and generate more liquid income, but at the moment, there isn’t a clear solution.