The troubles facing cinema exhibitors are brought into stark focus with bleak messages coming from Odeon owners AMC in the US.
With cinemas closed for the best part of three months and counting thus far, there are growing reports of one or two chains that are going to struggle to stay in business. And in particular, it looks as though time is running out for AMC Theaters in the US.
The company has warned in its latest filing to regulators that “we may not be able to obtain additional liquidity and any relief provided by lenders, governmental agencies, and business partners may not be adequate and may include onerous terms. Due to these factors, substantial doubt exists about our ability to continue as a going concern for a reasonable period of time”.
Even before Coronavirus hit, AMC was struggling with a heavy debt. Now that it’s lost its income, it’s unable to service that debt, and has reported a loss for the first quarter of 2020 said to be between $2.12bn and $2.42bn.
Furthermore, it has worries that even when it’s able to open its cinemas again, that there may be a reluctance on the part of its customers to return in any kind of numbers, and on studios to release films with theatrical windows.
This all has a knock-on in the UK, because AMC is the parent company of the Odeon chain. How that’ll affect it remains to be seen.
AMC is due to issue its first full set of post-lockdown financial results in a week or two. Things may become a little clearer then. As ever, our thoughts with all the staff affected.
More as we hear it.
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